Best Leased Cars to Buy Back and Sell for Profit

·9 min read
  • The average three-year-old used car is worth 31.5 percent, or $7,019, more than its residual value estimated at the beginning of its leasing term

  • The vehicle that is worth the most compared to its predicted price is the Volkswagen Tiguan, with a 61.3 percent or $8,677 increase

  • Because the market value of leased cars is substantially higher than their residual value, lessees can buy the car at the end of their lease term and sell it for a profit

Heightened demand for used cars in the wake of the microchip shortage and the COVID-19 pandemic has led to record high used car prices. While high prices and diminished inventory has created a difficult market for car buyers, consumers who are at the end of their car leases can likely buy their cars and sell them at a substantial profit.

According to iSeeCars.com ’s latest analysis of nearly 10 million car sales, the average three-year-old used car is worth 31.5 percent, or $7,019, more than its residual value estimated at the beginning of its leasing term. iSeeCars compared the projected three-year residual values of new cars from 2018 to current used car prices for three-year-old cars to see which can likely be purchased at the end of their lease term and sold for the highest profit.

“Dealers calculate a vehicle’s residual value based on its projected depreciation, and this value is locked in at the beginning of a car’s lease,” said iSeeCars Executive Analyst Karl Brauer. “With used car prices at record highs, the market value of leased cars is substantially higher than their residual value, which means that lessees can buy the car at the end of their lease term and sell it themselves for a significant profit.”

Leased Cars to Buy Back and Sell for the Highest Profit

iSeeCars determined the top 15 three-year-old vehicles that have the largest difference in value over their predicted price. These cars’ differences are 1.5 to 1.9 times more than the average vehicle. “While all vehicles are worth more than predicted three years ago, these are the cars where the difference between their current value and predicted value is the most significant,” said Brauer.

Leased Cars to Buy Back and Sell for the Highest Profit - iSeeCars Study

Rank

Vehicle

$ Market Value Increase Over Predicted Value

% Market Value Increase Over Predicted Value

1

Volkswagen Tiguan

$8,677

61.3%

2

Dodge Charger

$11,806

55.9%

3

Chevrolet Camaro

$12,346

52.9%

4

Nissan Altima

$6,228

49.4%

5

Volkswagen Passat

$6,400

49.3%

6

Chrysler 300

$8,084

49.2%

7

Nissan LEAF

$6,167

48.3%

8

Chevrolet Malibu

$6,392

48.2%

9

Hyundai Elantra

$5,319

47.9%

10

Mazda MAZDA6

$7,193

46.8%

11

Kia Forte

$4,913

46.7%

12

Jeep Compass

$7,163

46.4%

13

Jeep Cherokee

$7,418

46.3%

14

Nissan Versa

$3,961

46.1%

15

Ford Expedition

$15,830

45.8%

Overall Average

$7,019

31.5%

The off-lease vehicle with the greatest difference from its predicted price is the Volkswagen Tiguan, with a 61.3 percent or $8,677 increase. “The Volkswagen Tiguan more than doubled in sales in 2018 over 2017 thanks to a redesign that included more space and a third row of seats, and it has grown in sales each year since,” said Brauer. “When its residual value was estimated in 2018, it wasn’t in as high demand as it is today.”

Two American performance cars earn the next two spots: the second-ranked Dodge Charger muscle car and the third-ranked Chevrolet Camaro sports car. “Sports and muscle cars saw a surge in popularity during the pandemic as buyers sought fun cars to combat boredom, and the Camaro was among the used cars with the highest price increases over last year,” said Brauer.

Eight sedans make the list, including the midsize Nissan Altima, the midsize Volkswagen Passat, the full-size Chrysler 300, the midsize Chevrolet Malibu, the compact Hyundai Elantra, the midsize Mazda Mazda6, the compact Kia Forte, and the subcompact Nissan Versa. “Sedans typically don’t hold their value well, due to lowered demand for the segment because of consumer preference for SUVs,” said Brauer. “The shortage of used car inventory and price increases amid the microchip shortage, as well as consumers looking for more affordable vehicles during the pandemic, may have heightened the demand for sedans.”

The Nissan LEAF electric vehicle also makes the list, with a 49.2 percent increase of $8,084 over its predicted 2021 price. “The 2018 Nissan LEAF featured a significant bump in EV range, performance improvements, and an exterior facelift, so current off-lease models hold their value better than the previous generation,” said Brauer. “Historically, EVs like the Nissan LEAF depreciated rapidly, but elevated gas prices and increased EV adoption among consumers has further helped the LEAF hold its value.”

Two compact Jeep SUVs make the list: the Jeep Compass and the Jeep Cherokee. “The Jeep Compass and the Jeep Cherokee have declined in popularity and typically don’t hold their value, likely due to consumer preference for other models within the Jeep brand,” said Brauer. “However, the shortage of used cars brought consumers to these vehicles when they may have considered other SUVs during normal market conditions.”

