It's never too soon to be thinking about the end of your lease. Many people who know they should do some homework and prepare for the beginning of a lease overlook the need to also prepare for the end of the lease as the time nears.

Your lease-end options

At the normal end of a lease, you may have the following options: return your vehicle, extend your lease, re-lease, purchase, or trade.

Depending on the details of your particular lease situation, some of these options may be available to you while others will not be.

How it works

About a month before the end of your lease, you will be contacted by your leasing company. They will instruct you regarding having your vehicle inspected and returned to them. Normally, the return is made to a dealer, from which the lease company will pick up the vehicle.

They may also remind you of your option to purchase your vehicle and provide you a purchase buyout price, which may be a better price than stated in your lease contract. They may also offer to extend your lease for specified terms. They won't tell you, but you may also be able to use your vehicle as a trade-in on a new lease or purchase.

Be careful of your lease-end decision

Don't make a quick decision about which lease-end option you'll take. For example, if you simply return your vehicle to the lease company without doing your homework, you may be handing them built-in value that belongs to you. They'll love you for the gift.

But what if you have exceeded your mileage limits or have some damage to your vehicle? Is it best to return, or to purchase? Can the mileage and damage fees be negotiated if you decide to return?

Is extending your current lease or re-leasing a smart thing to do? When is it advisable to use your leased car as a trade-in? Do you still have to pay for excess mileage and wear-and-tear?

If you decide to purchase, do you have to pay the lease company's purchase price? Is it negotiable? How do you determine what price to offer? Why do some lease companies refuse to negotiate? Does purchasing avoid paying mileage and damage fees?

What to do

Answering the above questions and deciding what to do requires a little homework and careful consideration of all your options. Remember, it's just as important to make the right decisions at the end of a lease as it is at the beginning. But each situation is different and must be examined on its own merits. There is no standard answer that fits every case.

Getting answers

If you need help in making your lease-end decision, our Lease Kit contains a special comprehensive section, "Lease-End Advisor," that provides answers to all the above questions, as well as a detailed explanation of each of your lease-end options — and how to go about determining which option will work best for you, given your particular situation.

If you decide to buy your vehicle, this section of the Lease Kit tells you what to pay and how to deal with the lease company. If you're in a position to trade, it'll tell you how.

If you are over your mileage limits or have excessive wear and tear, this section tells you how to handle this common situation. In some cases it's better to return; in others, it's better to buy or trade.

If you think you might want to re-lease your vehicle, this section of the Lease Kit explains how to determine if this is a smart choice and warns of some common problems.

If you decide to return your vehicle, this section of the kit tells you what to expect. It explains how to handle the inspection and return process to minimize the possibility of surprises from the lease company.

Again, this is all part of the Lease-End Advisor in our Lease Kit.

Thank you for visiting the Lease Guide. Good luck and good leasing!