How I Got Paid at the End of My Car Lease

I never thought it possible, but indeed it happened. Rather than getting zero or paying a disposition fee, I actually got paid at the end of a car lease. Here’s how it went down.

How to Get Paid at the End of a Car Lease

First, Check if there’s Equity in the Car

So the first thing you have to do is your homework so that you can negotiate a lease buyout. Essentially, the transaction consists of you selling the leased car to a dealer.

Start by going to your car financing company’s website and adding up your remaining payments and the residual. This will tell you how much you have to pay to make the car yours.

Next, go to Carmax and Edmunds and get a couple of appraisals for the car.

If the appraisals are below what it would cost you to buy the car (your remaining monthly payments plus your residual), you’re out of luck – you probably won’t be able to get paid at the end of your car lease. However, if the appraisals are above what it would cost you to own the car, then there’s equity in the car and you might be able to recover some of it.

Next, Go to a Dealer

So if there’s equity in the vehicle, you have several options. The easiest (in my experience) was to go to the dealer who initially leased me the car, and told the folks there that I wanted to sell them the car. It (an SUV) had about $17,500 between the residual and the last remaining monthly payment, and was appraised online at a trade-in value of about $21,000. 

The dealer made me wait for a while, and came back with an offer of $19,000. We haggled and wound up settling at ~$20,300. I left the car at the dealership, and am expecting a check in the mail for the difference between the residual value plus last payment and the price we sold the car for (about $2,300).

I don’t have to do anything else. The dealer will take care of paying off the car and transferring ownership from the finance company to itself.

Or, You can Pay Off the Car Yourself and Sell It

A second, more complicated option is to actually pay off the car yourself, and have the finance company release the title to you. This is more complicated because it involves buying the car, owning it, and then selling it. You’ll have to shell out the money to pay off the car, carry the risk of owning the car outright before you sell it, and update your insurance and government records.

The upside is that you may be able to get a better deal. Since you would own the car outright, you can sell it to a dealer, a company like Carmax, or even a private party. In my case, the private party appraisal was about $24,000, so I might have been able to make a few thousand dollars more for the hassle.

You Can Also Do this to Reduce the Cost of Your Next Lease

If you are just getting a new lease, still make sure to verify whether you have equity in your current leased car. If you do, bargain with the dealer and apply that equity to your new lease. In essence, the dealer will buy the car from you, pay off the leasing company, and apply the remainder as a down payment towards your new lease. 

Getting Paid at the End of a Car Lease is that Simple

Simple, and pretty easy. It took us about 90 minutes at the dealership to complete the transaction, and we’re getting an unexpected couple of thousand dollars. Now, this may not be possible with all leases and in all market conditions. (Right now, the used car market is hot). Still, it’s absolutely worth a shot!