Can you trade in a leased car early? This is a question that some individuals find themselves thinking about. Car leases are exceptional, and most of the time, you might want to hold on to your vehicle until the end of your contract.
However, there are some moments when you wish to trade it in early for a different car. It might be because you want a better, fancier car that has just been released. You might also want to do this if you cannot handle your monthly payments and want to choose a less expensive vehicle.
No matter what reason you may have, you might be thinking if you can trade in a leased car for a new one and what options you can take. Most of the time – unless there is a specific contract clause that states otherwise – you can trade-in your current lease for a new one. It might be an expensive choice to take because you will have to pay for penalties, termination fees, increased trade-in values, and the like.
However, if you have strong reasons why you should do so, then this is an option that you can do. There are two ways you can trade in your car. You can do it with your current dealership, or you can do it with a new agent.
Things To Consider Before Trading in Early
While trading in early is an available option, there are still things – and payments – that you need to consider. Because you are pulling out of your deal before it ends, there will be fees that you will need to pay.
Here are some of them:
- Trade-in value: One important thing that you need to consider is that the trade-in value of your vehicle should be positive. Not only can this translate to credits, but negative trade-in values might turn away new deals from dealerships. Since your agent will want to profit off the trade, they consider this essential element.
- Termination fees: Your termination fees are usually found in the contract of your current deal. Since you will be exiting your agreement early, you will be paying these fees. Most of the time, termination fees are higher the earlier you trade-in.
- Penalties: Another fee that you should think about is the penalties. For penalties, there are various subcategories. Are the liabilities for damages done to the vehicle? Are they from late payments? Have you used up your mileage repeatedly and incurred additional fees? While penalty fees are usually explicitly stated in your monthly payments, there might also be hidden charges. Contact your current dealer and ask for the list of additional costs that you will need to pay.
- Payoff value: This is the amount that you can pay if you choose to buy out your lease instead. It would help determine this figure because you will show it to the agent who will provide you with a new contract, especially from a different dealership. The bigger the payoff value, the larger the additional fees once you negotiate a new monthly payment.
Can You Trade In A Leased Car Early To Buy Another Car From A Different Dealership?
You might be wondering. Can you trade in a leased car to purchase a new one under a different dealership? The answer would be yes. While this is not recommended – because you can save more if you stay with your current car agent – there might be factors why you choose this route.
You might find that the new car you are eyeing is not available with your current company. You could have done your research and realized that your new monthly fee could be smaller with a new dealer despite paying off more considerable termination fees.
Here are some steps that you can take when you choose to trade in early with another company.
1. Check in with your current dealership.
Most of the time, car dealerships will allow you to trade in with another company as long as you can pay off your required fees. They might even get more money if you choose to do this. However, there can be limitations, and there might be additional requirements for you to follow.
Check in with your current agent to ensure that you are not breaching your contract and that your new deal will become completely legal. Ask them if your current agreement allows for this – and if they provide better alternatives.
When you want to trade in with a new company, research is one of the most critical activities that you need to do. The first thing that you need to research is your car’s current trade-in value. This can help you negotiate the price and contract with your new dealer.
While you can search for the market value on the internet, there are several factors that you should consider. Know the current demand for your car and look if its price has gone up or down. Check if your vehicle does not reach enough mileage according to your contract – this can work in your favor. Also, do a check-up of your car and see if there are any damages. Even slight damages can become additional costs.
After you research your car, you can also do the same research for your dealership options. You can look for one that will give you fewer fees and more favorable contracts. Contact different agents and pick one that works best with your current setup. Don’t settle for the first company you see – it is better to consider a variety of options.
3. Contact your new dealership
Once you have chosen your new dealership, contact them. Most of the time, the option they will give you is that they will buy out your lease and pay it off with your new contract with them. Some dealers will also offer to pay for additional fees – such as exit fees and penalties – but it will cost you a higher monthly payment.
Make sure to negotiate on your contract. If you think that they are asking higher than they should, provide some counteroffers. If your new deal is something that you cannot handle, you can also ask if they can modify it for you.
Learn More: How To Trade In A Car With Negative Equity?
Can You Trade In A Leased Car Early To Buy Another Car From The Same Dealership?
Most of the time, your current dealership will allow you to trade in early to buy a new car – at the cost of additional fees. Unless it is explicitly stated in your previous contract, all dealerships allow early trade-ins. Can you trade in a leased car for a new one with your agent? If you are wondering about this question, the answer would be yes.
When you make your trade with the same dealership, there can be some perks. The transaction will be faster and easier because you already have an ongoing deal. If your current lease has positive equity, it might also be the less expensive route for you to take.
1. Do your research
While your dealer will be more than willing to provide you with the prices immediately, it is essential to do your research first. Look at your previous payments and consider the remaining payouts that you still have. It would be best if you also tried to look for the current trade-in value of your car.
When your leased vehicle receives a better market value, it can allow you can get equity or trade-in credits. You can also go to a car shop to evaluate your vehicle for any damage since this can be added to your penalty fees. Check your mileage use and see if it can work in your favor, too.
2. Approach your dealership
Contact your agent and see if they are willing to accept trade-ins for the new vehicle you like. Most of the time, they would be ready if they had the new car model in the company. Once you have contacted your agent, you can also discuss what options you should take if you want to trade your current lease early.
With your agent, ask how the process will take. Talk about your new lease and its payment methods. Inquire about additional payments and if you should pay off your termination fees and penalties by adding them to your new contract. You can also inquire if you can get trade-in credits because this will shave off a considerable amount for your new deal.
3. Negotiate the fees
Once you are decided, make sure to negotiate first before you agree to any new deal. This way, you have the chance to save money. This will also ensure that you are not paying much more than you should. Since there are various reasons you might want a new lease, it is better if your new monthly payments are ones you can handle.
Using your previous research, consider counteroffers if you are not satisfied with the current contract terms. You can also ask if they can spread out additional fees in your monthly payment or if you can pay them off early so that you will not incur a more expensive contract.
Learn More: How Soon Can You Trade In A Financed Car?
Frequently Asked Questions (FAQ)
If you decide that the car you have is just not to your liking at all, you can definitely turn in your leased car at the company a brand new one. Besides, depending on your dealership, you might even get some incentives to ease your total balances for the new car you will purchase.
Of course, you have to set an appointment beforehand to your dealership before trading it in. Ensure to turn in your vehicle in good condition, along with the needed items such as its keys, receipts for repairs, owner’s manual, records about maintenance, and its vehicle inspection report.
If you’re not getting a brand new car right away and have equity, you can consider selling your car to the dealership. Don’t worry because the dealership will help you calculate the total price from selling it according to the vehicle’s buyout price and trade-in value.
So, can you trade in a leased car early to buy another one? Yes, you definitely can. However, you have to consider the fees you will have to deal with above if you ever decide to do this. Still, these negative fees shouldn’t stop you at all from pursuing your plans. As long as you have the budget, do enough research before making your decision, and find the method that works best for you, then you’ll be good to go.