How to Profit From Leasing a Car

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162.

Well there on the show we want to help you.

Make money and if you're losing -- card Hume AB it to make a profit.

Thanks to the rise in used car prices joining us now is Michael Moore founder and CEO of car lots it's a used car consignment business that helps people sell their cars birthday and I was always under the impression that it was a bad idea overall just a -- financial experts always -- -- Was a bad idea you -- maybe it's a good -- now why.

Well thanks for having me Cheryl.

It's a great idea -- to to lease.

In in general because really you're just paying for the depreciation of of the car over time.

What we're what we're really talking about today though is.

There and the rise -- used vehicle prices has created a dynamic where those who leased cars 2345 and six years ago.

Those leases are are expiring and people have value built into their leases today that they may not know exists.

All right so basically because of the way that the market has shifted you're saying that.

It's a gray is a great idea to some prices are we're talking about -- -- and make it say that I at least a vehicle for the last two years I wanna sell -- now what kind of profit and I expect.

Sure it you know it's different for everybody there are about two million leases that expire this year.

I think on average is somewhere between two and 52 and 5000 dollars of people have.

The value in their leases as -- that you know generally across the market somewhere between four and ten billion dollars worth of value in people's pockets.

My example -- the least oh wait XC 93 years ago Volvo.

And I just I just checked on the residual value and that the leasing company says I -- them 171000 dollars to buy that lease out.

I can sell that car in the private market for 26000 dollars so that's you know -- hidden value in that lease of 9000 dollars.

Which -- is is great that's cash -- not in my pocket.

Much -- car models work best under this game that you're talking about them which car models for example as you -- the Volvo hold their residual values so.

What's your viewers they thinking about.

In terms of the models that are work best for this.

Yeah I mean everyone should really check out their own numbers you know depending on -- deals that people got into several years ago and depending on the current market value of cars it could be different for everybody.

I think my example is probably -- on the on the on one side of the of the curve.

-- but I think most people have somewhere between two and 3000 dollars worth of value in nearly steel.

Certainly cars that get good fuel economy.

Values of those cars have held pretty well.

Some of the gas guzzlers not so much although my cars is someone of -- of an anomaly.

I have a couple questions for you number one does it matter how much over or under you are on the mileage that was built into release.

And number two we're to the consumers get the money to buy it then to go sell it where they flip it.

Sure Tom yes certainly mileage matters -- you know when you turn in -- -- at the end of program.

You you -- -- money if you went over over the mileage and in that case it might make even more sense to sell the car privately.

And then realize that value if you corrected under the mileage and you don't owe money you you'll have to do the math but -- my gut tells me that you'll still you'll still make a lot of money.

Where they get the money to finance to -- car and then turn around sell.

Yes sure so typically what you can do is is sell the car simultaneously with the acquisition at least so what you can do is is -- To private market order shop like ours a car lots.

And sell the car the private market and have the funds flows directly to your leasing company so that it's it's a simultaneous transaction.

And that way you don't have to funded and in the mid term.

But but there are certainly other ways to finance -- car purchase.

-- Michael -- Carla CEO Michael thing.

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How to Profit From Leasing a Car

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