For rental drivers, the gap between the forecast price and the current market price can be significant. The automatic search site iSeeCars recently compared current prices for three-year-old cars with the estimated redemption value of new models leased in 2018 and found that the average car could cost 36 percent more than the estimated value at the start of the lease.
Nov 19, 2021 8:13 AM ET
For some models, the gap may be even wider. The current market value of the Volkswagen Tiguan, for example, could be $ 9,800 higher than forecast three years ago, up 69 percent. Even the subcompact Nissan Versa has jumped more than $ 4,300, or more than 50 percent, according to iSeeCars. The analysis was based on a database of nearly 10 million new and used vehicle listings.
So, if you like your car and it is in good condition, it might make sense to purchase it after your lease expires. “You should think very carefully about buying a car, not returning it,” said Karl Brower, executive analyst at iSeeCars.
Consumers are increasingly doing just that. Daniel Behrs, chief executive of GM Financial, General Motors’ financial services division, said at an investor conference in August that 89% of renters purchased their vehicles at the end of their lease in the second quarter of this year, up from about 20 percent a few years ago.
You can also buy a car and then resell it yourself for a profit. But you could owe sales tax, and there is another catch: if you need a different car, you won’t have an easy time finding one that you like at a reasonable price.
An alternative would be to use “equity” in your lease – the difference between the current market valuation and the buyback price – to reduce the cost of leasing a new car, said Edmunds’ Drury. In fact, you sell the lease to the dealer, who credits the amount received to your new vehicle.
Jeff Pearlman, an independent public relations consultant based in Los Angeles, said he prefers to drive new cars and was able to use a rental share from the 2019 Genesis G70, a luxury sports sedan, to rent a more expensive, redesigned 2022 version. out of the car. According to him, he did not need to invest money, and he only pays $ 38 more per month. “I’m incredibly happy,” he said.