Can I trade in my lease?
When you lease a vehicle at Fiore Toyota, you agree to pay for the depreciation of the vehicle during the period you drive it and to give it back or purchase it at the end of that period.
Technically, the leasing company owns the vehicle, so you must follow their rules when it comes to any decisions about the car. You do have options that can switch up the conventional leasing process, however. Keep reading to get to know other possible routes to take when your lease is ending. If you still have questions, talk to our staff at Fiore Toyota for more information on your lease-end.
Trading in a Leased Vehicle
Unless you made a really big down payment, had a valuable trade-in at the start of the lease, or the leasing company under-estimated the residual value of your car, then it’s likely you have no equity.
But, if you do happen to have lease equity, then you can use it towards your next purchase or lease. It’s also possible for you to go to a dealer willing to buy your leased car and give you trade-in credit towards your next vehicle.
Trading in a leased car is different than trading a purchased vehicle. If you’re trading in a leased car to a dealership and/or terminating the contract early, there are a number of penalties and fees that must be paid to the leasing company, and the contract still must be dealt with.
Let’s go through the two main situations of trading in a leased car to a dealership:
- The dealer pays off your lease balance and buys the car from the leasing company. The wholesale value of the car will then be used as a trade credit, minus the termination charges they paid.
Keep in mind, though, that oftentimes the payoff value exceeds the trade-in value, so be prepared to have that amount added to your new purchase or lease instead of getting any cost taken off - The dealer will cover the rest of your lease payments, return the car to the leasing company, and give you no trade in credit.
This way, you can get a new ride and not have to worry about your lease anymore. But, it doesn’t help pay for that new car and you’ll still be responsible for the normal lease-end charges like damages, excess mileage, etc.
Trading in your leased Toyota might be a good option if you went over the mileage cap or the wear-and-tear greatly exceeds the normal amount indicated in your lease. But you should calculate these fees and see if it would make sense to just pay them and turn it in or if trading would be more cost effective.
More Options to Consider at your Lease-End
Normally, it isn’t a good idea to end a lease prematurely due to the significant amount of the early termination costs and the complicated nature of breaking a lease. But it’s still useful to know the alternatives if you really can’t wait until the end of your contract.
There are sometimes incentives at dealerships that help pay for early termination and purchasing a new car if you owe less than a year’s worth of payments on your contract. Banks can also have early lease-end options if you decide to use the same one for your next lease or purchase. Call your bank to find out or call us at 814-205-9804 and ask about any early termination incentives.
Another option is to privately sell the leased car yourself. But, you must sell it for enough to pay off the payoff value or you will need to come up with the difference.