The Lease is Up; Should You Buy the Car?
June 24, 2021
If your vehicle lease is coming to an end, you will soon have the option to end the lease, trade it in, or buy it out. There are situations when buying out your lease makes financial sense. Here are a few items to consider when determining if you want to buy your leased vehicle.
Check the mileage.
With most lease contracts, you have the car for three years and can use up to 36,000 miles. Check your lease contract to see how many miles you paid for. If you're over on mileage, you'll likely owe money; if you're under, you may end up leaving money on the table. If you owe money, check out purchase options to determine if buying the car instead of paying mileage overage costs makes more sense for you and your finances.
Watch for excess wear and tear.
If your leased car has multiple scrapes, dings, or tears in the upholstery, there may be penalties applied when the lease ends. If you end up purchasing the car, you won’t have to worry about paying for damages, and you can fix the issues in your own time.
Negotiate a lower buyout price.
To negotiate a reduced buyout price, talk to a manager at the dealer’s finance company or with someone in the auto loan department at the financial institution through which you financed your lease.
Find another buyer.
You may decide to buy the car, and then sell it yourself. If you owe money on the lease, this might be a good option for you. You could sell it to a friend or a used vehicle retailer to recoup some or all of the funds owed.
You love the car.
If you love your leased car and don’t want the hassle of looking for another one, compare the buyout price you are offered to the retail price on Edmunds.com and Kelley Blue Book. If the buyout price is a good deal, you can send the lease holder a check. If not, see if you can negotiate a lower price based on your research.
MSUFCU offers new and used auto loans, refinancing, and auto leases with flexible terms and rates. And, you can get approved in as few as 20 minutes when applying by phone, live chat or visiting a branch. For more information, visit msufcu.org/vehicleloans.
Tags: Buying a Car, Borrowing Money, Budgeting