You are here: Home / Car Financing and Leasing / Upgrading a Leased Vehicle

Upgrading a Leased Vehicle

A question that arises frequently about leases is whether there is "any way to trade out of a lease to a more expensive vehicle." This is a great question as sometimes peoples' needs and desires change and they would like to trade in their current vehicle for something fancier and often larger. The circumstances of these "trade outs" can be due to the addition of a new child in the family or a family member becoming infirm or disabled or a job change -- all situations requiring a larger car with more amenities. Sometimes people just come into money and want something snazzy. Regardless of the reason, it is worth the effort to investigate changing your vehicle leasing situation.

Many automakers (and thus dealerships) and leasing companies will make some arrangements with people who want to "trade up." Of course whether they agree to this is dependent on a lot of factors including the condition of the car, how popular the car is (thus the ease of resale), the condition of one's credit and whether or not lease payments have been made on time. Call the dealership and then the leasing company and talk with them about the terms. Some are more liberal about their trade-up policy than others. Compare what the dealership has to say to that of the leasing company. One may be more amenable to the change than the other. Work with the company that is most helpful.

Make sure to research the current value of the vehicle to be traded-in. See what the wholesale and retail values of the car are using the New Car Buying Guide "Get A Price" feature. (It is on every page of the site.) Also check the wholesale and retail prices for the car in the National Automotive Dealers Association (NADA) pricing. The NADA prices are what the dealerships use when determining the price they will pay for a car and those prices are lower than what Kelley Blue Book (KBB) quotes. KBB prices are used when the dealers sell, because they are higher. NADA prices are used when the dealers buy, because they are lower. Do what the dealers do.

Some leasing companies will charge a substantial penalty for the change over, but it might still be worthwhile if your needs have changed. But that fee is negotiable. Of course, the leasing companies won't mention that, but it is worth inquiring. Another important factor in the trade-up of a vehicle under lease is whether or not one is staying with the same leasing company. If the same leasing company can be used, the customer is more likely to get cooperation than if they have to change lessors.

There are companies like BMW that encourage people to trade-up, waiving fees in order to get people into their products and stay in them -- and then have a low mileage used car to sell or release. I had a conversation with the head of National Leasing for BMW. He said if a leased BMW with a reasonable amount of miles (not too far over the allowed mileage of the lease) is to be traded-up that they encourage this and in fact want this situation and like to make it happen. In a few cases the person leasing the car has gotten money back. Good ol' BMW.

This is probably the case because entry level BMWs are popular and always in demand. BMW must love to have good quality off-lease product available and therefore gives incentives to get back popular cars in good condition.

If it is a luxury or near-luxury car to which the consumer wants to trade-up, the makers of those vehicles and their dealerships are likely to do their best to get that person into their brand. It won't be easy moving from one automaker's product to another or from one leasing company to another, but it is certainly an option worth exploring.

If lease payments have been made on time (or close to it) and the car that is to be replaced is in good shape and close to the miles allowed by the lease -- in other words, money won't be owed for excess mileage -- there is a good chance of getting the upgrade you want. It also might be helpful to have completely researched the next car to be leased, the price to pay and the desired features. Be ready to deal and make a quick change. A salesperson who thinks they are talking to someone motivated to make an immediate vehicle change is much more likely to be helpful.

Good customers get considerations.