We have covered the topic of vehicle leasing many times here at AutoTrader, however, one question we are yet to answer is whether you can trade in a leased vehicle for something else. Before we do that, let's refresh our memory by answering some lease-related questions.
What is vehicle leasing?
"Vehicle leasing is where a consumer pays a monthly premium to use a vehicle for a pre-determined amount of time with set mileage restrictions and other contractual limitations." To read more about this, check out our article about trading one lease for another.
The pros and cons of leasing
"While leasing is not as popular locally as it is in other countries, it most certainly has its place for those who want to drive a new car every couple of years and don’t put a lot of mileage on their vehicles." Read more about the pros and cons of vehicle leasing.
What happens at the end of a lease?
"With the cost of personal mobility increasing with each passing year, consumers must consider many other forms of vehicle ownership, including leasing, which allows for predictable mobility costs that often includes servicing and insurance." Read about the three main options you have when a vehicle lease has ended.
Trading in a leased vehicle
If you currently have a car lease active and want to trade the vehicle in, the company from which you have the lease will treat it the way it would in the event of you terminating the contract early. This means that various penalties and contract issues will need to be dealt with. There are a couple of ways that trading a leased car to a dealership can work, though.
The first is a scenario where you, the individual with the lease who wants to trade, have the dealership pay off the rest of the lease payments until the contract is up, but then you forfeit any returns from trading the lease in. Another way of doing it is to have the dealership pay to terminate the contract early, however, the resulting penalties and outstanding lease amount will likely exceed the trade value of the vehicle, meaning that the outstanding balance must be then loaded to the new vehicle, raising the repayments on your new car.
