Option : Purchase The Car
Some people choose to purchase the vehicle at the end of the lease. While its not always recommended, there are reasons people do enact the option to buy a car when their lease ends.
For example, lets say you leased a Volkswagen Jetta three years ago and the purchase option at the end of the lease is $9,500. You might have an extremely difficult time finding a quality three-year-old vehicle for that price. It may still have a warranty left on it, too. It might be the perfect vehicle for a child or grandchild thats new to driving and at an affordable price.
When you purchase the vehicle, you will also have to pay a fee. Just like the turn-in fee, initiating a purchase of your leased vehicle will trigger a one-time fee between $300 and $400. The fee will be listed in the agreement you signed at the start of your lease, but its easy to forget about it three years later.
Its a good idea to go through the inspection process before you purchase the vehicle in the same way you would if you were planning to turn it in. This can provide you with an understanding of any flaws that might diminish the value or help you make a better decision about whether to turn it in or go ahead and buy it.
When you go to purchase the vehicle, one thing you should know is that you dont need to use the dealership or the same bank to purchase it. You can get a car loan wherever you want at the financial institution or lender of your choice or you can pay cash.
What Happens If You Have Damaged The Lease Car
The leasing company doesnt expect you to return the car in a brand-new condition after driving it for 36 months. That is why the lease contract document has a measure for the tear, wear and damage conditions and guidelines.
However, that notwithstanding, you need to keep the car in good shape ideally, closer to its original condition.
Damage includes such thing as:
- Dents and scratches
- Missing keys, documents or service history
- Minor-looking windscreen chips
If you have damaged the lease car, two thing can happen:
Note:
If you wait for the latter, you will be charged. The leasing company will inspect the car and have the damages fixed, but youll pay for the damage costs. If you get the car repaired before handing it over, youll choose the garage , which can be cheaper.
Summary: What Happens At The End Of A Car Lease
You have three options:
- Lease a different vehicle
- Turn in the keys and walk away
The content on this site is offered only as a public service to the web community and does not constitute solicitation or provision of legal advice. This site should not be used as a substitute for obtaining legal advice from an insurance company or an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter. The comments and opinions expressed on this site are of the individual author and may not reflect the opinions of the insurance company or any individual attorney.
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Give Back What You Got
Remember to locate all the things that came with the car and bring them to the lease turn-in. For example, many people forget to bring the second set of keys they received when they leased the vehicle. Other pieces to return include tonneau covers, the original floor mats, spare tires, and even third-row seats that were perhaps removed and stored in the garage.
If Your Lease Is Almost Over You May Have The Option Of Buying The Leased Car Considering The Car Market Today This May Be A Smart Money Move
If your car lease is nearly over, you may be wondering what to do next. Should you return it and lease a brand new car? Should you purchase a car outright? Or should you buy the car that youve been leasing for the last few years?
There are many things to consider. This article will help you ask the right questions to make the best choice for your finances.
Should I buy my leased car? And what are my other options?
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What If I Want To Lease Another Car From The Same Company
Then do so. Every company loves a returning customer and leasing companies are no different. If you arrange the new lease before the current one expires, any company worth its salt should be able to have the person collecting your current car arrive with the new car.
If in doubt assume nothing. If you unsure about anything regarding when and how your lease car will be returned, you should always refer to your lease contract and/or get in touch with the leasing company. Make sure you tell them if you need to change the collection time/location, as well.
If you wish to dispute any penalty charges, you should take the matter up with the leasing company in the first instance. If they fail or refuse to resolve the matter to your satisfaction, or you believe they are acting unreasonably, contact the BVLRA.
If you treat the car well and prepare properly, the returning process should be seamless and painless.
Check out our other leasing guides for more information:
If The Fair Market Value Exceeds The Buyout Price
The fair market value of your car is based on the make, model, features, condition and mileage. If you babied your vehicle, kept it in pristine condition and drove under your yearly mileage limit, then your car might be worth more than the buyout price.
To determine what your car is worth, get an appraisal when your lease is about to end. You can do this for free using Kelley Blue Book.
In doing so, you may discover that you could profit by purchasing your lease, then reselling the vehicle privately .
When considering this option, dont forget to factor in the cost of buyout fees and taxes youd be responsible for. Its also a good idea to know how your make and model holds its value.
