You are hardly driving anymore. But how do you turn in your leased vehicle without losing a small fortune?
The once-rigid leasing process has become a bit more flexible thanks to new online information and resources. Before you decide which option to use, review your lease contract and note your monthly payment; how many months are remaining in the lease; the amount of additional lease-end fees; and the cost to buy your vehicle at the end of the lease.
The total of lease-end fees and remaining monthly payments is a good estimate of what you would have to pay to terminate your lease early.
Compare your buyout price to the current market value of your car on an online pricing guide such as TrueCar, Edmunds or Kelley Blue Book, or by getting a real cash offer from online car dealers like Carvana, Shift or Vroom, or your local CarMax.
If you are lucky, your car might be worth the same or more than the buyout price of the lease. If it isn't, you will have to find a way to make up the difference.
Option 1: Sell your car to a dealer. This is the fastest and easiest option. And, because the pandemic has created a shortage of used cars, your car might be worth more than you expect. You will get your best price from a dealership selling the same brand of car you are looking to unload, advises Alain Nana-Sinkam, a TrueCar vice president. So take your Honda to a Honda dealership.
However, if your residual value was low and your payments high, you might still be on the hook for a lot of money.
Option 2: Swap your lease. A lease-trading site like Swapalease or LeaseTrader, can help you find someone who needs a car and can assume the remaining payments.
For a fee starting between $75 and $100, you can post the terms of your vehicle's lease on these sites. Experts from these sites make sure the paperwork is completed accurately. Be sure to check your lease contract to see if it allows transfer to another party.
Another way to transfer your lease is to simply ask a family member or a trusted friend to take it over. Make sure auto insurance still covers the vehicle.
Option 3: Buy your car, sell it yourself. Most leases allow you to buy your car at any time during the leasing period for a predetermined amount — that early buyout price. Selling your car to a private party will bring a higher price than the trade-in or purchase figure from a dealer. However, it will require time and some money for advertising to find a buyer.
Option 4: Buy your car and keep it. Your leasing company may offer lease-buyout financing, but if not, many auto-refinancing lenders do as well. Some will loan you more than the car is worth, if your buyout price is higher.
