A rule of thumb in personal finance typically suggests leasing a car is a poor decision. Generally, leasing involves throwing money towards a car that you'll have to return in a few years - and critics claim consumers lease cars to be able to drive around in a more expensive car. But since the value of used cars has risen recently, consumers can now turn a profit when the lease is up.
According to the NADA Used Car Guide, used car sales peaked in June and are now starting to fall, but despite the minor drop, used car prices are still relatively high. That means there could be some money in trying to sell that car yourself instead of trading it back in when the lease is up.
Consider buying the car back from the leasing company and then selling it privately for a profit: Let’s say in order for you to buy back your leased car, the leasing company wants $15,000. However, you know you could sell the car for around $18,000 if you were to post an ad in the local newspaper.
Even better, if you know someone who’s interested in purchasing the car you are leasing, you can close the deal while still under lease, then have the buyer pay the leasing company the $15,000 and pay you the $3,000 ($18,000 – $15,000) directly as your profit. This way you get rid of the car and get your cash at the same time, in case you don’t have the ability to write a check to buy back the car in the hope of selling it later.
You may be wondering why the leasing company would be willing to sell you the car for $15,000 knowing that you can go out on your own and sell it for $18,000. The answer? The leasing company is not interested in owning cars.
Even if you didn’t buy back the car and simply returned it to the company, the leasing firm would most likely sell it anyway. For them, it's in many cases easier for a lessee to buy back the car so the leasing company doesn’t have to worry about selling it – even if it means the company sells the car for a lower price.
After you buy back your car upon completion of the lease, if you choose to sell the vehicle (again, hopefully for a profit), that is a huge undertaking. You have to find a qualified buyer and it will cost time and money to post an advertisement in the newspaper or online. Plus you have to deal with the uncertainty and legwork involved in making the sale.