Even if you dont plan on flipping the car, if the lease buyout is less than the fair market value, youll still walk away with a killer deal on a used car.
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Here’s What Happens When You Lease A Car
First up how do car leases work?
Think of your car lease as a long term rental. You do not own the car, but instead pay to use the car. The company that owns the car will draw up a lease agreement that outlines all of the conditions of your lease. Car leases will typically outline the following:
In addition to these nitty gritty details, there will be limitations and restrictions outlined in your lease agreement. These will vary greatly from lease to lease, but they will most likely include the following:
- Customization to the car. Since you dont own the car, you cannot customize it however you would like. This means no custom paint job, no window tinting, no new stereo system. You must purchase the car to make it your own.
- Maintenance. You are responsible for the upkeep of the car. There will be a section of the lease that reviews exactly what you are responsible for maintaining. Oftentimes leases will cover routine maintenance, such as oil changes, and fix normal wear and tear issues. But this will vary from lease to lease.
- Excessive wear. Your car lease will outline what is considered normal wear and tear and what is considered excessive. If they deem there has been excessive wear and tear on your car, you may be responsible for extra fees.
You Want To Avoid The Hassle Of Car Shopping
Although the internet has somewhat streamlined the process, shopping for a new ride can be exhausting. Unless you love the thrill of the hunt, you may want to just take the course of least resistance and buy the leased car. This is particularly true if you like the car. End-of-lease dealmaking with a lender is generally quicker and easier than starting from scratch with a new car.
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Car Lease Ending Soon Another One May Not Be Your Best Option
- Inventory at dealer lots remains limited amid a global chip shortage.
- The average time a new vehicle sits on a dealer lot before being sold is 26 days, compared with 62 days before the pandemic hit.
- Your car may be worth more than anticipated at the start of your lease when the residual value was pre-determined.
If you’re nearing the end of your car lease, don’t assume another one is your best option this time around.
While many consumers go from lease to lease which puts them in a new vehicle every few years the pandemic has upended the auto industry. This generally means the calculus has changed for whether another lease makes sense, experts say.
For starters, “the ability to get access to the car you want quickly isn’t there,” said Pat Ryan, founder and CEO of car-shopping app CoPilot. “You might be waiting three to six months for it.”
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An ongoing global shortage of microchips key components needed for today’s autos to operate that began last year continues to impede manufacturers’ production of new vehicles, which has translated into demand outpacing supply.
The average time a new vehicle sits on a dealer lot before being sold is 26 days, according to a forecast from J.D. Power and LMC Automotive. Two years ago before the pandemic hit it was 62 days. An estimated 54% of vehicles were sold within 10 days of arriving at dealerships in October.
Acceptable Wear And Tear
So, what constitutes fair? Within the guidelines these common wear and tear problems are considered as such and wont be met by with a bill at the end of your deal:
- Small dents .
- Scratches and abrasions , as long as the bare metal isnt showing.
- Light scratching on windscreen is acceptable if it doesnt interfere with drivers vision.
- Tyres with more than 1.6mm of tread.
- Scratches on sills, seals and treads that reflect normal use.
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How Do Car Leases Work
A car lease allows you to drive a vehicle from a dealership for an agreed upon amount of time and miles, and pay for its usage rather than for the full purchase price of the vehicle.
You make monthly payments to be able to drive the car. The monthly payments are based on the cars projected depreciation value over the course of lease term.
A car lease from Proctor Honda ranges from 2 – 5 years in length, and is measured in months .
Shorter term leases may be available through subleasing websites, but are not available through the dealership. The most common terms for a car lease are 2-3 years. A major benefit to 2-3 year leases is that the vehicle warranty is normally for 36k miles or 3 years, meaning that there is little risk for out-of-pocket repair during the lease.
At the end of the lease, you will return your vehicle to the dealership where it will be inspected. The dealership will make sure that the lease did not exceed its mileage limit and that there is not excessive wear and tear to the vehicle.
Many people get nervous that they will be charged for every scratch or ding on the vehicle, but keep in mind that the dealership is expecting your car to have 3 years worth of wear and tear from normal use over the course of a 36- month lease.
