Sometimes the best car deal on the market is the vehicle already in the driveway. When a lease is about to expire, car shoppers have many lease end options. They can decide to purchase a new car, lease another new car, buy a used car or buy out the current lease. Although it is always good to evaluate all auto deals currently available on the market for lease or purchase, deciding to do a car lease buyout is often a very good decision.
When deciding to purchase a vehicle at lease end, the car lease buyout process can be very easy and straightforward.
Understanding Lease End Options
Before moving forward with a lease purchase, it is important to fully understand the options a lessee is entitled to at lease end.
Return the car. If the leased car is no longer desired at lease end it simply gets returned. There may be some fees associated with the returned vehicle for any mileage over the agreed amount or any damages incurred. The car is typically returned to a local dealer or another location as indicated by the financing company responsible for the lease.Purchase the car. Also known as a car lease buyout, the lessee can purchase their current car at the residual value listed in the original car lease agreement. Since the vehicle price is already pre-determined there is no negotiation of price with a car lease buyout.Steps to Purchase a Leased Car
Although every lender and car dealer is different, here is a general guide to consider when reviewing the steps for purchasing a car lease.
Review price Car shoppers should first carefully compare the car lease buyout price with other available car lease or purchase prices on the market. A lease purchase price may not always be the best car deal on the market.Contact the finance company. Car dealers will likely be contacting lessees as a lease end approaches, however it is best to first review procedures with the finance company holding the car lease. The final buyout price of the lease will be confirmed by the finance company and should correspond with the price on the original lease agreement.Determine financing options. A car purchased at lease end can be bought as an outright purchase with cash or it can be financed at a low monthly cost. If financed, the new monthly car payment will most likely be much less than a new car purchase payment (or in many cases, a new car lease payment).Choose bank or dealer. The final lease buyout can be completed through a bank or local car dealer. Based on the experience and expertise of auto dealers, it may be easier to deal directly with a car dealer to complete the sale. A dealer sometimes requires a final inspection of the vehicle as a safety precaution during the sale.Final paperwork. After confirming mileage on the car (for sale purposes), final paperwork for the car title and sale agreement will be completed. A copy of the car title will be sent to the new owner shortly after processing.Advantages of Purchasing a Leased Car
Car buyers can feel confident that the decision to purchase a car lease at lease end can very practical and make a lot of financial sense. By purchasing a lease end car, there are no surprises with the car history or performance. There is also less upfront cost with a car lease buyout then a new car purchase. Best of all, as car needs change in the future the car owner that decides to purchase or lease another vehicle the car owner now has equity in a vehicle to use for a new car down payment.
Read Car Lease Buyout Options for more information on options at the end of a car lease.