Tips for leasing cars as shortage sends resale prices skyrocketing
FAIRLAWN, New Jersey (WABC) -- The automobile market has been turned upside down during the COVID-19 pandemic, as a never-before-seen shortage of cars has sent the value of leased cars shooting skyward.
Many people were not driving as much because of the pandemic and were working from home, meaning their leased vehicles may not have depreciated as much as they normally would.
So if you're in the market, how do you avoid sticker shock? And if your lease is ending, what do you need to know before turn in your car?
Cars with low miles in good condition are in high demand, and the supply chain shortages have left dealers with little to no inventory.
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Don Chittum, general manager of Jack Daniels VW in Fairlawn, said his normally full lot only has 12 new vehicles to sell or lease.
"If your lease is up now, we'll do everything we can to get you out of the car," he said. "Maybe extend your lease a couple months until we get through these hard times with the chip issue."
His advice, whether you're extending or looking to buy or lease a new car, is to shop now -- even if your lease isn't up for a few months.
"Don't want until the last second," he said. "Come in now. We'll pre-order the vehicle that you want. We'll price protect you, and we'll get you into the car when you're lease is up."
Another option is purchasing your leased car.
"Probably, you're going to get one of the best deals in a used car of anybody else in the marketplace," Autotrader Executive Editor Brian Moody said.
He customers with cars have some power in this low inventory environment.
To get a deal, first research: Find out what your car -- make, model and year -- is currently going for in your region before walking into the dealership.
"Knowing that they want your car that's in probably good shape and probably has low miles, I think you can go in there with your returned lease vehicle and say, 'How how can you help me turn my car in here? I do need a car. What can we do to make it advantageous for both of us?'" Moody said.
Ask if they're willing waive any fees or charges for minor scrapes or dings.
"You can ask, 'Hey, if I turn my car in here, can all of that be forgiven, and I just just turn around and walk away?'" Mood said.
"End of lease terms usually account for small damage, worn out tires," Moody said. "They'll charge you for that. You can ask if all that can be forgiven, I'll turn it and walk away."
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Many dealers don't have much wiggle room on price right now, so you an request perks like free oil change service or perhaps a discount guarantee on your next car.
"They can always say no, but it doesn't hurt to ask," Moody said.
Also, review your lease contract before shopping around. You may not have flexibility on where you can turn in your car, and some leases have restriction on third party buyouts or swapping leases.
Remember, you can't sell your lease to another individual without buying yourself out first.
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