Getting the Equity Out of Your Leased Car


One of the pillars upon which automotive leasing rests, residual value is a key determining factor of your monthly lease payments. It can also be the mechanism by which you can profit at the end of your lease. 

While the industry is good at predicting these values, there are times when it gets them wrong. Market fluctuations as well as unanticipated popularity of a new model can make a car worth more than its residual amount. 

When this happens, there’s money in it for you. 

Here’s how to go about getting the equity out of your leased car. 

How to Determine If You Have Equity

Checking the value of your car as a used model will very quickly establish whether you should turn it in and walk away — or hold on until you get your cash. If the value of the car is lower than the residual amount, just let it go. If it’s higher, you’re in business. 

Sites such as, and have used car valuation calculators you can use to determine the fair market value of your car. If you still have some time left on your contract, get in touch with the leasing company to find out how much it’d cost to buy out the lease. With that number in hand, you can easily see if trying to wring the equity out of it would be worth your while. It’s important to understand this when you’re learning how to lease a car.

Extracting the Equity

Sell It and Keep the Difference

You are perfectly within your rights to sell your leased car — as long as you have permission to do so from the leasing company. You have a couple of choices in this regard. Any dealer can accept the turn-in of a leased car. Treated as a used car purchase, they will pay off the leasing company and you can request a check be cut for you. 

However, you’ll sacrifice quite a bit of money going that route. Remember, dealers buy at wholesale and sell at retail. This means they will offer you considerably less for the car than you could get on your own. You’re perfectly OK selling the car on your own, paying off the leasing company and keeping the difference. 

Use It as a Trade-in

Rather than selling the car outright, you can use the equity as a down payment on your next car. Keep in mind though, you’re back to the wholesale vs retail scenario. However, a dealership might be willing to be a bit more forgiving if it means selling you a car off their lot.

This can be an especially effective approach if you’re staying within brand. Dealers often have a number of incentives from manufacturers they can afford buyers who are trading like for like. Loyalty tends to pay dividends. 

Still though, you have to do your homework to ensure you get the maximum benefit from each dollar at your disposal. You also want to be careful to ensure they don’t roll any additional costs into your next transaction — while making it appear as if they’re giving you an allowance for the value of your lease turn-in. Get an exact quote from the dealer on the amount of equity you have and be certain that number is reflected in your sales or lease contract. 

Getting the equity out of your leased car typically involves selling it in some way — as opposed to just turning it in and letting the leasing company keep the money. That cash is yours; they agreed to it when they drafted the leasing agreement. So take some time to see what your leased car is worth before you return it.

You might be pleasantly surprised.