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
BREAKING Toronto Raptors player Jontay Porter banned from NBA
Toronto Raptors player Jontay Porter has been handed a lifetime ban from The National Basketball Association (NBA) following an investigation which found he disclosed confidential information to sports bettors, the league says.
'$6.66 per day': Advocacy groups disheartened by funding in budget for disability benefit
Advocacy groups across Canada are expressing widespread disappointment about the amount of funding earmarked in the 2024 federal budget for the long-awaited Canada Disability Benefit.
BREAKING Former Air Canada employees among suspects identified in gold heist at Pearson airport: police
Police say one former and one current employee of Air Canada are among the nine suspects that are facing charges in connection with the gold heist at Pearson International Airport last year.
Earthquake jolts southern Japan
An earthquake with a preliminary magnitude of 6.4 hit southern Japan late on Wednesday, said the Japan Meteorological Agency, without issuing a tsunami warning.
MPs summon ArriveCan contractor to the House to be admonished in rare parliamentary display
Enacting an extraordinarily rarely used parliamentary power, MPs have summoned an ArriveCan contractor to appear before the House of Commons on Wednesday afternoon to be admonished publicly for failing to answer their questions.
opinion Don Martin: Gusher of Liberal spending won't put out the fire in this dumpster
A Hail Mary rehash of the greatest hits from the Trudeau government’s three-week travelling pony-show, the 2024 federal budget takes aim at reversing the party’s popularity plunge in the under-40 set, writes political columnist Don Martin. But will it work before the next election?
Gas prices across Ontario expected to climb to levels not seen since 2022, analyst says
Ontario is going to see a big jump at the pumps later this week as gas prices in the province hit levels not seen in nearly two years, according to one industry analyst.
Ancient skeletons unearthed in France reveal Mafia-style killings
More than 5,500 years ago, two women were tied up and probably buried alive in a ritual sacrifice, using a form of torture associated today with the Italian Mafia, according to an analysis of skeletons discovered at an archeological site in southwest France.
Paul McCartney and John Lennon’s sons have released a single together
A new Lennon and McCartney collaboration is the last thing anybody expected.