How insane are used-car prices right now?
Enough that I was able to walk away from my 36-month lease with a check big enough to cover an entire year's worth of payments. And that the original offer Carvana made to buy the car from me got bumped up by $1,100 in the week it took me to finish the deal.
Yet selling a leased car to a dealership instead of just returning it the usual way is an option few consumers are aware of. In my experience, even some salespeople aren't fully versed on it.
I've always checked the trade-in value at the end of my leases, but most people likely don't because residuals are usually calculated so well that the math rarely works.
But there's never been a time that the numbers have added up like they do now — especially for those who, like me, suddenly stopped commuting 13 months ago.
That means dealers might have a powerful weapon to help ease the sting of rising new-car prices and earn a customer's loyalty into the future. "I'm giving you a check to walk away from your lease" is the kind of surprise that gets a shopper's attention.
And unlocking this hidden equity — essentially found money, to the lessee — doesn't even take anything out of the dealer's bottom line.
Before the pandemic, I spent my daily 80-mile round-trip drive realizing I had miscalculated on my lease and dreading how much the overmileage fees would cost. Instead, I ended up almost 11,000 miles under the 45,000 limit. I hadn't even burned all the way through the factory warranty.
With the global microchip shortage eating into inventories of potential replacement vehicles more every day, I didn't want to wait too close to the end of my lease to start shopping.
One dealership told me it would cover my final two payments and roll the lease-end purchase fee into my new contract. It then tried to convince me this was a great deal!! by using multiple!! exclamation points!! I didn't stick around long enough to find out whether the store was planning to buy my car out and try to flip it for a big profit or just have me give it back for the lender to benefit.
Meanwhile, Carvana offered to buy my car for several thousand dollars more than the payoff, no exclamation points needed. But the offer expired before all of the paperwork I had to gather and submit had been approved.