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Source: CarMax Do I have equity in my lease? Please note, though, that in some of the restricted cases below (e.g., Audi and Volkswagen), a third-party buyout may be allowed if the buyer is a dealership, not an individual - so be sure to read the fine print to be fully clear on your options.Īuto finance companies that have partial or complete restrictions on third-party off-lease buyouts:Īuto finance companies that have no significant restrictions on third-party off-lease buyouts:Ĭhrysler Capital (including Chrysler, Dodge, Ram, Jeep and Fiat vehicles)

See steps two and three for more information. In this scenario, the remaining options would be to take your vehicle to any dealership of the same brand and get an offer for it, or else purchase it from the lease company directly. In other words, you could get your vehicle appraised on Edmunds to get an independent quote on its value, but you would not be able to redeem the offer at our participating dealerships. Brands including Acura, BMW, Honda and General Motors changed their rules last year to ban the sale of a leased vehicle to a third-party buyer. And the list has grown over the past year, as dealerships that often relied on lease returns to stock their used car inventory now find themselves in serious need of cars to fill their lots and showrooms. A number of automotive finance arms do not allow a third-party buyout of the leased vehicle. This strategy isn't quite available to everyone. What finance companies allow a lease buyout? If, on the other hand, the car is worth less than the residual amount, you can turn the car in without incurring any extra expense. Since you have the right to buy the car at the end of the lease term for that residual value, you can profit from the lease company's inaccurate lower estimate. The residual value is also the amount you can buy the car for at the end of the lease, so you're looking to see if the car's current value is higher than the residual value. With this in mind, you'll first need to determine if your current car lease has any equity. This logic also applies to lessees who are likely sitting on a ton of equity as dealers are beyond eager to acquire a relatively new used vehicle. "Trade-in values and used prices are at all-time highs, so owners can expect a premium if they are selling their vehicle. "We're witnessing a really unique moment for car owners as the power pendulum has swung in their favor," said Jessica Caldwell, Edmunds' executive director of insights. As a result, your expiring lease might have more value in it than expected, according to the Edmunds experts. These market forces, in turn, shifted consumer demand, causing a shortage of used vehicles and leaving dealerships in dire need of inventory.

Used car values are at record highs now due to a perfect storm of semiconductor chip shortages and supply chain delays that has made new cars scarce over the past year.

The COVID-19 pandemic has caused one of these shifts. But sometimes there are fluctuations in the marketplace, and some vehicles might be worth more than the residual value. They're good because they have to be - residual value is typically the basis of the lease calculation. Auto finance companies are pretty good at predicting residual value, which means a prediction of what a car will be worth at the end of the lease term.