When your lease is up, you have a number of options. And one of those is to keep your car and sell it privately. With the car market (both new and used) still in flux, this might be a very smart and lucrative venture for you. But what is it like to sell a car privately?
When your car lease ends you have three main options:
Every lease has a predetermined residual value. This is the amount that the car is worth at the end of the car lease, and ultimately it is the amount you will need to pay in order to buy your car. The most important thing to remember is that the residual value cannot be altered after your lease is up, so if your car has increased in value, you can still buy it for the low residual value.
This is particularly important in today’s car market. An unprecedented couple of years has created a very competitive car market. All of the following factors have contributed to an increased price in new cars:
All of these factors caused the new car market to skyrocket in prices. The average new car in summer 2022 cost $48,301 according to Kelley Blue Book. That’s an increase of 11% in just one year.
An expensive new car market leads to an expensive used car market. So the lease that you are driving around in is worth more than it was anticipated to be worth in your contract. In other words, your car’s actual market value is most likely much higher than your car’s residual value. Buying your lease makes sense now in two scenarios:
While it depends on your particular situation, buying your lease may make a whole lot of sense right now.
When selling a car you have three main options:
There are pros and cons to each of these options. If you sell your car to a dealer, it will be convenient and easy. The payment to you will be secured, you can avoid DMV paperwork, and it can be done quickly (within one day). But by going to a dealership you will certainly have to haggle, and this may mean you will not get as much as you could for your car.
Selling to an online dealer is also a quick and convenient option. By simply going to their website and filling out some information you can get an instant offer. You will also be offered a secured payment and can avoid the pesky DMV. By going to an online dealer you can avoid the negotiations that will be unavoidable at a physical dealership.
But neither of these options will get you as much money as you can get by selling your car privately. It will always be more lucrative for you to sell your car yourself, but it does require a bit more time, commitment, and patience.
Selling your car privately requires some preparation, but it’s most likely worth the time and effort.
When your lease is up (or even before your lease is up) you will need to buy it out. The buyout price will be the residual value of the car plus any taxes and fees that may apply. If you do not have the cash to buy your car outright you can get a car lease buyout loan.
As we said before, the residual value of your car will be stated in your lease contract. But that is separate from the actual market value of your car. To determine the market value of your car you will need to do some research online. Kelley Blue Book and Edmunds are great places to start. Your vehicle’s value will be based on the make and model, year, mileage, and the condition the car is in. Your car’s condition will fall into one of four categories:
Once you determine your car’s condition you can determine your vehicle’s worth using one of the online tools available.
In order to sell your vehicle you will need to have all of your paperwork in order. You should have the following paperwork:
To get the best price for your car you want to get your car in its best shape. Here are some of our top tips to get your car looking and driving its best:
After your car is looking its best, take some good pictures outside. Make sure to get pictures of any special features, such as a sunroof.
It’s a good idea to advertise in a few different places to maximize the amount of exposure–and offers–you will get. Tell friends and family, advertise on Facebook, and look for local publications to get the word out.
When people start to contact you to see your car, have a plan as to where you will meet them and how you will allow for a test drive. It is recommended to meet in a public space and bring a friend along for added safety.
When your buyer is ready to seal the deal, get payment as soon as possible (a cashier’s check is recommended). Be ready to sign the paperwork over to them. Check your state laws to determine what specifically you need to do to complete the sale.
If your lease is ending, it may be worth it to buy it and sell it privately for a profit. A car lease buyout loan is the perfect way to do this if buying in cash isn’t an option. Contact Auto Approve today to learn more about car lease buyout loans!