Millions of Expiring Car Leases Could Mean Big Saving on New CarsDec. 22, 201601:40
It's nearly impossible to avoid car ads during the holiday season, but if you really want to save big on a set of wheels, some experts are recommending you take advantage of this year's bumper crop of vehicles recently returned from a lease.
The draw? Not just a lower price and a chance to get additional features, but customers can avoid a drop in value when the new car is driven off the lot.
Diana Dennis of Houston, Texas, saved around $8,000 by purchasing a 2016 Dodge Challenger that had only been leased for about a year.
"I was ecstatic. I was extremely happy I walked out of here like I just got a deal," Dennis told NBC News.
According to J.D. Power Ratings & Research, this year there is a 33 percent year-on-year surplus of cars that are being returned after a lease. The average lease for many of these cars was three years.
"The original owner or the bank takes the depreciation value, so you - from a consumer standpoint - are buying a 'like-new' vehicle at a reduced cost," said Keith Ahrens, New Car Sales Director at Helfman Dodge Chrysler Jeep Ram.
Related: After a Year of Recalls, Americans Are Now Satisfied With Their Cars
Buying a car at the end of the year also gives buyers more bargaining power, because car dealerships are incentivized to meet sales quotas at the end of the year.
By buying an off-lease car, Dennis was able to stick to her budget and even got extra features that she would never have been able to afford in a new car.
Experts say the best selection is available now as leased cars are coming off the road.
"Buying an-off lease car is a great idea if you don't mind having some mileage on it," said Matt DeLorenzo, from Kelley Blue Book. "And cars are a lot better than they were 10 years ago. So if you are going to keep the car for a while off lease is the way to go," he told NBC News.
DeLorenzo also says the biggest thing a consumer can do to save money is doing his or her homework before walking into a car lot.
“Go online to sites like ours and find out what other people are paying for a new car or leasing a new car," DeLorenzo said.