What You Need to Know About a Lease Buy Out


365 Days: Day 63
Image by ~John~via Flickr

 

When your car lease is up you have two options available to you:

1. You can decide to give the car back and get into another vehicle.

2. You can decide to do a lease buy out instead where you are planning on keeping the car.

Before you make the hard-fast decision about  a lease buy out, read through this so that you know what to expect and do you homework!

What Is The Lease Buy Out?

When you initially signed the lease contract you were provided with the lease buy out value … what you would have to pay for the  car if you decided to keep the vehicle. Keep in mind that the value is before tax and also keep in mind that the lease buy out value is NOT negotiable. The price is the price. It doesn’t matter if this is your “x” number of vehicle with the brand, the price is the price.

What Is The Current Market Value?

One way to determine if the lease buy out value is worth it or not is to have the vehicle appraised. You already know what you have to pay for the car, so find out what it is actually worth in today’s market dollars and see if it is worth it. If you are paying more for the car than what it is actually worth, then my question to you would be “why?” Give that car back and get into something else!

Some people will consider a lease buy out because they have a ton of excess kms or excess damage and they don’t want to pay. Again, before you do that check with the Dealership. Many people I have dealt with, these are typically two of the main reasons why they are going to buy out their lease. In a lot of these situations I have been able to help them with the excess kms or damage charges, give the car back and get into a new car for not much more than what they were paying initially. It might not always be the case, but you know … it certainly is worth trying first.

What Is The Lease Buy Out Process?

If you do decide to go through a lease buy out, then this is the process:

1. Visit your Leasing Manager and let them know what you are doing
2. If you are wanting to finance the lease buy out then your Leasing Manager will have you fill out a credit application and get the approval for you. (Keep in mind that this vehicle is now considered a used car and the rates will be different than they are for new).
3. You are responsible for getting a Safety Inspection and E-Test done. Once that is completed give that paperwork to your Leasing Manager so that they can get the ownership transferred. (There is a change of ownership, from the Leasing Company to you)
4. You will need to let your Car Insurance Company know of the change as well so they can update the information on the policy
5. You’ll make an appointment with the Leasing Manager to finish off the transaction and sign the paperwork.

The process is pretty straight forward once you decide which way to go. Again, find out what alternatives you have to a lease buy out, especially if you fall into the situation of excess kms and/or damage. See what the Dealership can do for you, in terms of helping you go for a new vehicle as opposed to a lease buy out.

 

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