Understanding Your Trade-In Value
Do you maintain 100% of your vehicle's service needs, detail it regularly, and in general take overall great care of your car? If so, when the time comes to purchase a new vehicle, like many others, you are probably surprised and somewhat disappointed when you discover your vehicle's true value.
The disappointment and surprise stems from two main factors. The first originates when dealerships provide a true market value for your car which is almost always a lesser amount in comparison to online guides in determining actual trade-in value. The second is due to ownership pride from the love and care that you have given your car. It can be insulting to see your vehicle valued at 50% of its original selling price only three years down the road, especially when you have taken such good care of it.
When was the last time you gave leasing a good hard look? Leasing versus purchasing really does make sense for many reasons, but simply put, at lease end you have options rather than obligations. Below we have listed just a few of highlights of leasing that demonstrate the benefits you are given by opting for a lease versus purchase.
So, you still say you want to OWN your car? Are you sure?
- Most people only keep the cars they finance for about 3 to 4 years. At that rate they never own the car anyway; the bank does.
- If you buy the car, whenever you finally trade or sell it you'll still be held liable for the condition of the vehicle at that time which is really no different than condition requirements for leases.
- If you don't want to lease because you hate the idea of being locked into the vehicle, you don't have anything to worry about. You can exercise the same options during your lease as if you had purchased the car.
- The equity in your vehicle can be applied toward a new purchase if you trade it in.
- You can sell to a private party at any time and we will even help with the paperwork.
- If you want to purchase the lease before the lease term is up, you can convert your lease into a purchase at any time without penalty.
How do market conditions influence the value of your vehicle in a lease?
- The manufacturer has predetermined the value of your vehicle for lease end. Your only requirement is that you maintain the vehicle and return it in reasonable condition as determined in the lease agreement. With a lease, you are not subject to market conditions and have no risk regarding depreciation.
- On the other hand, heavy depreciation could be costly for someone who purchased, especially if market conditions are not favorable. Factors such as high gas prices or a "poor economy" often impact your vehicle's trade-in value.
How does an accident affect you on a lease versus a purchase?
- If you are involved in an accident and you have your vehicle repaired you will not incur any extra lease charges.
- If you had purchased your car, the value of your vehicle would diminish greatly. Who wants to buy a used car that's been in an accident?
Mileage and use is never an issue.
- If you are concerned or know someone who had a bad experience due to mileage constraints, we can customize a lease program specifically for your needs.
- Keep in mind, even when you own/purchase a car, excessive mileage (more than 10-12k miles/yr) will weigh heavily in reducing the value of your trade-in.
The benefits of the factory warranty!
- Under most lease options, you will be taking advantage of the full factory warranty and be at minimal risk to high cost mechanical and electrical repairs.
- An additional benefit you may not realize at first is the avoidance of costly maintenance requirements you will incur as the vehicle continues to age.
Lease-end options are wide open for you to benefit from.
- If your vehicle is worth more on trade than the predetermined residual value then you can take advantage of applying that equity toward your next lease/purchase.
- If your vehicle is worth less than the predetermined residual value, then you turn it in and walk away and let the bank take the loss.
- If the vehicle's residual value is in line with the market value and you really enjoy the car then you can buy it. We will even help with the process and as an additional benefit you'll get new car rates if you finance it.
CASH BUYERS!! If you typically pay cash for your vehicles, there's even a lease for you.
Cash buyers that don't want payments can take advantage of our '1-pay lease' program. In a 1-pay lease, you automatically qualify for a special reduced lease rate on top of the other great benefits you get from leasing without ever worrying about a monthly payment.
Jaguar and Porsche are willing to take all of the risk by setting a value without knowing for certain what the future holds. Why not let them take the risk and limit your own?