Can You Sell a Leased Car?

Selling your leased vehicle can allow you to upgrade to a better ride, reduce your monthly spending and even net a healthy profit.

Currently, used car values are at some of their highest levels ever, with soaring demand and a relatively low number of available vehicles.

Before exploring the range of available options, it's important to ensure you’re selling the vehicle legally. A leased car is essentially borrowed from the lender for the duration of the lease, meaning the leasing company—not the lessee—owns the vehicle.

Car leases often include third-party buyout restrictions, which require the leasing company's permission for you to sell the vehicle.

Carefully examining your lease agreement and contacting the leasing company to discuss your options is the best place to start if you’re looking to sell a leased car. That way, you’ll know exactly which steps to take to make the sale successful and, hopefully, profitable.

So how do you sell your leased car and what are your options?

Option 1: Buy out the lease and sell privately

Buying out the lease and doing a private sale allows you to take full legal ownership of the leased vehicle, enabling you to sell it as you please.

To achieve this, you must cover any remaining lease payments and then buy the vehicle from the leasing company. The price you’ll pay is based on the car’s residual value, which is calculated by the leasing company and reflects the vehicle's value minus what you’ve already paid in lease payments.

The residual value is estimated by the leasing company at the start of the lease, so circumstances like increasing demand over the lease’s duration can sometimes let you purchase the vehicle for less than its current market value when it comes time to buy.

There are numerous residual value calculators available online. These services enable you to enter details such as make, model, year and mileage to provide an estimation of the vehicle’s value.

Ultimately, the residual value figure is set by the leasing company, but it always helps to enter negotiations with as much information as possible.

Once you’ve agreed to a buyout with the leasing company and covered the related costs, it’s time to sell the vehicle, ideally for a tidy profit. With your name now on the car's title, you have a couple of options available.

Sell to a dealer

First, you could try selling the vehicle back to the original dealer or to a third-party operation. This is likely the quickest and most hassle-free option, as dealers need vehicles to sell and have the capital to make you a quick offer.

Selling to a dealer allows you to drive the vehicle in, sell it, get paid, and be on your way, or use the value of the vehicle towards the down payment for a new set of wheels.

However, this may not be the most profitable option, as the dealer’s offer takes into account their operating expenses and other overhead, in addition to the fact that they’re buying the vehicle to sell it, and therefore need to generate a profit.

Sell privately

Selling a vehicle privately through a website like Kijiji Autos can be your best option to get top-dollar for your leased car.

Private buyers aren’t usually looking for a quick resale, so the built-in profit that a dealer seeks shouldn’t be an issue here. While it may take more work since you might need to meet with multiple prospective buyers, selling privately can help you realize the maximum possible return on your vehicle.

Kijiji Autos makes selling your previously leased vehicle easy. Simply write up a high-quality ad, post it and watch the offers roll in. Once you see some offers you like, negotiating with potential buyers helps you sell for the highest price possible.

Option 2: Lease transfer/takeover

This option allows another party to take over the conditions of your lease, essentially replacing you as the contract’s lessee.

Whether this option is possible depends on the lease company’s preferences and the terms of the lease agreement, but it could help you avoid costly penalties for terminating the lease early. Several companies, such as Lease Busters in Canada, exist to guide buyers and sellers through the process of transferring an auto lease.

There will still be fees associated with this route, but it affords you the opportunity to avoid the financial outlay of purchasing the vehicle from the leasing company, as mentioned earlier. You may not see any profit, but you also won’t have to tie up thousands of dollars in becoming the title owner of the vehicle before it leaves your custody.

Lease transfers aren’t always permitted by the leasing company, so it’s crucial to understand precisely what your lease agreement does and doesn’t allow for.

While vehicle leases can seem confusing at first, there are plenty of options open to you if you’re ready to part ways with your leased car.

Whether you buy the vehicle outright or transfer the lease to another person, selling a leased vehicle can be a financial boon, either by reducing monthly expenses or by netting you a healthy profit on the used car market.

Kijiji Autos provides all the information you need to know about selling your vehicle, along with a vast selection of new and used vehicles for you to explore next. We hope this guide helps you navigate the process of selling your leased car and transitioning into a new ride stress-free.