Lease End Considerations
It’s never too soon to be thinking about the end of your lease. If you plan to return your car, be mindful of the miles you drive and the condition of the vehicle during the time you are leasing.
Many people who do a good job of preparing for the beginning of a car 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 car lease, you may have the following options:
- Return your vehicle
- Extend your lease
- Purchase your vehicle
- Trade your vehicle
Depending on the details of your particular lease situation, some of these options may be practical for you while others may not.
If you need to get out of your car lease early
To end your lease before its normal termination date could be costly and troublesome unless done correctly. You can’t simply return your car and walk away in the middle of a lease.
You have a number of possible options, but choosing the right option for your particular situation requires a little homework. Choosing correctly also protects your credit history. Your lease contract explains your obligations, in not-so-simple language, if you decide to end your lease early.
Our Lease Kit contains a special section, the Lease Termination Guide, that can help simplify what can otherwise be a very confusing situation. It provides detailed explanations of all termination options, as well as examples and guidelines that you will need to make the right decision.
How Normal Car Lease-End 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. The dealer to which you return your vehicle does not need to be the same dealer from whom you leased, but the dealer should sell the same brand of car that you are returning.
See Lease Return Inspection for more details about car lease returns.
The lease company 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 the guaranteed price 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. See Trade Leased Car for more details about using your leased car as a trade when buying or leasing a new car.
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 equity value that belongs to you. They’ll love you for the gift.
You should use one of the online used-car pricing web sites, such as Kelley Blue Book to determine the trade-in and sale value of your vehicle. If that value is greater than the purchase option price in your lease contract, you should consider trading your vehicle or buying it from the lease company to recover your equity money.
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?
If you need more help in making your lease-end decision, our Lease Kit contains a special comprehensive section, the 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, the Lease-End Advisor 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 Lease 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.
This concludes our Lease Guide series. However, the LeaseGuide.com web site contains more, much more, information, calculators, tips, advice, and answers to help you make smart car leasing choices.
Good luck with all your car leasing from the staff at LeaseGuide.com.