If you currently have a leased car that’s coming to the end of the term, then you’re probably aware of your options when the lease ends. One of the most popular options is to give the car back to the dealer and then walk away, assuming that you didn’t go over the mileage allotment or damage the car. However, did you know that your leased car might have some positive equity that you can cash in on?

How can you have positive equity in a leased car?

If your leased car’s market value is worth more than what you owe, you can have positive equity on a lease. We know it sounds unorthodox, considering you don’t own the car, but it works just as well. As an example, one of our editors sold his leased 2019 Subaru Forester Sport to Carvana a couple of years ago.

The payoff amount to buy the car outright from the leasing company (Chase) was a little more than $24,000. He ended up doing his due diligence and shopping around for appraisals with Carvana, Carmax, and Vroom. Long story short, Carvana offered him around $27,000 for the car. After carrying out the process of selling the car to the used car retailer, our editor walked away from the lease with a $2,900 profit.

In today’s used car market, in which many cars are selling for more than they cost when they were new, many other lessees can potentially cash in when their leases are up. According to Forbes, “Off-lease vehicles in the second quarter were worth as much as $8,000 more than leasing companies thought they would be 36 months earlier.”

That means that many lessees could potentially make up for the money they spent over the course of the lease and then some.

Can you use positive lease equity toward a new car?

Yes. If you would rather trade in your lease for a new one and the dealership’s appraisal gives you positive equity, then you can use that toward a newer car. Although, in these crazy market times, we would suggest financing a new car over leasing one since values are inflated across the board. It may technically be a seller’s market right now, but car buyers can profit and take advantage of the situation with a little research.

Do the research on your leased car before the term is up

When the lease term on your car is almost up, we recommend doing as much research as possible to make the right decision. In some cases, buying the car outright instead of selling it or trading it in could be the best decision. Especially if you really like the car.

However, if you plan to get rid of it instead – and you haven’t gone over the mileage allotment – it’s important to shop your leased car around. Get appraisal quotes from dealerships near you in addition to online retailers like Carvana and Vroom. Obtaining an appraisal from Carmax is quick and easy as well.

After receiving the quotes, you can go with the highest bidder or use it as negotiation fodder if you want to trade the leased car for a new one. With a little leg work and research, you may find that your leased car has more equity than you thought.