Early lease trade in questions

[chadmtatham]

Can anyone walk me through the best way to navigate an early lease trade in for newbie lease dummies? I’ve been in a ‘23 VW Tiguan lease for 6 months and I don’t plan on attempting this anytime soon, I’m just curious about how it works. I don’t love the car—it’s just fine—and I’m just curious about the possibility of trading it in for a different lease sometime down the line if it makes sense. I’ve done quite a bit of reading on this forum and it seems like there are a bunch of ways to run it.

[jeisensc]

@chadmtatham

I’m just curious about the possibility of trading it in for a different lease sometime down the line

Another VW or a different brand? You happened to lease a brand with some handcuffs.

List of Lenders that Allow for Third-Party Buyouts

As used car prices soar, many lessees are finding that their vehicles are worth considerably more than their current payoff amount. Instead of simply returning the vehicle at lease end, you may be able to sell the vehicle to a third party (such as Carvana, Shift, Vroom, and CarMax) for a profit. However, some lenders are making it difficult for consumers to access this “lease equity” by charging a higher lease buyout price to third-party buyers than to consumers, or altogether prohibiting third…

[chadmtatham]

@jeisensc

Another VW or a different brand? You happened to lease a brand with some handcuffs.

I’m open. I don’t have my eye on anything out right now but am really interested in going electric and excited to see what EV releases happen over the next year or so. I’d be open to staying with VW.

[max_g]

The market has to be in your favor, for starters.

For most people at least, an early exit is moot when there’s thousands of dollars in negative equity that has to be paid off in cash, or worse, has to capitalized into the next lease with interest and tax on top.

[chadmtatham]

@max_g

For most people at least, an early exit is moot when there’s thousands of dollars in negative equity that has to be paid off in cash, or worse, has to capitalized into the next lease with interest and tax on top.

is buying out the lease early and trading it in/selling it to carmax etc ever an option that works out financially? assuming the resale value of the car is more than or equal to the buyout amount. I don’t quite understand how the tax works when you buy it out.

[max_g]

In most states, you pay sales/use tax on the buyout amount.

That was very feasible during the height of inventory shortages, due to the eagerness of both franchise dealers and Carmax types to replenish inventory.

Things have changed since then.