Leasing your current vehicle? Are you going to love it or let it go?

Leasing a vehicle—it’s an alternative to buying, but how many people choose this purchasing option? In 2020, nearly a third of new car shoppers chose to lease their vehicle. * However, new car demand is exceeding supply in recent years. In this current environment, automakers and dealers make more from a sale than a lease. Are there still advantages to leasing, and more so, is buying your lease at the end of your term a good option?

Advantages to leasing

With a lease, you’ll likely have a lower monthly payment and drive a vehicle that may be more expensive than you could afford to buy. The vehicle is usually covered by the manufacturer’s new car warranty, which may even include oil changes and other scheduled maintenance. Plus, you don’t have to worry about fluctuations in the car’s trade-in value, since the lender has already calculated the residual value—the amount you can buy the car for at the end of the lease—at the beginning of the lease agreement.

Have you considered leasing a vehicle in the past? Are you currently leasing a vehicle? If you’re nearing the end of your lease agreement, you may be in for some good news!

Lease buyback

According to Edmunds data, the average trade-in value of 2020 leased cars is 19% more than the predetermined residual value. This means you may be able to capitalize on that difference instead of simply turning in the car.

If you like the vehicle you’re leasing, it may be worth it to buyback your vehicle when the lease ends. With vehicles holding their value, you could purchase it for less than you would from a dealer. If you go that route, consider shopping auto rates and apply for pre-approval before you head back to the dealer.

You may even be able to sell it for profit. Before you consider this option, find out what your vehicle is worth. Sites like Carfax.com or Edmunds can estimate the value and help you determine if you could benefit by buying out the lease and turning around to sell the vehicle on the open market.

Whether you’re entering into a lease or deciding what to do at the end of your term, remember to assess your unique financial needs to help guide your decision. And remember, our financial coaches can help if you need guidance.

Are you ready to capitalize on the equity in your lease?

Get Started with My Auto Loan