Can You Trade in a Lease?

A leased vehicle is owned by the leasing company, and your lease contract stipulates that you will return the vehicle to the dealership—or purchase it—at lease-end. You’ll also pay for any depreciation of the vehicle during the period you drive it. Can you trade in a lease for a new lease contract? It depends. Trading in a leased car for a new lease is an option if your current car lease has any equity. In other words, you may be able to leverage the residual value in your lease contract to save money on your next lease. Find out if a lease trade-in could work for you with this guide from the auto BMW of Mamaroneck finance center!

Trading in a Leased Car for a New Lease

There are two ways that a lease trade-in might work for Mamaroneck drivers: the dealership uses your vehicle’s wholesale value as a credit to pay off your balance and purchase the car from the leasing company, or the dealer covers your remaining lease payments and returns your car to the leasing company. So can you trade in a lease in your situation? Take these steps before trading in a leased car for a new lease:

• Determine if your current car lease has equity. Also known as the residual value, equity is the amount you can buy the car for at the end of the lease. Leasing companies predict what cars will be worth at the end of the lease term, and it is the basis of the lease calculation.
• Get the trade-in and private-party values of the car. You’ll need to compare your car’s trade-in value against the amount the dealer offers to pay you for it.
• Find the residual value in your lease contract. Subtract the residual value from the trade-in value to approximate your car’s equity. Knowing the current market value of your leased car will strengthen your negotiating position.

Can You Trade in a Lease Early?

In most situations, an early lease trade-in isn’t worth the termination costs and the complications of breaking a lease. But if you really do need to break your contract before lease-end, can you trade in a lease early? Harrison drivers can take advantage of the following lease trade-in options:

• Dealership incentives can help pay for early termination and the cost of a new car if you owe less than a year’s worth of payments on your contract.
• If you decide to use the same bank for your next lease, they may offer you early lease-end options.
• You can also privately sell the leased car yourself, but be sure you sell it for enough to cover the payoff value or you will need to come up with the difference.

Explore Your Lease Trade-In Options with BMW of Mamaroneck

Questions about trading in a leased car for a new lease in New Rochelle? Our auto finance experts are happy to help you calculate your monthly lease payments and residual value. Stop by our finance center in Mamaroneck or contact us to learn more about what a lease buyout is, how to sell a car at a dealership, if you can take over a car lease, if you can lease a car with bad credit, about our savings options, our BMW SUV lease options, BMW convertible lease options, and more.See other finance tips such as how you can order your next new luxury car from our dealership and have it ready to bring home.