Can a Car Dealer Give Me Cash for My Leased Vehicle?

A dealer can only give you cash for your leased vehicle if your car's value exceeds your lease buyout amount. A dealer must pay your leasing bank for the car's value before purchasing. You might be able to find a dealer who wants to purchase your car, but you might make more money by selling the vehicle privately.

Lease Buyout

You can purchase your leased vehicle at any time. If you trade the car to a dealer, it must satisfy your leasing bank to obtain a clear vehicle title, a state requirement for resale. The dealer can then return the leftover vehicle's value after the lease buyout if you decide not to apply it toward another loan. If you want to sell the car privately, you must provide the leasing bank with the buyout amount before you can obtain the title, which is necessary to transfer ownership. You can then keep any profit you make from the sale after satisfying your leasing bank.

Wholesale Versus Private Sale Value

You're likely to make more money from selling your vehicle privately than from trading or selling it to a dealer. Dealers offer wholesale value for trade vehicles, which is the least amount of money you can expect for a car. Private sale values are often thousands more than wholesale value. To gauge the difference in values, go to Edmunds.com, the Kelley Blue Book and NADA Guides websites. All three guides offer differ values, so use a median value to determine your vehicle's worth. Have a dealer appraise your leased vehicle to help you decide if you should sell it privately instead.

Warning

If you decide to end your lease early, you may still owe additional money to your bank. If you've exceeded your wear-and-tear balance or mileage allowance, the bank will charge you for the car's loss of value after you turn in your lease. Unless you trade in the car or sell it, you must still abide by your lease contract. Have an inspection completed before you decide to terminate your lease. Most leasing banks offer a lease inspection before returning the vehicle to avoid extra fees.

Finding a Dealer to Take the Lease

Some dealers may not want to purchase your leased vehicle unless you trade it toward another purchase. Call around to dealers to find out if one will purchase the car from your bank and give you cash for car's value after it pays the leasing bank. If you plan to trade the leased car toward another purchase, and the car's value is more than the buyout amount, consider putting the excess amount toward your new loan to increase your vehicle equity. You might also find that a dealer can pay your last lease payments so you don't have to trade the car.

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Can I Sell My Car Without the Original Title?

The car title is a very important document, because it proves that you own the car. When selling your car, you need to have the title as proof of ownership. Don't trust a car dealer or individual who tries to convince you otherwise, or you could end up in trouble. However, if the original title is lost, you can secure a replacement title.

Legality

A title proves that you, not someone else, owns the car. So, selling a car without a title is not legal and violates state laws. If you own the car with other people, everyone needs to sign off on the title to sell the car, so just having the title might not be enough. Additionally, the title must be in your name. You can't sell a car someone else owns, even if it's a relative or spouse.

Replacement

If you have lost your car's original title, don't worry. You can pick up a replacement car title, then sell the car. Check with your state's Department of Motor Vehicles or similar agency about obtaining a replacement or duplicate car title. For example, Michigan vehicle owners can obtain a new title from the Secretary of State, while California vehicle owners do so at the DMV. You may have to complete paperwork and pay a fee for the replacement title.

Loans

If you financed or leased your car, you may not have the car title because the lending agency holds it. In this case, you need to have the financer release the lien on your car, by signing on the title. You can only do this once you've paid off the balance, so pay up or contact your financer directly to see if you can arrange to sell the car, then reimburse them. For leased cars, you technically cannot sell the car because you do not own it.

Tips

Once you sell the car, transferring the title to the owner releases you from ownership of the vehicle, and thereby from liability. If you do not transfer the title to the new owner, you could be fiscally responsible for parking tickets or citations he incurs, because you technically own it. So not only is selling the car without a title illegal, it could cause you all kinds of financial trouble.

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How to Determine Equity in a Leased Vehicle

If you can purchase your leased vehicle from your bank for less than its resale or trade-in value, the vehicle has equity. Depending on how far along you are in your lease contract, your vehicle might not have any equity at all. Leasing banks charge monthly payments based on expected depreciation, which often evens out at the end of the lease term. The residual value, or the cost of the car that stays out of your payments, is the expected value at the end of the term. The vehicle might have no equity in it until then.

Instructions

1

Call your leasing bank to obtain a buyout amount. The buyout amount is your cost to purchase the vehicle, whether you intend to purchase it yourself, sell it or trade it.

2

Research your car's value using Internet appraisal guides, such as Edmunds.com, the Kelley Blue Book website, NADA Guides website or the Galves book, which you can obtain at a local bookstore. Determine a median value from at least three sources, as all offer different values.

3

Subtract your vehicle's value from its buyout amount. The remaining amount is your current equity.

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How to Finance a Vehicle With a Lien on the Title

A lien on a vehicle is most often due to a previous car loan that is not yet paid in full. If you buy a car that already has a lien and you want to finance it yourself, you'll have to work with the seller to release the existing lien first. Until this happens, you're going to have a problem completing the transaction.

Instructions

1

Negotiate with the seller on the final selling price of the car. If the seller is unable to pay off the lien himself, which would be the normal course of action, you may have to negotiate to pay off the other lien and deduct that amount from your final sale price. Hold off on shaking hands and finalizing the agreement until you consult with your lender regarding the situation and the existing lien. If the lender agrees to assist you with closing this sometimes complex transaction, the lender would probably have to cut two checks --- one to the existing lien holder and another to the seller for the remainder of the sale amount.

