Me either…
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Could someone share how profit is made? In my mind, this is how I see it:
- If there’s MSDs, they would have to be paid to the seller upfront since they will get it at the end of the lease
- In exchange for an attractive monthly, the assumer gives a “down payment” to the seller and that is the profit.
Am I missing something important or is that the gist?
My guess on the arbitrage situation is as follows
Say that a fair lease on an M4 is $900 p/m on a 90k sticker, sign and drive w first payment DAS.
Let’s assume that you managed to get a huge % of MSRP. Whilst at the same time the residual and rebates are in your fair. Somehow you manage to lease the car for $600 p/m sign and drive, first payment DAS. Now you’re technically $300 p/m below market. Let’s say you drive the car six months and want out. $30030= $11,970. The cost you could technically charge to be up to market.
Let’s say that you decide that you’re willing to transfer your car for an effective $750 p/m payment.
Take that $15030= $4500.
You could ask for a $4500 downpayment, because the effective cost to the buyer would still be $750 p/m which is still $150 below market. Theoretically you could ask for a maximum of $11,970 as that’s the exact figure that’ll bring you to market rate.
That’s my guess though, I could be completely wrong haha
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The guy swapping out his 4 series for $260/month on this site paid zero down when he got the car and wants $1-2k upfront from someone to swap it out. C’est arbitrage.
Fair value. Cuts both ways.
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I did this with my 340 just lower $s all around. 58k car drove it for 2 years at 390 per month (only 1st month down) including Va tax. Swapped it to a guy who paid me $300 and he paid the transfer fee. If the car is worth $500 a month and you are paying $400 there is value there. If I had swapped earlier I probably could have gotten more upfront but I was never able to beat that deal (or come close really). Once the virus hit and I was no longer commuting the car was just dead money monthly so I lowered my ask and it was gone.
Are some lease companies more difficult to transfer with then others? i.e. I’ve tried transferring a Cadillac with GM financial three times through swapalease and none of them have been able to get approved. All of them claimed to have good credit but who knows.
Was it an Escalade?
2018 ATS xxx
Absolutely agree with you, and at the end of the day, “askin aint gettin.” People have the right to ask whatever they want, make money (or at least attempt to) however they want. If someone decides its a good deal that it is the right fit for their needs, that’s their choice!
There’s a point where it no longer really is a deal breaker on major purchases to be honest.
I mean: it may look funny when you go to apply for a mortgage but it’s nothing a decent mtg broker can’t work through.
Does the Finance Dept question why you’re trying to get rid of your brand new lease? I thought they look down upon it as they may think one wouldn’t be able to make the payments
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As long as the risk is being undertaken by a willing and credit worthy party, they couldn’t care less
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People’s circumstances and tastes change. Banks are generally okay with it as long as someone’s willing to pick up the tab.
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I always tell them, “It’s because it’s a POS!”
lol jkjk
They never ask, and I’m pretty sure they aren’t allowed to ask if it’s because of financial reasons
So far, I’ve done 2 swaps and sold 2 others.
As for profit, the only one that happened on was the Ioniq I sold last week to Vroom and received a check for $1315, plus the $500 bonus drive check. I paid $159 at signing and $159/mo for 4 months to “rent” it.
My F150 I swapped out of after 9 mos to get a great Stelvio sign-and-drive deal, and sold that to Carvana 4 mos later for pretty much exactly what I owed, after which I picked up a loaner 330xi. Swapped out of that for $0 after about 9 mos. I probably could have held out for some up-front money on the bimmer, but I’m impatient once my mind is made up.
I agree the ones to be made profit on, are the ones sold to Carvana/Vroom after a few months on a car like Ioniq. It does seem to be more on the EV/Hybrids that profit is to be made. Correct me if I’m wrong. I’m currently in an Ioniq and contemplating selling for a profit too but A) Don’t think I’d be able to find another vehicle with such a low monthly Payment and during these last few months where I barely used it, it pays off. And B) the whole used cars market is at a point of Uncertainty right now. Carvana/Vroom offers have dropped tremendously. And the Hertz possible Bankruptcy doesn’t help either with flooding the market with Used Cars. I’m sure this whole technique of just offloading to these Companies will be affected negatively going forward
I had a higher bid before Carvana shut off the valve, but a profit is a profit.
We did like the low payment and frugality of the Ioniq, but it was the 2nd lease in the house and we are now paying for miles we aren’t using with the cars just sitting here, so even a cheap lease payment is money wasted for us at the moment.
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Ive seen hundreds of low mileage hertz cars for sale, I hear death bells ringing.