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
The story of how a B.C. man found his birth mother
After his adopted parents died, Dave Rogers set out to learn more about his birth mother. DNA results and a little help from friendly strangers would put him on a path to a small town in England.
Montreal man on the hook for thousands of dollars after a feature on his Tesla caused an accident
A Montreal man is warning Tesla drivers about using the Smart Summon feature after his vehicle hit another in a parking lot.
Italy's white-collar mafia is making a business killing
Italy's mafia rarely dirties its hands with blood these days. Extortion rackets have gone out of fashion and murders are largely frowned upon by the godfathers.
Spike in 'violent rhetoric' since Oct. 7 attack from 'extremist actors,' CSIS warns
The Israel-Hamas war has led to a spike in 'violent rhetoric' from 'extremist actors' that could prompt some in Canada to turn to violence, the Canadian Security Intelligence Service warns.
Russia announces nuclear weapon drills after angry exchange with senior Western officials
Russia plans to hold drills simulating the use of battlefield nuclear weapons, the Defense Ministry announced Monday, days after the Kremlin reacted angrily to comments by senior Western officials about the war in Ukraine and Moscow warned that tensions with the West are deepening.
Summer forecast: What to expect as El Nino weakens
As Canadians brace themselves for summer temperatures, forecasters say a weakening El Nino cycle doesn’t mean relief from the heat.
Actor Bernard Hill, of 'Titanic' and 'Lord of the Rings,' has died at 79
Actor Bernard Hill, who delivered a rousing cry before leading his people into battle in 'The Lord of the Rings: The Return of the King' and went down with the ship as the captain in 'Titanic,' has died.
Dash cam catches moment suspected drunk driver hits parked car, sends it careening into North Shore flower shop
Police say it’s fortunate no one was injured or killed in a collision at North Vancouver’s Park and Tilford shopping centre Saturday evening that sent one vehicle careening into a flower shop and another into a set of concrete barriers outside a Winners store.
Israeli army tells Palestinians to evacuate parts of Gaza's Rafah ahead of an expected assault
The Israeli army ordered some 100,000 Palestinians on Monday to begin evacuating from the southern city of Rafah, signaling that a long-promised ground invasion there could be imminent and further complicating efforts to broker a cease-fire in Gaza.