2

Draw up a bill of sale that outlines the entire agreement including conditions and contingencies, once you have confirmation that the lender can help you with this transaction. Have a lawyer review the agreement and notarize it with your signature and the seller's.

3

Pay the other lien holder (the contact information is located on the title). Wait to receive a lien release from the existing lien holder as well as the title. See if you can arrange to have it sent to your address or directly to the new lender. The new bank will most likely handle this step.

4

Proceed with the sale at the lender's office, with the seller present. The lender issues final payment to the seller for the remainder of the sale amount per your bill of sale. The seller must sign the back of the title to you as the new owner, then the lender takes the title into possession as the new lien holder. The exact transfer process may vary by lender.

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Advice About Not Getting Ripped Off On a Car Lease

Leasing a car can be attractive because it allows you to get a lower payment than if you were buying a car. While it can be effective, you could also get ripped off easily if you are not careful. Lease terms can be confusing, and you need to keep some tips in mind when you talk to the dealer.

Negotiate Price First

When you go into a dealer and find a car that you like, you may be tempted to try to start negotiating on how much you can get the payment down to. While this could help you save a few dollars per month, it is not the best approach to use. Instead of focusing on lease payment, focus on the base price of the car first. Negotiate the total price and then worry about the lease payment.

Down Payment

One of the nice things about leasing a car is that the down payment is negotiable. Even though the advertisements for leases recommend a certain amount of money down, you do not have to put that much down if you do not want to. Part of the down payment might be based on your credit history. If you want a lower down payment, do not be afraid to negotiate with the dealer for it.

Mileage Limits

When negotiating the terms of your lease, make sure that you pay attention to the mileage limits of the contract. With a lease, you are paying for the usage of the car over a certain amount of time. The dealer puts a limit on the amount of miles that you can drive. If you go over the limit, the overcharges will be very large. Make sure that you get enough miles on your lease to accommodate your driving needs.

Question Fees

When you negotiate the terms for a lease, you will notice that the dealer tries to charge you for many different fees. Some of these fees might be legitimate, but many of them are simply a way for the dealer to gouge you for more money. With many leases, the dealer will charge you an acquisition fee for finding the exact car that you want. The dealer may also try to include a large fee for the disposition of the car on the back end of the transaction.

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Ways to Reduce Car Payments

A car payment can eat up a good portion of your monthly earnings, so it's best to plan out how much you want to pay before you purchase the car. Decide on the maximum monthly payment you're willing to make, and the dealer will be able to help you figure out how to achieve it. If you're already paying for a car, there are some things you can do, though your choices are more limited.

Consider Buying Used

You may want a nice new car, but if you can't make the payments on it (or if making the payments would be difficult), then check out some used vehicles. Used doesn't always translate to abused, and there are some great cars out there that have had other owners and are still in great condition. Used cars are much less expensive than new cars, and that makes a big difference in the monthly payments.

Make a Large Down Payment

Save up some money before you head to the car dealership. The bigger your down payment, the less you have to finance. This means your payments will be lower, you'll pay less money in interest and you may even be able to pay off the car sooner. If you buy a car with little to nothing down, you're basically borrowing the entire amount for the car, and you'll have to make much bigger payments to get it paid off on time.

Choose a Long-Term Payment Plan

If your only concern is lowering the monthly payments, you can choose a long-term payment plan. This means you'll have longer to pay off the car, and you won't have to make big payments to do so. The downside to choosing a longer payment plan is you'll end up paying a lot more money in interest. Over time, this option is a lot more expensive.

Refinance

If you're trying to reduce payments on a car you already have, you'll probably need to refinance. First, make sure there aren't any penalties for an early payoff in your current payment contract. Choose a financial institution you want to refinance with. This can be the same institution that you're paying now, or you can go through another bank or credit union. Basically, you'll pay a fee (usually a few hundred or thousand dollars, depending on what you owe), and the new institution will pay off your car loan. Then you'll begin making new payments to your new lender. This will change the terms of your loan, and you will be able to work out smaller payments.

Sell the Car

If you need to reduce your payments a lot because you can't make them or they're interfering with your ability to pay for other things, you may need to sell the car. If you just bought it, this is bad because your car will probably be worth less now than when you bought it. You might have to keep making payments for a while because you won't be able to sell it for the full cost of the loan. However, selling the car would enable you to eventually get rid of car payments altogether, allowing you to start from scratch next time you buy a car.

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Problems with Hybrid Cars

If you are considering the purchase of a hybrid car, there are a few factors you will need to examine prior to purchase. While hybrid cars do offer many advantages, their disadvantages are often overlooked. Many of the disadvantages of a hybrid won't affect your wallet, but a few of these considerations can be quite costly.

Lack of Power

To increase fuel efficiency, hybrids have much less powerful engines, resulting in cars with a considerable drop in power. Both acceleration and pulling power are affected by this.

Cost of Repairs

Engines in hybrid cars are a newer technology that many mechanics are not yet familiar with. This and their more complicated design leads to much higher repair costs.

Battery Life

The average hybrid car battery lasts around 80,000 miles before needing replaced. While that seems like quite a long shelf life, keep in mind that these batteries cost $5,000 to $8,000.

Size

Because the engines produce less power than a typical car, hybrids are much smaller to help improve acceleration and gas efficiency. For this reason, many hybrids have drastically less storage space than their non-hybrid counterparts.

Weight

For more efficient operation and better performance, hybrids are typically much lighter than a normal car. These lighter materials tend to make the car more susceptible to damage.

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