Positive Lease Equity - strategies?

[Junior88]

Hey All,

My 39 month lease has only 5 months to go and I’m walking into a situation that has the bank and dealers chasing me like a dog would a rabbit.

It’s a ‘20 Overland North Edition with 29k miles and a sticker price of $51k. My residual value is $31k and dealers are selling comparable Overlands for $43-$44k in my region. Vroom is offering $38k (but we know US Bank won’t let that happen)

I’ve never been in this situation before so looking for some strategies that could work. So far US Bank has made me an offer to waive my next 6 payments, all lease end fees, and refund 2 months of payments to pick it up within a week. Sounds like an endearing, convenient option but I’d rather buy it out myself and either hang on to it or roll the dice in market to get $10k+ profit on it.

Has anyone successfully negotiated that equity into a loyalty credit on a new car and been happy with the deal? Or some other approach? Maybe some insight to how the bank offer might evolve?

Would love to hear any thoughts or tactics that could be helpful in this situation

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[GRAN1TE JT]

Not to hijack this thread, but I’m in essentially the same boat. My 42 month lease is up in July and my buyout is ~28k. Mines only a sport s but I’ve seen a few similarly modified ones selling for 35-40k. I’m thinking of just buying it out. Worst case, I can sell it for a little bit more. But I’m just worried about current interest rates. I know there’s no way in hell I can get a decent rate at the moment. Hopefully some people have more insight and can help us out!

-And anything reasonably similar to buy is crazy expensive! So not many cool other cars/truck I’d buy to replace it

 

[Florida Mojave]

Similar situation here...my wife's JL was a lease, we rode it out until the month before lease end. Went to the dealer negotiated a deal on the model she wanted, then I told them I was trading in a leased vehicle. After a few back and forths I got what I wanted for the JL against the new one. The equity in the lease return was a substantial down on the new one so it can be done....but you're right, they aren't chasing you because they like your vehicle / they smell blood....use it to your advantage and don't be in a hurry.
If your going to purchase a new JT you should think about Tri-City or Gupton, at least they can be trusted.

 

[ZoMojave]

I had a 36-month lease on my 2020 Ram 1500 with a 30K residual at the lease end. My dealer wanted it (18,000 miles) and offered me 40K for it six months before the end of my lease. I contacted my lease company and they stated there was no penalty for ending my contract six months early if I were to purchase the Ram. So, I purchased the Ram through my credit union and ordered my JTM the next day. I ended up making one payment and drove it while waiting for my JTM to arrive (just over four weeks-got lucky). Traded it off for the agreed amount and had an extra 10k equity to put toward my Mojave.

Keep in mind this was a year ago when the market was really crazy.

 

[Mabags]

I recently had a very difficult time getting out of a US bank lease, my buyout price was only for me, dealers could not use that price as a payoff number for trade in, I had to wait until I made my final lease payment to trade and then had to refinance the new vehicle through US bank to receive any equity on trade in. My residual was the same as yours on a 20 Overland, 36,000 trade in value, after taxes didn't leave me as much equity as I was hoping for.

 

[ZoMojave]

I recently had a very difficult time getting out of a US bank lease, my buyout price was only for me, dealers could not use that price as a payoff number for trade in, I had to wait until I made my final lease payment to trade and then had to refinance the new vehicle through US bank to receive any equity on trade in. My residual was the same as yours on a 20 Overland, 36,000 trade in value, after taxes didn't leave me as much equity as I was hoping for.

Yes, I had to pay the taxes on my buyout of course. But when trading, I only had to pay taxes on the difference between my trade and the new JT (about 15K). Still, way better than I ever imagined and made my current payment affordable enough to put a few extra bucks toward it each month.

Now a year later I have the JT paid down to 30k. To me it was worth it.

 

[Mabags]

I'm glad it worked out for you, was it a US bank lease? I was told by more than one dealer and US bank that my buyout number was only for me, and that I couldn't trade or sell to a third party for that number. I had to finance my new vehicle through US bank in order for the dealership to buy for my residual. So I just want to caution the OP, or others that are leased through US Bank to check into buyout versus trade/sell value of their vehicle.

 

[Stitchedupseats]

I recently had a very difficult time getting out of a US bank lease, my buyout price was only for me, dealers could not use that price as a payoff number for trade in, I had to wait until I made my final lease payment to trade and then had to refinance the new vehicle through US bank to receive any equity on trade in. My residual was the same as yours on a 20 Overland, 36,000 trade in value, after taxes didn't leave me as much equity as I was hoping for.

Yeah US bank screwed me so hard on two leases. I will never use them again for anything.

 

[ZoMojave]

I'm glad it worked out for you, was it a US bank lease? I was told by more than one dealer and US bank that my buyout number was only for me, and that I couldn't trade or sell to a third party for that number. I had to finance my new vehicle through US bank in order for the dealership to buy for my residual. So I just want to caution the OP, or others that are leased through US Bank to check into buyout versus trade/sell value of their vehicle.

Mine was an Ally lease.

 

[j.o.y.ride]

My JT is not leased, but I did sell off a leased Highlander for positive equity like 8 years ago. Just like selling a car with a loan, except you need to complete it before the lease term ends so you do have a time constraint.

 

[56cbr600rr]

buy it for Yourself if you love it. If you want to sell it later for profit, it’s yours to do.

 

[Junior88]

Similar situation here...my wife's JL was a lease, we rode it out until the month before lease end. Went to the dealer negotiated a deal on the model she wanted, then I told them I was trading in a leased vehicle. After a few back and forths I got what I wanted for the JL against the new one. The equity in the lease return was a substantial down on the new one so it can be done....but you're right, they aren't chasing you because they like your vehicle / they smell blood....use it to your advantage and don't be in a hurry.
If your going to purchase a new JT you should think about Tri-City or Gupton, at least they can be trusted.

Appreciate it, I think this is going to be the most wise approach, get to the final payment and use the time then to decide if I want to buy it out or if a dealer / the bank wants it badly enough to put me in something new and nice with a juicy credit.

I'm glad it worked out for you, was it a US bank lease? I was told by more than one dealer and US bank that my buyout number was only for me, and that I couldn't trade or sell to a third party for that number. I had to finance my new vehicle through US bank in order for the dealership to buy for my residual. So I just want to caution the OP, or others that are leased through US Bank to check into buyout versus trade/sell value of their vehicle.

Can confirm US Bank made it clear to me when getting my payoff that the number was for me only, too.

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