Experts urge consumers to check for equity in their leased vehicle before it expires due to strong demand in the used car market during the pandemic
SANTA MONICA, Calif., Oct. 15, 2020 /PRNewswire/ -- Consumers with a lease expiring in the next few months could be leaving thousands of dollars in cash on the table if they don't check on the equity in their vehicle, according to the car shopping experts at Edmunds. And this could affect quite a few Americans: Edmunds data reveals that approximately 4.2 million consumers chose to lease a vehicle in 2017, and most of those leases expire in 2020. Since many of those consumers may have opted to extend their lease at the outset of the coronavirus pandemic, there might be more people than usual with an expiring lease at this time of year.
"Most consumers likely aren't aware that there are alternatives to turning in their leased vehicle, let alone that they might be able to turn it into cash," said Jessica Caldwell, Edmunds' executive director of insights. "There's unusually strong demand in the used vehicle market right now, and prices and values are running high. If you have a lease return coming up in the next few months, the smart thing to do right now would be to check if you have equity in your vehicle because there's a good possibility that you could trade it in to offset the cost of a new car or sell it for a nice chunk of change."
To help consumers with an expiring lease this year, Edmunds experts put together a helpful infographic and insider guide that explains exactly how consumers can check if they have equity in their lease and what their options are if they're in the position to make a profit off their leased vehicle.
Edmunds analysts also took a look at all vehicles leased in 2017, the average MSRPs for these vehicles when leased, their average buyout price at lease expiration, and their average private-party values to calculate the profit that could be made on each vehicle if a consumer decided to buy out the lease and then sell that vehicle. The Ram 1500 commanded the highest profit for non-luxury vehicles, generating $4,219 on average. The Porsche Panamera yielded the highest profit for luxury vehicles, generating $11,821 on average. A top 10 list for luxury and non-luxury 3-year-old leased vehicles that are commanding the highest profit if bought out and sold in a private-party transaction can be found below.
Although these figures highlight the values that these vehicles could generate if sold to a private party, Edmunds experts say these are also good directional indicators of what consumers might also expect if they decide to take a more convenient route to make money on their lease, such as trade it in at a dealership or sell it directly through an online offer like on Edmunds.
"Most people probably don't have tens of thousands of dollars on hand to buy out their leased vehicle or want to arrange financing to just turn around and sell it, and then on top of that be willing to go through the stress of a private-party sale given current health and safety concerns," said Ivan Drury, Edmunds' senior manager of insights. "You might not get the maximum amount for your leased vehicle if you trade it in to a dealership toward your next car purchase or sell it for cash with an online offer on Edmunds, but you'll certainly save yourself the hassle and paperwork."
Leased Mainstream Vehicles Commanding the Greatest Average Profit if Bought Out and Sold to a Private Party
(2017 Model Year)
Leased Luxury Vehicles Commanding the Greatest Average Profit if Bought Out and Sold to a Private Party
(2017 Model Year)
For more automotive research and insights, visit the Edmunds Industry Center here: https://edmu.in/2FzAr7W/.
Edmunds guides car shoppers online from research to purchase. With in-depth reviews of every new vehicle, shopping tips from an in-house team of experts, plus a wealth of consumer and automotive market insights, Edmunds helps millions of shoppers each month select, price and buy a car with confidence. Regarded as one of America's best workplaces by Fortune and Great Place to Work, Edmunds is based in Santa Monica, California, and has a satellite office in Detroit, Michigan. Follow us on Twitter, Facebook and Instagram.
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