For instance, getting a lease under $100 / mo and then trading it on a lease trader site?
In theory, yes. You would have to find a buyer willing to pay you a “fee” to take over your low monthly lease payment.
Also, some people have leased a car, then sold it to a private buyer or to Carmax for more than the lease payoff. You would have to have a big discount and a ton of incentives applied to the lease to overcome the depreciation hit a new car takes when you drive it off the lot. The good thing about this option is you pay no lease disposition fee or takeover fee and the lease is over and done with.
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Forgive my ignorance, but isn’t the residual based on the MSRP? If it is, doesn’t the sale price and incentives become moot when trying to sell for profit at lease end? Because isn’t buying out the car at lease end essentially the equivalent of purchasing for MSRP?
The lease payment is calculated based on the difference between residual of MSRP and how much the dealer “sells” the car for to the lease company. The residual value is just a “guess” of how much the car will be worth at the end of the lease. The customer pays the difference between the sale price and this value as the cost of the lease over 2-4 years. That is how if a car has a large discount and lots of lease incentives, you can get a very low lease payment.
The lease buyout is based on what the car was “sold” for by the dealer. If the car has MSRP of $30,000, but discounted $2,000 and $3,000 of incentives were applied, the buyout is only $25,000 right off the bat and decreases with each lease payment in the same way the loan balance of a purchase decreases.
Also, you don’t have to wait until the end of the lease to buy it out. I can take my Cruze Limited to Carmax right now and sell it or I could sell it to a person. Whether or not I can sell it for payoff or not is up to the market.
Make sense?
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Makes perfect sense, very interesting!
I think it would also be easier to make money on it if you drive less than your allotted miles. I’m planning on leasing a car for 36/10k, but I really only drive 6k miles per year. I’d expect the car to be worth more than the payoff by the time the end of the lease approaches, so I could sell it, pay the buyoff amount, and pocket the difference.
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Thanks for the explanation. My lease has some language regarding early termination of the lease and applicable fees depending on when that occurs. Does this generally apply to buying out the car? Or is this more for just turning it in early?
I can only speak for my GMfinancial leases. If I buyout the lease early, there is no fee. If I turn in the car, it costs $395 unless I buy or lease another GM vehicle within 10 days.
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This stuff is incredibly interesting, it reminds me of the airline miles stuff I am way into.
Yes, some folks did that with the Cruze Limited lease. But they all qualified for a ton of incentives, including the $2,500 Volt Loyalty incentive that was available at the time. All in all, it’s pretty rare to make money on a lease.
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I managed to make money off a Cruze Limited lease I picked up last December. Sorta was the perfect storm though. GM was running super-aggressive lease specials on Cruze Limiteds at the time. For manufacturer incentives, I got the $2,500 Volt loyalty rebate, another $3,700 or so in lease incentives, and $600 in GM card earnings, so almost $7k in total incentives.
Plus, Costco was offering a $700 gift card for a Chevy purchase/lease. The dealership I negotiated with through in $300 of additional gift cards.
Then I got Beepi to buy my Cruze for $18.7k (they waaaay over paid)! That was over $3k more than what I owed on the Cruze lease payments + residual buyout price. I made about $3.7k in profit (after taking into consideration all payments made to date), then add another $1k in gift cards I received. All said and told, that Cruze lease netted my $4,700. 
So to wrap it up, huge manufacturer incentives, conditional gift cards, and a used car dealer paying way more than they should have = $$$$ for me.
But as a rule, you will rarely make money like I did. Or at all.
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Yup! Usually some cars have higher residual values at certain times of the year, or if there is a demand or just depending on the market. I have seen people on Lexus Forum sell their car back to CarMax 3 months before their lease is over and actually getting paid 1-2,000 dollars, as opposed to returning it back to lexus and paying a disposition fee.