Can I Trade-in a Leased Car Early?
One of the most significant benefits you find by leasing a car is affordable monthly payments.
Not only that but at the end of the lease time, you can hand in the keys to your dealer and walk away. Or, if you like, you can purchase the car you’ve been driving.
However, there may be circumstances when you’d like to trade-in your vehicle before the lease expires. By ending a contract early, say on a used Chevy Tahoe, you may face paying for associated penalties and fees.
Let’s understand what could be your best options:
1) Trade-in Your Leased Car
When you sign a lease, the contract consists of a payoff value, which is the cost you pay upon termination. At any given point in time, this payoff value is higher for leasing a car as compared to financing it.
Generally, this amount equals
residual lease value + pending payment amount – sales tax.
For example, if you’ve leased a used Chevy Tahoe and want to trade it in, your dealer will evaluate the vehicle and assign it a trade-in value.
“You can lease a car with bad credit and lower down payment.”
If it’s more than the lease payoff cost, the positive equity helps you buy or lease a new car, i.e., your dealer pays off this cost, and it goes against the trade-in value of the vehicle you rented.
If you have negative equity, it means that you have to shell out the upside-down amount to get a new Chevy Tahoe in this case.
What to Consider:
One option you have is to pay off the remaining amount and get out of the lease early. Paying off will be cost effective when you have only a few payments left or if you paid a high down payment.
“The best cars have good lease ratings as they depreciate less.”
Otherwise, if your leased car is nearing the mileage limit, the excess charge adds up to a substantial value. In this case, it will be a cost-effective option to pay some money and trade out of the lease early.
Take a look at the lease options offered by Dan Cummins and their inventory.
Also, many dealers offer incentives when you roll over the lease balance to buy another vehicle from them. Hence, talk to your dealer and decide on the right option for you.
2) Swap your Used Chevy Tahoe Lease
Another option for saving money while ending your lease early is to transfer your contract. You could have many reasons to do this, like not being to afford to make the payments anymore, or you might want to get a new vehicle.
Swapping your lease with someone else means that they will be taking care of the payments for the remaining time on the contract. By doing this, you can afford to buy a new Chevy Tahoe or lease one.
Before advertising, check whether your contract allows for lease transfers. Some automakers have their own financing companies that set the leasing rules, while others have a time limit for the transfers. This process usually has a transfer fee, but still, it can be the simplest way to terminate your lease.
3) Buy your Leased Car Before the Contract Ends
Not many people know that they can buy out their leased vehicle before the contract ends, known as an “early buyout.” However, that might include paying a buyout fee, based on the due payment amount and the vehicle’s residual value.
For you to have good equity, this buyout price has to be lower than the market value. Otherwise, you have to choose any of the other two options to break the lease.
“The burden of selling your leased car doesn’t fall on you.”
If you have good equity and can afford a buyout, you can avoid charges on excess wear and tear and mileage. Then you will be the owner of the car and can do as you please, including selling the vehicle privately and making a profit.
Discuss Options for Leasing a Car at Dan Cummins
You might be clueless as to what to do when the time on your lease contract is up. Do you purchase your leased, used Chevy Tahoe early or go for a new Chevy Tahoe? The friendly staff at Dan Cummins can answer all your questions and help you decide. Call us at 859-987-4345 to speak to our executives or click below.
Can I Trade in a Leased Car Early? | Dan Cummins Chevrolet & Buick – Paris, KY