Buying back these leased cars could bring you the greatest profit
(iSeeCars) – Lessees can benefit from record used car prices that are well above the calculated residual value.
- The average three-year-old used car is worth 35.7 percent, or $ 7,952, more than its residual value at the start of the lease
- The vehicle that is worth the most compared to its forecast price is the Volkswagen Tiguan, up 69.4 percent, or $ 9,820
- Since the market value of leased cars is well above their residual value, lessees can buy the car at the end of the leasing period and sell it at a profit
The increased demand for used cars in the wake of the microchip shortage and the COVID-19 pandemic has led to record high prices for used cars. While high prices and low inventory have created a tough market for car buyers, consumers who are at the end of their car lease can likely buy their cars and sell them at substantial profit.
According to iSeeCars.com’s latest analysis of nearly 10 million cars sold, an average three-year-old used car is worth 35.7 percent, or $ 7,952, more than its residual value at the start of the lease. iSeeCars compared the forecast three-year residual values of new cars from 2018 with the current used car prices for three-year-old cars to find out which ones can be expected to be bought at the end of their lease term and sold at the highest profit.
“Dealers calculate the residual value of a vehicle based on projected depreciation, and that value is determined at the start of the leasing of a car,” said iSeeCars Executive Analyst Karl Brauer. “With used car prices at record high, the market value of the leased cars is well above their residual value, so that lessees can buy the car at the end of the leasing period and sell it themselves at a significant profit.”
Leasing vehicles for repurchase and sale with the highest profit
iSeeCars has identified the top 15 three-year-old vehicles that show the greatest difference in value compared to their forecast price. The differences between these cars are 1.4 to 1.9 times greater than that of an average vehicle. “While all vehicles are worth more than they were forecast three years ago, these are the cars where the difference between their current value and the forecast value is greatest,” said Brauer.
|Leasing vehicles for repurchase and sale with the highest profit – iSeeCars study|
|rank||vehicle||$ Increase in market value above the forecast value||% Increase in market value compared to the forecast value|
|1||Volkswagen Tiguan||$ 9,820||69.4%|
|2||Volkswagen passat||$ 7,331||56.5%|
|3||Dodge Charger||$ 11,642||55.1%|
|4th||Mercedes-Benz C-Class||$ 15,438||55.1%|
|5||Kia Forte||$ 5,697||54.1%|
|6th||Hyundai Elantra||$ 5,960||53.7%|
|7th||Chevrolet Camaro||$ 12,483||53.4%|
|8th||Jeep compass||$ 8,212||53.2%|
|9||Nissan LEAF||$ 6,742||52.8%|
|10||Nissan Altima||$ 6,642||52.6%|
|11th||Mazda Mazda6||$ 8,016||52.2%|
|12th||Chrysler 300||$ 8,536||51.9%|
|13th||Volkswagen Jetta||$ 5,951||51.7%|
|14th||Chevrolet Malibu||$ 6,822||51.5%|
|fifteen||Nissan Versa||$ 4,353||50.6%|
|Overall average||$ 7,952||35.7%|
The off-lease vehicle with the biggest difference to the forecast price is the Volkswagen Tiguan with an increase of 69.4 percent or $ 9,820. “The Volkswagen Tiguan more than doubled its sales in 2018 compared to 2017 thanks to a redesign with more space and a third row of seats, and sales have grown every year since then,” said Brauer. “When its residual value was estimated in 2018, it wasn’t as popular as it is today.”
Eight small and midsize sedans make up the list, including the midsize Volkswagen Passat, the compact Kia Forte, the compact Hyundai Elantra, the midsize Nissan Altima, the midsize Mazda Mazda6, the compact Volkswagen Jetta, the midsize Chevrolet Malibu and the subcompact Nissan Versa. “Sedans typically don’t hold up in value well as demand for the segment has declined due to consumer preference for SUVs,” said Brauer. “The shortage of used car inventories and price increases amid the microchip shortage, as well as consumer demand for cheaper vehicles during the pandemic, have increased demand for sedans.”
