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I have leased for the previous 3 years an SUV from Kia. The lease terms claimed a 36,000 mileage but I have only put 19,000 miles on the vehicle. Everyone is telling me that I should be able to "get equity back on the vehicle at return" but when I told the dealer that I would be returning the vehicle and wanted to discuss what equity value was left, they said that by virtue of returning the car I forfeit my equity in the vehicle.

Since it isn't in their best interests to explain to me how I'd go about getting this equity resolved, I'm hoping that other people who've been in this situation before can let me know how best to proceed. I currently don't need the second vehicle, so converting the equity in a second car is not really attractive. The dealer salesman mentioned I could sell both the leased car and our current car and put equity of both items into a third new car, but not sure if that is advantageous or not.

My question is how to unlock the equity of the vehicle -- preferably by getting a big check from someone, but if the only way to do that is by shuffling vehicles around, I'd love to hear input on that.

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    'everyone' is telling you this, won't at least one of them explain how?
    – JTP - Apologise to Monica ♦
    Commented Apr 12, 2014 at 1:24
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    what do you mean by "equity" exactly? That's not a term usually applied to cars...
    – littleadv
    Commented Apr 12, 2014 at 2:32
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    Are there any terms in your lease agreement on what you get if you don't use the entire mileage limit? Any references to what happens if the vehicle when returned is worth more than the expected value at the end of the lease? These are the questions to be answered first.
    – JB King
    Commented Apr 12, 2014 at 4:04
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    @littleadv - He's trying to capture the difference in value from what the dealer projected for their 36,000 mi car vs his 19,000 mi car. If he had a buyout price at lease end, it would be based on 36K, right? And he could then by a car at the 36K price, but sell a car with only 19K. If he has no buyout price pre-agreed, he has no potential to 'unlock' his equity. I agree, never heard the term before.
    – JTP - Apologise to Monica ♦
    Commented Apr 12, 2014 at 12:07
  • On some leases the car can be purchased at any time during the lease without penalty. You can buy it or a dealer can buy it. But a dealer wants to profit and is not likely to offer you anything close to the car's fair market price. To maximize your "equity" you'll have to buy out the lease and sell the car privately. If you want to optimize, avoiding the hassle and risks of a private sale, look for a dealer who will share the equity with you; but the difference between buyout price and fair market price must be large enough to make it worth their while.
    – Tim
    Commented Nov 18, 2020 at 13:29

4 Answers 4

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Since you are leasing the vehicle, you have no equity in it. To get that equity, you would first have to own, which you probably have the option to do if your lease contract has a buyout clause. So buy the vehicle at lease termination, and (theoretically) get a better price selling it, if the low mileage you put on it really does have market value.

From my own limited experience, chances are the buyout clause will stipulate too high a price to make the whole exercise worthwhile (basically, a projected "retail" value of the vehicle at the end of x lease years). You of course would have to be comfortable that you could readily sell for better, and you would take some brief ownership risk. But if the car is pristine, who knows; may well be worth it.

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  • +1 for [does your] "lease contract have a buyout clause?"
    – JTP - Apologise to Monica ♦
    Commented Apr 12, 2014 at 12:08
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I just returned a leased 2013 jeep unlimited...I was allowed 15,000 miles a year for 36 months. My buyout was $19,000. The jeep was worth $28,000...I had 34,000 miles on the jeep. I did buy the jeep and turned around and sold it back to them for $5,000 more than I paid for it. This I used for a down payment on a new Jeep lease.

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  • This is fascinating...is this for real? This makes me wonder if one could negotiate an even more favorable buyout clause and work this scenario backwards. Specifically because I bet most people leasing just want to ink and drive away in the new vehicle, and I bet the dealerships aren't accustomed to pushing that aspect of an agreement. So it seems like it would be simple to say..."hmm...I'm on the edge here. I might want to buy it after three years, Can we get the buyout down to X?" I'm tempted to go just that far in a convo with one just to see if they entertain it. :)
    – elrobis
    Commented Dec 3, 2016 at 2:17
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The response above saying "you have no equity" is incorrect. I have actually used the equity in a leased vehicle, but the catch is, you must lease or purchase another vehicle from the same manufacturer (this may actually apply to the dealership, not just the mfr; in my transaction, I stayed with the same mfr.). The reason is, they know they can get more for the vehicle than what they originally estimated when you initiated the lease. The dealer would never disclose this, of course. It's extra money for them.

Here's what I did: I had a Jeep Patriot that was well under the mileage calculation on my lease. I called Chrysler Corp customer service. Based on the vehicle's age and mileage, they told me I have $2000.00 in equity. Convenient, as we had some body damage that was estimated at $1900.00. When I brought the vehicle in, I mentioned the equity and the cost of the damage and the dealer said, "Yep, you can walk away from the Jeep without any out of pocket for the damage."

Technically, I left $100.00 on the table, not to mention, my quote was from a 3rd party repair company (retail) and the dealership could make the repairs at wholesale cost. But I was just happy to not have to pay for the repair. Lease equity is real.

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  • Thanks for this. In my case, we were going to move to a one car family so I wasn't going to re-lease. The story got worse afterwards. I was unaware that most people negotiate out the disposition fee prior to signing and I got hit with a $400 fee a few months later. Caveat emptor, I suppose.
    – Peter Grace
    Commented Jul 10, 2014 at 13:59
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    While the dealer said you had equity, you didn't really have equity. The dealer is just using 'equity' as a shorthand for saying they will give you a credit on termination, and to make you feel better. It isn't equity by any technical definition.
    – DJClayworth
    Commented Jan 5, 2015 at 17:35
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We have a Honda Accord, 2014, and the 3 yr. lease is nearly up. Our equity will be the difference between the Current Market Value and the residual value. That difference (equity) can be applied to any repairs, charges, etc. or applied to a new lease or purchase.

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