Selling a Leased Car: Dealership vs Private vs Online Options

If you're locked into a car lease that no longer fits your needs or budget, you might think you're stuck until the term is up. But the truth is, you can sell a leased car - and you may even be able to profit off the sale. The key is weighing your options and choosing the most financially savvy path for your situation.

In this guide, we'll break down everything you need to know about selling a leased car, from calculating your equity to deciding among a dealer trade-in, private sale, or online lease buyout. We'll also explain how to transfer a lease to a third party if you'd prefer to skip the selling process altogether. Let's dive in.

Should You Sell Your Leased Car? Calculating Your Equity

Your first step in deciding whether to sell your leased car is figuring out your equity position. In simple terms, your equity is the difference between your lease buyout amount (residual value + remaining payments + fees) and your car's current market value. Here's how to calculate it:

1. Find your residual value: Check your lease contract for this figure, which is the preset price at which you can buy your car at the end of the lease term.
2. Get your current buyout price: Call your leasing company and ask for an up-to-date lease buyout quote, which will include your residual value plus any remaining payments and fees.
3. Determine your car's market value: Use an online valuation tool to estimate your car's resale price based on its year, make, model, mileage, and condition.
4. Subtract your buyout from your market value: If the difference is positive, you have equity. If it's negative, you're underwater on the lease.

If you have positive equity in your leased vehicle, selling it could put some cash in your pocket or give you a jump start on leasing or buying your next ride. If you're underwater, you'll have to pony up some additional funds if you want to get out of the lease early. Or, consider riding out the lease to avoid the financial hit.

Option 1: Sell Your Leased Car to a Dealership

Trading in your leased car at a dealership is often the path of least resistance. You can hand over the keys and walk away in one fell swoop, often with the option to immediately lease or buy a new car. But the convenience may cost you in terms of the price you get for your vehicle. Here's what to know about this approach:

• You'll likely get less for your car than through a private sale, as dealers need to make a profit when they resell the vehicle
• Lease-end fees like disposition charges still apply, though some dealers may waive them if you lease a new car from them
• If you don't have equity in the car, you'll need to pay the difference between the lease buyout and the dealer's offer
• To maximize your offer, get quotes from multiple dealers and focus on those that sell your car's brand (e.g., Toyota dealers for a leased Camry)

When you're ready to make a deal, bring your lease contract, buyout quote, and vehicle registration to streamline the process. The dealer will handle the paperwork and payment to the leasing company, leaving you free and clear.

Option 2: Sell Your Leased Car to a Private Party

If you have equity in your leased car, selling it privately could help you pocket more cash than trading it in at a dealership. Private buyers are typically willing to pay more than dealers, as they're not looking to resell the car for a profit. Here's a rundown of this route:

• You'll need to buy out the lease from the leasing company first, which means having the cash to cover the residual value, remaining payments, and any fees
• Once you own the car, you can list it for sale on sites like CarGurus, Craigslist or Facebook Marketplace, screen buyers, and handle payment and title transfer yourself
• Estimate your car's private party value to set a competitive asking price, but be prepared to negotiate
• The sales process may take longer than trading in at a dealer, and there's always some risk when meeting with strangers for a test drive or sale

Private party sales require more legwork than a dealer trade, but could be worth it if you're looking to maximize your profits. Just be sure your car's market value is high enough to cover the lease buyout and still leave you with some cash in hand. Otherwise, this approach may not make financial sense.

Option 3: Sell Your Leased Car Online

If you want the speed and ease of a dealer trade with the higher payouts of a private sale, selling your leased car online could be the perfect middle ground. Services like Motorvero's Instant Max Cash Offer let you get an offer for your vehicle and complete the sale fully online, with no dealership visit required. Here's how it works:

1. Answer a few questions about your leased car's condition, features and mileage
2. Motorvero searches its nationwide network of dealers to find your highest offer
3. If you accept, Motorvero contacts your leasing company to get a lease buyout quote, then completes the purchase on your behalf
4. They'll pick up your car for free, handle the lease payoff, and cut you a check for any positive equity

The online sale approach takes most of the hassle out of selling a leased car. You don't have to come up with the cash for the lease buyout yourself, or deal with the paperwork of transferring the title to a new owner. And because Motorvero is pulling from a database of thousands of dealers, you'll likely get a better price than trading in at a single dealership.

As with a private sale, you'll want to make sure your car's buyout is less than its market value for this method to make financial sense. Use an online valuation tool to estimate your car's worth, then compare it to your buyout quote to gauge whether selling online is a smart move.

Bonus Option: Transfer Your Lease to a New Owner

If you'd rather skip the selling process altogether, you may be able to transfer your lease to another person. Also known as a lease swap or lease assumption, this approach involves finding someone to take over your lease payments for the remainder of the term. Here's what you should know:

• Not all leasing companies allow transfers, so check your contract first
• You may have to pay a lease transfer fee, typically a few hundred dollars
• Websites like SwapALease and LeaseTrader can help match you with potential lease assumers
• You may still be liable for the lease payments if the new lessee fails to make them, so choose your replacement carefully

Lease transfers can be a good option if you're underwater on your lease and don't have the cash to cover the difference, or if you need to get out of the lease quickly and don't want to deal with selling the car yourself. Just be sure to vet any potential lease assumers thoroughly to avoid future financial headaches.

The Bottom Line on Selling a Leased Car

While selling a leased car takes a bit more effort than selling one you own outright, it's very doable - and could even put some extra cash in your pocket. The key is figuring out your lease equity, exploring your selling options, and choosing the approach that best fits your financial situation and goals.

If you have the time and energy to list the car yourself, a private sale will likely yield the highest price. If you need a quick and easy exit, an online sale or dealer trade may be the way to go. And if your car is worth less than the lease buyout, a lease transfer could be your ticket to freedom.

Whichever path you choose, just remember to run the numbers carefully and read the fine print on your lease contract. With a little due diligence, you can make a smart, financially savvy decision on selling your leased ride.