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.