Leasers profiting in high used car market - NBC12.com - Richmond, VA News

Leasers profiting in high used car market

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RICHMOND, VA (WWBT) - If you lease your car, you may be able to make money by selling it.

Reid Burford leased a 2010 Mini Cooper for two years.

"Loved the car, but it wasn't practical for our family," he said.

So he decided to sell it. How is that possible when he didn't own the car?

"I did a bit of research and found out the car was worth quite a bit more than the lease payout, so I had equity in the car and it made sense," Burford explained.

He had CarLotz, a consignment used car seller, sell the car for him for a fee.

A CarLotz employee explains how it works: "The price point on comparable vehicles would be in the $19,000 to $20,000 range. So if you owe $15,000 on your lease and we target $19,000 on the low end and hit that price, you'd have an opportunity to make, even after our fee, between $3 and $4 thousand dollars."

And that's exactly what happened.

"It was $3800, so it was a very nice check," said Burford.

CarLotz founder Michael Bor says it's a little known concept.

"Every leased car has a buyout value. And that's the value that you, the car owner, would need to pay to buy the car. And you can buy the car at any point during the life of the lease," he said.

Because used car prices have gone up in recent years, leasers may be able to sell the car for more money than the price to buy it from the dealership, which may have been pre-determined when the lease was signed a few years earlier, before used car prices rose.

Bor says you may also be able to make money even after used car prices go back down.

"This opportunity exists as long as the market value is greater than the buyout value of your lease. As car values will come down, not only will market values come down, but also buyout values will come down," said Bor.

But do your homework to find out how much your leased car is worth in the current market before you buy it from the dealer.

"I think a lot of people don't realize they have the option to sell the car at the higher price than their lease payout," Burford told us.

You can research your car's resale price on websites like edmunds.com, autotrader.com, vehix.com, and cars.com.

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