Rounding out the list is the Ford Expedition full-size SUV. “The Ford Expedition saw a 58 percent increase in sales in 2019 over 2018, and full-size SUVs continue to be a high-demand vehicle segment thanks to their flexible seating and cargo capacity,” said Brauer.

Leased Cars to Buy Back and Sell for the Highest Profit: Most Popular Cars

iSeeCars also analyzed the 24 best-selling new vehicles of 2020 to see which have the highest value compared to their predicted price.

Leased Cars to Buy Back and Sell for the Highest Profit: Most Popular Cars - iSeeCars Study

Rank

Vehicle

$ Market Value Increase Over Predicted Value

% Market Value Increase Over Predicted Value

1

Nissan Altima

$6,228

49.4%

2

Jeep Cherokee

$7,418

46.3%

3

Ram Pickup 1500

$10,493

42.5%

4

Honda Accord

$7,056

40.6%

5

GMC Sierra 1500

$12,609

40.2%

6

Chevrolet Silverado 1500

$10,830

39.0%

7

Mazda CX-5

$6,640

37.6%

8

Ford Explorer

$8,961

36.3%

9

Honda Civic

$5,231

36.3%

10

Ford Escape

$5,568

36.2%

11

Ford F-150

$10,811

35.5%

12

Toyota Camry

$5,934

34.8%

13

Toyota 4Runner

$10,348

34.0%

14

Jeep Wrangler

$8,846

32.6%

15

Jeep Grand Cherokee

$8,174

32.2%

16

Chevrolet Equinox

$5,398

32.1%

Overall Average

$7,019

31.5%

17

Toyota Corolla

$4,134

30.5%

18

Honda CR-V

$5,686

28.5%

19

Nissan Rogue

$4,748

27.9%

20

Toyota RAV4

$5,052

26.4%

21

Subaru Forester

$4,980

25.6%

22

Toyota Tacoma

$7,181

25.5%

23

Subaru Outback

$4,905

22.8%

24

Toyota Highlander

$4,768

16.8%

“The demand for these already in-demand vehicles has heightened amid the microchip shortage,” said Brauer. “The vehicles with below-average differences between predicted price and actual price are vehicles that have consistently held their value well thanks to factors including reliability, safety, and low ownership costs.”

Leased Cars to Buy Back for the Highest Profit By Bodystyle

iSeeCars compared bodystyles to see which have increased in value the most compared to their predicted price.

Leased Cars to Buy Back for the Highest Profit by Bodystyle - iSeeCars Study

Bodystyle

$ Actual Price – Predicted Price

% Actual Price – Predicted Price

Coupe

$10,652

42.7%

Sedan

$6,983

40.4%

Pickup

$10,586

37.4%

Minivan

$7,627

32.4%

Overall Average

$7,019

31.5%

Wagon

$4,380

31.2%

Hatchback

$4,565

26.9%

SUV

$6,025

26.0%

Convertible

$5,923

20.6%

The coupe is the bodystyle that has the highest value compared to its predicted price, while the convertible has the smallest difference. “Sports cars surged in popularity during the pandemic, and the disparity between coupes and convertibles is likely because coupes are generally in higher demand than convertibles and convertibles tend to depreciate more because they are more expensive,” said Brauer.

The other segments with above-average value increases include sedans, pickup trucks, and minivans. “Pickup trucks have been in high demand due to the shortage of new pickup trucks and because consumers are willing to pay high prices on used versions when they require them for work,” said Brauer. “Conversely, sedans and minivans are segments that typically don’t hold their value, but consumers are willing to pay higher prices for them in today’s market.”

“Consumers who are nearing the end of their lease should look at the details of their contracts to see their car’s residual value and should compare that to the car’s current market value,” said Brauer. “If their car has a substantially higher market value, they could purchase the car and sell it themselves for a major profit. They could also use that equity toward another lease or vehicle purchase, but selling the car on the private market would be the most lucrative option if possible. Consumers should also remember that selling their leased car for a higher-than-predicted price could be offset by buying their next vehicle for more than it would have cost, pre-pandemic.”

A consumer can find a car’s estimated market value through online tools like the iSeeCars free VIN check .

Methodology

iSeeCars.com analyzed almost 10 million new and used car sales to determine which model year 2018 cars could likely be purchased at the end of their lease term and sold for the highest profit. It estimated three-year depreciation values for new cars in 2018 and then applied these values their prices to obtain predicted three-year residual values. It then compared the predicted residual values to average used car prices of model year 2018 cars sold in May - July 2021. The models were ranked by the percentage difference between the predicted residual values and average used prices, and these differences were also aggregated at the bodystyle level.

About iSeeCars.com

iSeeCars.com is a car search engine that helps shoppers find the best car deals by providing key insights and valuable resources, like the iSeeCars free VIN check reports. iSeeCars.com has saved users over $306 million so far by applying big data analytics powered by over 25 billion (and growing) data points and using proprietary algorithms to objectively analyze, score and rank millions of new cars and used cars.

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