Depending on the type of lease, there are three options when the lease is over:
***When you return your lease to the dealership, dont forget to also bring in any extra keys and floor mats that came with the vehicle.
I Have Exceeded My Mileage Limit
Unfortunately, there really is not any excuse for doing this the limit should be burned into your brain. Exceed the limit and you will incur penalty charges. Depending on the leasing company, it could be a few pence per mile, or as much as a whole pound. Going a long way over could easily cost thousands.
As with damage, exceeding the mileage limit reduces the cars value and it falls to you to bridge the gap. On top of the penalty charge itself.
If you have underestimated the mileage you will cover, you should immediately inform the leasing company. Any reasonable company should be willing to increase your mileage limit but that will, of course, increase your monthly payments. If you unsure about how to proceed, you should contact the BVRLA.
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Can I Extend My Lease With Gm Financial
One-month lease extension: If you are unable or choose not to return your vehicle, we will process a one-month extension to allow you additional time. No need to contact us if we dont hear from you 10 days after your original termination date, we will automatically extend your lease for one month.
About Consumer Protection Bc
We are responsible for regulating specific industries and certain consumer transactions in British Columbia. If your concern is captured under the laws we enforce, we will use the tools at our disposal to assist you. If we cant help you directly, we will be happy to provide you with as much information as possible. Depending on your concern, another organization may be the ones to speak to other times, court or legal assistance may be the best option. Explore our website at www.consumerprotectionbc.ca.
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Get Inspected: Plan Ahead
Schedule a pre-return inspection within 120 days of lease end for a report on wear and also how much you might owe at lease end.
Finish your lease confidently by knowing the condition of your vehicle with a convenient inspection that can be done at the dealership, your home or even your office.
If you have questions before you schedule your pre-return inspection or need other lease-end information, you can call us at , or you can text LEASE to 53721 .
Returning A Leased Car And Walking Away
There are plenty of reasons you might not want to start another lease upon turning in your vehicle. Maybe it was a second car and now youâve decided to downsize your household to one, or you want to buy a new car and plan on taking some time to shop around. But youâll have to pay out all the fees that might be waived if you were signing onto a new lease right away.
Be prepared to pay the disposition fee in full, as well as any fees for excessive wear and tear for going over the mileage limits set in your lease. If you return your car after the termination date on your lease, youâll also have to pay late fees. But once youâre all settled up, youâre free to walk away.
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Review Assess And Repair
Your first step is to review your lease agreement for a refresher on what youve agreed to deliver at the end of the car lease. Did you purchase additional coverage, such as an excess wear and use protection plan that many leasing companies now offer? Having answers to questions like this will help to determine whether you should consider scheduling a pre-inspection before the official inspection conducted at the end of a car lease, to give you time to fix any damage that might be outside of the manufacturers definition of normal wear and tear.
The second step is to critically assess the cosmetic appearance of your leased vehicle. Subjective terms like normal wear and tear can cause confusion one persons interpretation of a minor ding or scratch might not match the leasing companys expectation of the same. Some manufacturers have sections on their websites that answer questions about what they consider to be excessive wear and tear.
Scratches in the finish that are deep, such as those that go through the cars clear coat, large dings or dents on the body or bumpers, and tears and stains on the vehicles upholstery will fall outside of what is considered normal wear and tear for most manufacturers.
Most manufacturers contract with independent third-party inspection services to conduct the return inspection. You wont have to pay for the inspection that cost is covered by the manufacturer.
Returning A Leased Car: The Complete Guide
Want the best deal on your new car? Moneyshake saves you time and money, simplifying your search for a brand-new vehicle.
Ever wondered what happens when you return a lease car? For starters, The British Vehicle Rental and Leasing Association recommend that you inspect your lease car 10-12 weeks before you hand the keys back to the provider. But how does collection of your vehicle work? And do you have to be home when it all takes place?
Read our complete guide and learn how not to come unstuck at the end of your agreement.
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Which Option Is Right For Me
It depends on how much time you have and your personal preferences. Selling or trading in your lease at a dealership can sometimes get you a good deal and is a relatively hands-off experience.
Swapping your lease or selling the car to a private party can sometimes get you an even better deal, though it involves more work. And if you dont want to drive, you dont have to do anything at all.
