Soaring demand in the used car market has driven prices to all-new highs, which means that GM customers facing the end of their vehicle lease could turn a profit by purchasing their leased GM vehicle.
Per a recent report from Edmunds, many consumers may be in a prime position to make thousands of dollars off their leased vehicle. For those buyers with a vehicle lease set to end in 2022, it is advised to check for equity prior to turning in the vehicle, given the current used vehicle market.
“Most consumers likely aren’t aware of the other options they have besides turning in their lease once it’s over, including the ability to make a profit from their vehicle,” said Edmunds executive director of insights Jessica Caldwell. “If you have a lease expiring this year, do the legwork ahead of time so you’re prepared with a game plan and smart financial options.”
In an analysis, Edmunds looked at the estimated residual values for 2019-model-year vehicles leased in February or January of 2019 and compared those residual values to the trade-in values for 2019 model year vehicles that were traded in during January and February of 2022. Edmunds found that on average, the 2022 trade-in value for all 2019 model year vehicles was well above the original estimated residual value, up an average of 33 percent, or $7,208.
The Edmunds analysis included two GM vehicles, specifically the 2019 Cadillac XT4 and 2019 Cadillac Escalade. Per the analysis, the Cadillac XT4 trade-in value was evaluated at $34,149, a 39-percent increase over the original residual value of $24,599, or $9,550. With regard to the Cadillac Escalade, the 2022 trade-in value was estimated at $60,988, or an increase of 35 percent ($15,806) compared to the original estimated residual value of $45,182.
To take advantage of the current used car market, Edmunds suggests that customers find out exactly how much the leased vehicle payoff amount is, and to find out how much that vehicle is worth in the used market to determine a possible profit.
Comments
Drive by a CarMax lot lately? Two of then near me are packed with vehicles with not much room left. So why are trade in’s getting ridiculous prices cause huge prices for “pre owned” vehicles. I don’t think they are selling in numbers as the used car industry wants you to believe. Definitely there are more profits are being made per vehicle.
Have you driven by any “new” car lots lately? I drove by a KIA dealership and they didn’t even have any new cars to display in their showroom – completely empty.
It’s weirdly hit and miss in my town. Ford, GM, Kia and Nissan dealerships are selling pre-owned tumbleweeds, but the Mopar, Honda, and the Germans are all chock full of supply.
Sales being what they are it just seems like luck of the draw who got microprocessors this month vs. last month.
GeorgeS- it’s the same here at the Carmax in East Haven, Connecticut. They are running out of room where to put the cars unlike the car dealers who have plenty of room because they don’t have any cars. If they do have any cars then they are selling at sticker price or higher. My 2020 Chevrolet Malibu premier buyout figure in September of this year is 18,900 I believe. Kelley Blue Book has it valued for private sale at some thing like 31,000+. So it doesn’t take a Yale degree to figure out that I should buy it especially with only 15,000 miles on it right now and every option. I could sell it privately because I do have two other vehicles that I could drive one of which is my mom’s 2004 Chevrolet Aveo LS Sedan with 33,000 miles on it which was purchased new in May I believe 2004! With the gas price going up $.25 a gallon overnight last night I might just have to take it out of the garage and start driving it.🤦♂️🤦♂️🤦♂️🤦♂️
Well they are paying a high price for cars for sure. Then to buy one it’s a wash. Great place to buy now however. We have a terrain and I believe it’s worth buying out for the prices they’re asking for it new or even used
Didn’t some of the Germans and Toyota stop letting you buy out your lease because they wanted the product to mark up as CPO?
GMF will only let you sell it back to a GM dealer, not an independent
Get rid of McConnel, Biden et.al.and watch the prices return to normal
Economic backwash takes about two years to have an impact on the economy. The lying orange ape that was in the White House is more responsible than Biden. It’d be much worse if Trump was in office and he probably would endorse Putin actions. Oh, he already has.
Tell me How The Orange Ape, has anything to do with gas prices. The day The White Ghost took over, (Jan 6th 2021) the price of regular was $1.67 per gallon. I believe that’s the day our ghost canceled the pipeline. What is the price today? Mine is $3.76 per gallon. Good luck DA!
You are a DA my God you are dangerous
Almost as dangerous as your rant yesterday.
But trumps not in office George and you have no way to know if it would be worse or not.
Sold my leased 2021 CT5 back to the dealer in December for a $6,000 profit because we didn’t like the car. Luckily I was able to find a 2019 CT6 Platinum with low miles at an excellent price. It too is now worth more than I paid for it, but we won’t be selling it as I absolutely love the car!
What didn’t you like about the CT5?
We replaced a 2017 CT6 Lux 3.0TT with the CT5. The ride paled in comparison. I also should have paid attention to the reviewers that said the trunk was small. That’s an understatement. Every time I went to Costco, and we don’t even buy that much for two people, I had to put stuff in the back seat because it wouldn’t all fit in the trunk.
The CT5 was a Premium Luxury with the 3.0TT and most of the option packages excluding AWD and Super Cruise. I went with the 18″ wheels to hopefully get a better ride than the 20″. Also, even though we live in Phoenix, I missed the AWD on the rare occasion we have wet roads.
I mainly use the car to travel back and forth to Tucson 2x a month which is 320 miles round trip so the ride was important.
Mark curious to hear more about the logistics for the $6k profit. Did you have to buy the lease out directly yourself, then sell to the dealer for the profit? Or did the dealer take the lease off your hands directly and provide you the lease equity?
This current inflation is crazy. Gold is hitting near $2,000.00 per ounce today. Retail fuel prices are through the roof. Residential home prices in the Intermountain west are up 30% in a year. Rents went up 5 to 10% in a year. The war in Europe like Covid will add to inflation. We are in a perfect storm now for a 20 to 30 % inflation increase.
All dealers and resale lots are chasing each other to get an inventory of vehicles and greedy customers are buying it. From FB and other car forums, an awful lot are trading on less than one year old vehicles for a profit, but then they have to pay more for something else. It’s crazy.
GM will not let you sale your lease to Carmax. You must have the title in hand, first. (Another block by GM to satisfy customers.) However, one can sale to a GM Dealer without the title…go figure!
GM is only in the business of selling very expensive vehicles, so giving up market share for profit. Is it the right move, I don’t think so when their main profit maker is a full sized truck and gas is going to 5 dollars a gallon. But I’ve been watching GM do stupid stuff for 40 so I’m not surprised. Maybe the government will bail them out again