3 Ways to Uncover Equity in Your Leased Car

There are so many options when it comes to vehicles. The first choice is to try to find the right vehicle. Are you a car person, a truck person, or somewhere in between? When picking, you also have to consider your needs or possibly your family’s needs. After making your choice on paper you must find it in the real world. This can be an arduous task. Once you find your dream vehicle, there are still more choices. Are you going to buy or lease? Those that take the leasing option have the choice to make as they near the end of their lease agreement. Like all large purchases, we want to make them end in our favor. You want to find all to get the equity out of your car lease. 

Know It’s Worth

Getting equity out of your leased car starts when you begin the lease. First, you want to ensure you get a vehicle that will hold its value. All cars depreciate, but some do so at a slower rate. Do your research. Continue to check the value and what is happening in the car market. This will help you know when it is the right time to make some of the following suggestions. One way to find the value is to check with your lender. You should be able to log on to your lender profile and find the necessary information. You can also use a site like CARMAX, to see what you could get for your car. Another option to see another range is using Kelly Blue Book. This site gives you ranges for the different methods of selling a vehicle. Look at multiple places to get a well-rounded estimate of the value you have. 

Equity 

Those that choose to lease are usually looking for a lower monthly payment. They are generally looking at something other than it to gain equity. But, there are situations when this does occur. When a lease agreement is signed for a vehicle, a buyout amount is set. At times the car’s value can increase, and if you owe less than it is worth, you now have positive equity. There are a few ways that you can take advantage of it. 

Sell Private Party

One look at Kelly Blue Book will show you that you can sell a car for more if you do it as a private party sale. This does take trust when you are dealing with selling a leased vehicle. To do this, the individual buying it must send the check to the leasing company. The leasing company will then send you the title, and you can use the profit to roll into purchasing your next car. The tricky step is that after you sign the title to the buyer, they must register and pay the sales tax in about ten days, if applicable. If not, the state could be coming after you for the sales tax, which would eat into your profit. These transactions take trust on both sides, so best to be done with family or friends.

Sell Lease to Dealer 

With the current storage in vehicles, many cars are worth more than when the lease agreements were signed. The dealer has probably already reached out to buy out your lease. They want to do this to lease the car at a higher amount to the next person. The dealerships are trying to make as much as they can from their limited inventory right now. The offer will be over the amount you owe, hopefully enticing you to take the deal. It will be less than if you sold it private party. The benefit of doing it this way is that you do not have to go through the process of finding a buyer. Taking the easy road might be worth it. There will be no need to jump through any extra hoops. 

Buy It

When looking at the value of your vehicle and the amount you still owe on the lease, buying it may be worth it. Save yourself the monthly bills and buy it out. You will have to pay the sales tax that you avoided when leasing. Once you are the owner, you can do anything that you like with it. Sell it for a profit, or use it knowing you have made a great deal. Then drive it until new vehicle prices drop.

Use the equity in all things to your advantage.