Leasing a car has many advantages, but it can leave you feeling trapped if you decide that the car you have doesn’t fit your needs anymore or you just want something a little different.
Luckily, you have options that don’t involve having to flat out break your lease. One of these is trading your lease in for another car. In this article, well break down what you need to know and show you how to do it without losing out on money.
Find out if trading in your lease is right for you
Trading in your car may end up costing you if you don’t play your cards right. That’s why it’s important to first understand how much your car is worth and whether or not you have any equity in it.
Before you trade, you’ll want to be sure that you have positive equity in the car. That means that the market value of the car is higher than the cost of buying it out.
You can find the equity you have in your car by using tools like CoPilot’s Lease Buyout Calculator, which compares the current market value of your car to the buyout price. Note that your car’s actual value will depend on factors like demand, mileage, condition, and location and may vary at the dealership. This tool is designed to give you a rough estimate to go off of.
If you find that you don’t have positive equity in your car, you can still trade it in. You’ll just have to pay for the difference, which we discuss in the next section.
Did you know that your leased car may be worth more than you (or your dealership) thinks it’s worth? Learn how to calculate your lease’s equity and how you can use it to your advantage.
How a lease trade-in works
If you are trading your car in at a dealership other than the one you are leasing the car from, that dealership will pay the buyout fee to purchase the car. If there is any positive equity leftover, they will cut you a check which you can put towards your next car.
If you have negative equity, they will still buy the car. However, you will have to pay them for the value lost on the car. That payment may be required upfront, or it might online installment loans Minnesota be added to the monthly installments of your new lease or financing agreement.
You can also do this with the dealership who you have been leasing from- and they might even offer some incentives to keep you around. This will vary from dealer to dealer and depends on a number of factors, so you will have to do your research to find your options and any deals available from your leasing company.
The CoPilot app isnt just for buying a car – our new CoPilot for Owning tool will help you keep track of recalls and gives you advice on which scheduled maintenance tasks are most important.
Trading in your lease vs. selling your lease
When you trade in your car, you probably won’t get as high of a return as you would if you bought out the lease and sold it to a private buyer. After all, dealerships are trying to purchase inventory at a discount to sell for profit.
However, trading in a car does come with several advantages. Trade-ins can often come with incentives on your next purchase or lease, which might make up for the extra money you could have gotten on your own in the marketplace. It is also one of the fastest ways to get your car into someone else’s hands and get that money in your wallet.
When selling on your own, you’ll have to list the car yourself, hoping that it gets seen by someone who wants to buy it. Once you find a seller, you have to wait for that person to get their money together on their own if they can afford to buy your car in cash or wait for them to secure financing. While this could potentially be a quick process, there is a lot of uncertainty. If you are at the end of the lease and having to decide whether to buy the car or just return it, the peace of mind of getting an offer and being able to trade your car in on the same day can be a great relief.
Thinking of buying a used car? A used rental car may be a good option for you! But before you do, be sure to check out the pros and cons of buying a rental car.
Get a curated list of the best used cars near you
The CoPilot car shopping app is the easiest way to buy a car. Tell us what youre looking for and well search the inventories of every dealership in your area to make you a personalized list of the best car listings in your area.
Only looking for newer models? CoPilot Compare is the search engine for nearly-new cars. You’ll only see cars 5 years or newer with low mileage, making CoPilot Compare is the best way to find off-lease, early trade-in, and CPO cars.
The best part? CoPilot is built using the same technology that dealerships use to buy and sell their inventories, so we have more info on each vehicle than competitors. CoPilot doesnt work with dealerships, so there are no sponsored posts or other shady practices-just the most info on the best cars. Check out our About Us page to see how CoPilot works.