YOUR LEASE END OPTIONS

Here are the five options you have if your lease is coming to an end.

Now in 2023, you have more options with your lease than in the past.   

When your car lease ends or gets close to the end, you have several options to consider. Each option has advantages and disadvantages, so weighing your options carefully before deciding is essential.

Option 1 – Return your lease

This is the most common choice we consider when our lease ends, and many people even believe this is the only option available. If you return the car in good condition and with no more than the allowed mileage, you will only have to pay your lease disposition fee. Most turn-in costs average around $350. Check your lease contract to ensure you know exactly how much so you are not surprised with the bill. Inside TIP- Your local dealer needs nice used cars like your lease. There is a chance that your selling dealer can or will take it back, so you don’t have to pay the Disposition Fee. But know you are responsible for the fee if you turn it in. You may be responsible for additional charges if you exceed your mileage allowance or damage the car. Click here for essential items to check on your lease vehicle before you turn it in. 

Option 2 – Buy your lease out

Buying out your lease is another option. If you like the car and want to keep it, you can buy it for the residual value, which is the vehicle’s estimated value at the end of the lease. However, if the car’s market value is lower than the residual value, this may or may NOT be good to do. Only consider this if you have done your research first. In other words, look up the value to ensure it aligns with what you must pay to buy out the lease. Here is an example of what I mean- If the buy-out or the end amount you have to pay is, let’s say, $25,000 and similar ones are selling for $23,000, it could be better to buy out your lease. Of course, you will be paying $2000 more than the value of that vehicle! That is one of the reasons a lease is an attractive option. But, in the end, you don’t have to worry about the value; you can turn it back in. 

Option 3 – Sell your lease

You can sell it to a private party. You must buy the lease out first; then, you can sell it to whoever you want. However, this can be a tiring option. You will have to have the cash, or you will need to get a loan for the buyout. Then you will need to wait for the title, which can take up to 4 to 6 weeks to get in your hand. So make sure that it will be worth your energy and time. The easier option is to sell it to a dealer. Most leases now (since covid) can only be purchased by that brand or the lessor (you). Third parties, other brand dealers, or dealerships can only buy out your lease. I’ve included a complete list of brands and the lease buyout options here. I advise shopping it around at a few dealers(the brand of your vehicle) to maximize the potential money that you could be getting back. This is much easier because you don’t have to buy it and wait. So they can buy it and give you a check on the spot in most cases. 

Option 4 – Trade in your lease

This has become a great option and should look at now more than ever. When you trade in your car, your vehicle may have equity (you owe less than the value). This can be applied to purchasing or leasing a new or used vehicle. This can be an excellent way to get out of your current lease and into a new car without having to come up with a sizeable down payment.  

Option 5 – Extend your lease

 is a good option if you still need time to decide what to replace it with. As with any lease, the opportunities to extend differ with every manufacturer.  When you extend your lease, you’ll get to keep the exact vehicle and, most of the time, the same payment for an extended time. The number of months can vary greatly depending on what bank your lease is through. Some will allow a month-to-month extension for a certain amount of time—others, you might have to commit to a new term, usually three or six months. A year is usually the most that you will find as the most extended extension they will allow, but I have had customers in certain situations go up to two years. Most leases are three years. Usually, that is the sweet spot for the best payment, but it is the same as the warranty period. So if you extend for longer than the factory warranty, know that you ARE responsible for any problem or issues that might occur during that time. 

No matter which option you choose, it’s essential to research and understand the terms and conditions of your lease agreement. Here are a few other things to keep in mind:

• Mileage allowance. Your lease agreement will specify a maximum mileage allowance for the lease term. If you exceed the allowable amount, you’ll be charged for each additional mile.
• Wear and tear. Your lease agreement will also specify what constitutes excessive wear and tear. For example, you may be charged for repairs if the car is returned with excessive wear and tear.
• Residual value. The residual value is the car’s estimated value at the lease’s end. 
• If you need help determining which option is right for you, talk to the dealer or leasing company to be sure of your options. They can help you understand your options and make the best decision for your needs.

Here are some additional tips for making the most of your end-of-lease options:

• Start planning early. Be sure to decide what to do with your leased car before the last minute. Give yourself plenty of time to research your options and make a decision that’s right for you.
• If you’re considering buying the car, and will be financing, be sure to get multiple quotes from different finance sources. Depending on the brand, you don’t have to go through a dealership to handle the buyout process.  This will help you get the best possible interest rate for your loan.
• Don’t buy out the lease until it’s up. If you have made the decision, it might even cost you more money in some cases. 

Following these tips, you can maximize your end-of-lease options, get into the right car faster, and save money.