How to Sell Your Leased Car for Profit

Let me explain how this works. When you lease a car, most of your monthly payment goes toward depreciation. Say you lease a $40,000 car and at the end of the lease it's worth $25,000. You've basically been paying off that $15,000 depreciation. When the lease ends, you can buy the car for its "residual value"—that $25,000.

But here's where it gets interesting. You don't have to wait until the lease ends. You can call your leasing company anytime and ask for a "buyout price." It'll vary depending on how many months you have left, but you always have that option.

Now, when the leasing company set your residual value, they were basically guessing what the car would be worth in 3 years based on historical data. Sometimes they guess right. Sometimes they don't.

And when they guess wrong in your favor? That's where the profit opportunity comes in.

How Lease Equity Actually Works

Here's the truth: leasing companies usually overestimate residual values. That means when your lease ends, the buyout price is typically higher than what the car's actually worth. In that case? Easy decision. Just turn in the keys and walk away.

But certain vehicles—especially trucks, SUVs, and anything with strong demand—can be worth more than their residual value. That difference is called "lease equity," and it's basically free money if you know how to capture it.

Vehicles like the Toyota Tacoma, Honda CR-V, Toyota RAV4, and Jeep Wrangler are the usual suspects. They hold their value like crazy and are prime candidates for positive equity.

If you have lease equity, you've got two main options:

1. Buy the car yourself, then sell it
2. Trade it in to a dealer and use the equity toward your next vehicle

What's the Market Like Right Now? (2025-2026)

Here's where we stand:

• Prices have stabilized: Used car prices are holding steady, with the average around $29,500. No more wild swings.
• More off-lease cars are hitting the market: During 2020-2022, nobody was leasing (supply shortage). Now those years are catching up, and more used inventory is coming back.
• Trade-in equity is modest: Average trade-in equity is around $7,900. That's still positive, but nowhere near the $10,000+ people were seeing during the pandemic.
• EV values are dropping: Used EV prices are expected to fall further in 2026 after federal subsidies ended. If you leased an EV, don't expect a profit.

The bottom line: lease equity opportunities exist, but they're not falling from trees like they used to. Focus on high-demand vehicles if you're hoping to cash in.

How to Sell Your Leased Vehicle

You've got two ways to do this: sell to a private party, or sell to a dealer (CarMax, Carvana, local used car dealers).

Private sale gets you more money, but it's more complicated. Here's why: in most states, if you buy and sell the same car within 10 days, you get a sales tax exemption. (The buyer still pays sales tax, but at least you both don't get hit.) Sounds straightforward, but it can get tricky.

The smart move: line up your buyer before you purchase the car from the leasing company. Don't buy it and then figure out how to sell it. Also, call your state's Department of Tax/Revenue to understand exactly how the exemption works where you live.

One more thing to watch out for: dealers in some states (California, I'm looking at you) have been gouging people on inspection fees. An inspection might be required before you can buy out your lease, and while it used to cost around $300, some dealers are now charging $1,500 or more. Factor that into your profit calculations.

Another option: have the buyer or dealer purchase the car directly from the leasing company and pay you a commission (the difference between the buyout and the sale price).

This sounds great in theory, but there's a catch. Most major leasing companies have stopped allowing third parties to buy leases directly. So this route is increasingly limited. Which brings us to...

Third-Party Lease Buyout Policies (2025-2026)

During the supply shortage, manufacturers got smart (from their perspective) and blocked third-party buyouts to keep used inventory within their dealer networks. Many of those restrictions are still in place. Here's the current breakdown:

Brands That DO NOT Allow Third-Party Buyouts:

• Acura Financial Services
• Audi Financial Services
• BMW Financial Services
• Ford Credit (including Lincoln)
• GM Financial (Chevrolet, GMC, Buick, Cadillac)
• Honda Financial Services

Brands That Still Allow Third-Party Buyouts:

• Chrysler Capital (Chrysler, Dodge, Jeep, Ram)
• Genesis Finance
• Hyundai Motor Finance
• Kia Motors Finance
• Mazda Financial Services
• Mercedes-Benz Financial Services
• Mitsubishi Motors Credit of America
• Toyota Financial Services (including Lexus)
• Volkswagen Credit

Important: Policies change, and some lenders that technically "allow" third-party buyouts will charge dealers a higher payoff than what you'd pay personally. Always call your leasing company to verify current policies and get quotes for both scenarios.

If Your Brand Blocks Third-Party Buyouts

Don't panic. You can still capture your equity—it just takes an extra step:

1. Buy out the lease yourself at the personal buyout price
2. Immediately sell or trade the vehicle to a dealer

The catch: you'll need financing, you'll pay sales tax (in most states), and the car will briefly be titled in your name. Make sure to factor all those costs into your profit calculation before deciding if it's worth the hassle.

How to Trade In Your Lease to a Dealer

If you have equity but don't want the headache of selling privately, you can use that equity as leverage at a dealership.

Here's how it works: you trade in your lease, and the dealer gives you the equity as a credit toward your next lease or purchase. This usually needs to be a same-brand dealer (the one you're turning in the lease to), unless your lender allows third-party buyouts.

Will you get as much money this way? Probably not. But you save yourself a lot of hassle, and you don't have to worry about taxes, registration, and fees eating into your profit.

Sometimes convenience is worth a few hundred bucks.

How to Check If You Have Lease Equity

Before you do anything, figure out if you actually have equity. Here's the process:

1. Get your buyout quote: Call your leasing company or log into their online portal. Get the current payoff amount in writing.
2. Check market value: Get quotes from Kelley Blue Book, Edmunds, CarMax, Carvana, and a couple local dealers. Don't rely on just one source.
3. Do the math: Market value minus buyout price = your equity. If it's positive, you've got something to work with. If it's negative, turn in the keys and move on.
4. Factor in costs: Sales tax (if you're buying out), registration, dealer fees, inspection fees—subtract all of these from your potential profit. What's left is your real equity.

Q: I made a deal with a neighbor to buy out the vehicle after his 36 month lease. The leasing company demanded an extra 5% on top of the buyout price because I was not related to him, saying it was their standard policy. Is this normal?

Unfortunately, yes. The lease agreement is between your neighbor and the leasing company—they don't have to honor the personal buyout price for a third party. A lot of lenders charge higher "dealer" or third-party buyout prices.

The workaround: your neighbor should have bought the car himself first, then sold it to you immediately. Watch out for sales tax implications in your state, though.

Last reviewed: January 2026