Navigating the End of Your Vehicle Lease: What Are Your Options?
Download MP3Overview: If your car lease is about to end, here are three options to consider for disposing of the vehicle. Every lease is different, but these general guidelines can help you decide the best choice.
Option 1: Return the Car to the Dealer
- Drop off the keys and walk away if you're under the maximum mileage and there is no major wear or damage.
- Important: You might be walking away from hundreds or thousands of dollars in equity that you didn't know you had—dealers may not always inform you about this.
Option 2: Trade the Car for a New Vehicle
- Caution: Understand the difference between a trade-in and a turn-in.
- Leases offer a fixed price to buy your car at the end of the term, based on projected depreciation.
- What’s changed: Vehicle prices have surged in recent years, and your car may now be worth more than the original buyout price.
- If your car is worth more than the buyout price (e.g., a $30,000 car that’s worth $20,000), you can:
- Buy it for the lower price and sell it for a profit.
- Trade it in, but make sure to get the equity applied towards your new car purchase.
- Important: Ensure the dealer applies any equity from your current car towards your new car, or you may lose out on that value.
Option 3: Buy the Car
- Advantages:
- You get a used car with a known history—no surprises.
- If you’re over on mileage or there’s damage, it doesn't matter when you buy the car.
- Buying the car locks in the price, even if the market value is higher.
- Things to Watch Out For:
- Some leases require you to buy the car before reselling it.
- Watch for any disposition fees (e.g., $200-$300) that may be included in the contract.
- Some dealers may try to mark up prices for certification or repairs—check your contract to ensure these fees are not added later.
- If you buy the car, make sure the title is transferred from the leasing company to your name.
Additional Tips:
- Start the process early—don’t wait until the last minute.
- Consider financing options carefully—dealers may offer higher rates than your bank or credit union.
- Make sure you get the title transferred immediately to avoid future hassle.
- Have questions about your lease turn-in? Leave us a message in the comments. This could be a great way to score a fantastic deal on your car, especially if you're aware of all the options available!
