Vehicle shortages mean your end-of-lease car could be worth more than you think
Those who lease vehicles and have terms coming to an end may be considering handing in the keys at the dealership and walking away, but now, car shortages and a demand for microchips has seen end-of-lease vehicles worth a lot more than one may think.
When the auto industry was drawing up leasing contracts three or four years ago, no one could’ve expected that a pandemic would create a vehicle shortage.
Now, as dealers scramble to find used cars, leased vehicles are worth a lot more.
Four years ago, Christine Denty of Brooklin, Ont. decided to lease a 2018 BMW 440i xDrive Gran Coupe. Denty’s lease recently came to an end and she was surprised to hear that, if she turned the vehicle back into her dealer, she would have to pay almost $2,000 in wear and tear charges.
"I would be paying BMW to take my car, but not only do they get my car, they would be turning around and selling it. So they would get two grand from me and sell the car for even more," Denty told CTV News Toronto on Wednesday.
Instead, Denty decided to use an auto broker to sell the car and she was able to pocket about $3,000.
"I will be able to turn a profit on my vehicle," she said.
Viraf Baliwalla is President of the Automall Network, an auto broker with a dealer's licence that helps customers buy and sell cars for a fee.
"Clients hire us to help with buying vehicles as well as selling vehicles," Baliwalla said.
Baliwalla said drivers that have leases coming to an end at this time should know that their vehicle may be worth more than they thought.
“COVID-19 has created this weird situation where there is a pent up demand, so vehicles today are actually worth far more than they were two years ago," he said.
Baliwalla said one of his clients had a 2017 Honda CRV AWD LX with 37,900 kilometres. When the lease ended, there was a buy-back end-of-lease price of $13,805, but another dealer anxious to find vehicles to sell agreed to pay $18,805 for it.
The client walked away with a profit of $5,000.
“Prices have gone up, so now you have the right to buy out that vehicle if you wish or someone else is willing to buy it out for a lot more because the market has gone up tremendously," Balliwalla said.
Leasing contracts vary, but Denty said what’s important is that anyone with a lease ending soon should know they have options.
"They can get the profit from their car instead of the dealership they are returning it to, which will have every intention to sell it for more, because the car is worth more than it was before" she said.
The current situation with leased vehicles may not be like this for long — possibly the next six months, or when dealer inventories return to normal.
Still, if you have a lease ending soon, it may be worth it to do the math and explore your options.
CTVNews.ca Top Stories
From outer space? Sask. farmers baffled after discovering strange wreckage in field
A family of fifth generation farmers from Ituna, Sask. are trying to find answers after discovering several strange objects lying on their land.
Pearson gold heist suspect arrested after flying into Toronto from India
Another suspect is in custody in connection with the gold heist at Toronto Pearson International Airport last year, police say.
Justin and Hailey Bieber are expecting their first child together
Hailey and Justin Bieber are going to be parents. The couple announced the news on Thursday on Instagram, both sharing a video that showcases Hailey Bieber's growing belly.
Broadcaster and commentator Rex Murphy dead at 77: National Post
The National Post is reporting that Rex Murphy, the pundit and columnist who hosted a national call-in radio show for decades, has died.
Ontario family receives massive hospital bill as part of LTC law, refuses to pay
A southwestern Ontario woman has received an $8,400 bill from a hospital in Windsor, Ont., after she refused to put her mother in a nursing home she hated -- and she says she has no intention of paying it.
Debate on abortion rights erupts on Parliament Hill, Poilievre vows he won't legislate
A Conservative government led by Pierre Poilievre would not legislate on, nor use the notwithstanding clause, on abortion, his office says, as anti-abortion protesters gather on Parliament Hill.
New analysis of Beethoven's hair reveals possible cause of mysterious ailments, scientists say
High levels of lead detected in authenticated locks of Ludwig van Beethoven's hair suggest that the composer had lead poisoning, which may have contributed to ailments he endured over the course of his life, including deafness, according to new research.
B.C. man used Bobcat as 'weapon' while chasing away homeless people, judge says
A B.C. man has been convicted of assault with a weapon after using a skid-steer Bobcat to chase two homeless people from his lawn, injuring one of them in the process.
Flat tire on a highway? Here's why you shouldn't try to fix it
If you're cruising down a highway and realize you have a flat tire, you may want to think twice before stopping to fix it on the side of the road.