If you’re currently leasing a car and need to get out of it early, then you might be wondering what your options are. I actually wrote a story on this topic earlier this year entitled, “How To Get Out of Your Car Lease Early,” and while I hope that it helped at least one person that read it, I never thought that it would actually help me as I ended up taking my own advice. I recently sold the 2019 Subaru Forester that I leased just last year, and to my surprise, I actually got some money back.
Leases are usually meant to break even
Typically, when you lease a car and make your payments all the way until lease matures (ends), you can then turn the car back into the dealership and walk away or even trade it in for another car. The point is that once you have fulfilled all of your lease payments according to the contract that you signed, you will break even with what the car is worth at the time. The only issue is that you just paid all of that money for three years, per se, and are left with nothing to show for it.
But one option that is typically overlooked by lessees, or those who lease a car, is the option to sell it to a dealership. What that means is that you can sell the car to a third-party dealer like Carmax or Carvana and walk away from it that way. This works especially well if you’re trying to get out of a lease early like I was.
My lease story
I originally leased my 2019 Subaru Forester because I was moving from California to Colorado and needed a car that could not only fit a lot of my stuff in it but could also handle the inclement weather that the Rocky Mountain state is known for. I put $1,300 as a down payment and was set to pay $367 a month for 36 months with 10,000 miles per year. However, a year after leasing the car, I realized that it didn’t drive it much at all.
I work from home, drive press cars most of the time, and live within a walking distance to everything I need, so there was really no need for me to have a nearly new Forester sitting outside collecting dirt and whatever else the Colorado air could throw at it. In fact, the car hadn’t even seen a gas station in almost three months! So I had to get rid of it.
If you’re looking to sell a car that you’re leasing, then the first step is to find your “payoff amount,” which you should be able to find online when you log into your lease account. Mine was around $24,290, which is how much I, or a dealer, would need to pay in order to own the car free and clear from Subaru. After finding out this number, I decided to take my own advice and get it appraised at Carmax first. The process was simple when I got there, they looked over the car and made me an offer of $26,000 within 30 minutes.
That meant that if I sold the car to them, I would get a check back for the difference, in this case, it would be $1,710. Not bad, since I put down $1,300, right? But I’m never one to just stick to the first offer and I wanted to make sure that I was getting a good deal, so I checked with Carvana as well.
The easiest way to sell a car
If you have never heard of Carvana, just know that it’s a virtual car sales operation that buys and sells used cars completely online, which is a godsend. All I had to do was log onto to their website, enter in my vehicle’s information, and within a couple of minutes, to my surprise, they gave me an offer of $27,239. Sold!
The steps that followed were just as easy. I uploaded pictures of my driver’s license and vehicle registration and then got on the phone with one of their agents. All they needed to do was get the official payoff amount from the lender (and whatever other paperwork needed) and then set up an appointment to come to pick up my car. A few days later, a Carvana agent came to my house, inspected and drove the car, had me sign a few documents, and then cut me the check for $2,948 right then and there. It couldn’t have been easier.
RELATED: Beware of the Low Mileage Car Lease
What do I mean by “kind of?”
While I can easily tell you that I made a profit of $2,948, that’s technically not entirely true if you do the math. Considering I made monthly payments for the time that I had the car and put down $1,300, I essentially paid around $2,800 to Subaru for the entire time that I had it. But if you don’t count the money that I spent to use the car, then I made out like a bandit.
While I was able to turn in my lease early and theoretically get some money back from doing so, I wanted to make it known that this might not work for every lease. I was lucky in that I found the “sweet spot” during my lease term where the car was still worth a good amount and my payoff amount was less than what Carvana offered me. Another factor is that Subarus have high residual values, so that worked in my favor as well.
This method might not work so well if you have an Audi, for example, which is known to have lower residual values. In that case, you might end up owing money and it might not be worth it to turn in your lease early. Just do your research and find out what works best for your situation.