Two American performance cars also make the list: the third-placed Dodge Charger muscle car and the seventh sports car, the Chevrolet Camaro. “Sports and muscle cars grew in popularity during the pandemic as shoppers sought fun cars to fight boredom, and the Camaro was among the used cars with the highest price increases compared to last year,” said Brauer. The large Chrysler 300 sedan, a more upscale version of the Dodge Charger, is also on the list. “The Chrysler 300 is likely to see increasing demand as an alternative to traditional luxury cars that have previously had limited availability.”
The Nissan LEAF electric vehicle also made the list, up 52.8 percent, up $ 6,742 from its forecast price for 2021. “The 2018 Nissan LEAF featured significant improvements in EV range, performance improvements and a external facelift so that current off-lease models hold their value better than the previous generation, ”said Brauer. “In the past, electric vehicles like the Nissan LEAF have depreciated rapidly, but increased gasoline prices and increased consumer acceptance of electric vehicles have continued to help the LEAF maintain its value.”
The Jeep Compass also makes the list. “The Jeep Compass has lost popularity and typically does not retain its value, likely due to consumer preference for other Jeep brand models,” said Brauer. “However, the shortage of used cars drew consumers to the Compass when, under normal market conditions, they may have considered other SUVs.”
The list is rounded off by the Mercedes-Benz C-Class. “Luxury vehicles like the C-Class have seen a surge in demand, likely because buyers can spend additional resources on cars due to the reduced travel and entertainment options during the pandemic,” said Brauer.
Buy back leased vehicles for the highest profit From bodystyle
iSeeCars compared car bodies to see which had gained the most in value compared to their forecast price.
|Buying back leased cars for the highest profit by body style – iSeeCars study|
|Body style||$ Actual Price – Predicted Price||% Actual Price – Predicted Price|
|Overall average||$ 7,952||35.7%|
|Pick up||$ 9,669||34.2%|
The sedan is the body with the highest value compared to the forecast price, while the convertible has the smallest difference. “Sedans usually don’t hold in value well due to lower demand as consumers prefer SUVs,” said Brauer. “However, as used car prices rise and SUV inventory dwindles, consumers bought sedans because of their availability and relative affordability.”
Coupés had the second highest increase in value, convertibles the lowest. “Sports cars have grown in popularity during the pandemic, and the discrepancy between coupes and convertibles is likely because coupes are generally more in demand than convertibles and convertibles tend to depreciate more because they are more expensive,” said Brauer.
“Consumers who are nearing the end of their lease should look at the contract details to determine the residual value of their car and compare it to the current market value of the car,” said Brauer. “If your car has a much higher market value, you could buy the car and sell it yourself for a big profit. You could use that equity to make another lease or vehicle purchase, but selling the car in the private market would be the most lucrative option if possible. Consumers should also bear in mind that selling their leased vehicle at a higher than forecast price could be offset by buying their next vehicle at a higher price than it would have cost before the pandemic. “
A consumer can determine the estimated market value of a car through online tools such as iSeeCars’ free VIN check.
More from iSeeCars.com:
iSeeCars.com analyzed nearly 10 million new and used car sales to determine which 2018 model year cars were likely to be bought and sold at the highest profit at the end of their lease term. It estimated the three-year depreciation values for new vehicles in 2018 and then applied those values to get projected three-year residual values. The forecast residual values were then compared with the average used car prices of the 2018 model year cars sold from August to October 2021. The models were ranked according to the percentage difference between the projected residual values and the average used prices, and these differences also became the bodystyle level.
iSeeCars.com is a car search engine that helps shoppers find the best car deals by providing key insights and valuable resources like the free iSeeCars VIN test reports and Best Cars rankings. iSeeCars.com has saved users over $ 306 million to date by using big data analytics based on over 25 billion (and growing) data points and proprietary algorithms to objectively analyze, rate and evaluate millions of new and used cars .
This article, the Best leased cars for repurchase and profitable sale, originally appeared on iSeeCars.com.
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