Options for Car lease

What are your options when the car lease is up?

November 11, 2022 • 101 views
Author: PoonawallaFincorp Category: Auto Lease

Online car leases often last between two and five years. At the end of the lease period, the car might be returned to the leasing company. So, it's important to be aware of your alternatives as your automobile lease expires and how to get ready for it. Several options for car lease include:

  • choosing to turn in the leased car,
  • buying a now-used car, or
  • trading it for another car at your leasing company.

 Let us go over your choices and what you may do after your auto lease expires. Read on to learn more.

What is a car lease?

It is a popular type of auto financing which allows individuals to rent a car for a certain amount of time or miles. The lessee will be liable for monthly lease payments; in return, the leasing company will allow them to drive the car. It is necessary to have a good credit score for an online car lease.

Things you can do when your car lease ends

Amongst the great benefits of leasing a car is a wide range of options for a car lease when your lease is about to end. Following are your options:

Walk Away from The Car

If you want to walk away from the vehicle when the term ends, you will be liable to pay for the wear and tear and the disposition fees. You may have to pay for the mileage charges if you exceed the allowable mileage limits.

Extend Your Lease

If you want to replace your leased car but cannot find an appropriate vehicle, you can choose to extend your term for up to 6-months. You can connect with your leasing company to check whether this option is accessible or not. When extending the lease, keep in mind that it will also extend the miles allowed and reduce the buyout number making it one of the appropriate options for a car lease.

Use The Car for Trade-In

This option provides you with the chance to buy a different model and make. You can also avoid paying additional charges for the disposition, mileage, or wear and tear charges.

Sell Your Leased Car To the Highest Bidder

Thanks to the current vehicle shortage, your leased vehicle may be worth more than the price you would pay to purchase it. Although you don't own your leased vehicle, some manufacturers allow lessees to transfer your option to purchase the vehicle to someone else.

Purchase The Leased Car

You can consider purchasing the leased vehicle if you don't want to extend the term or purchase a new car. It is known as the lease buyout. The buyout price is stated in the contract and based on the car's residual value. When you purchase the car, use the car valuation resources to find out about the vehicle's value.

After finding out the car's worth, do not forget to negotiate the buyout price with your company. Suppose you have leased your car through a leasing company, in that case, you won't have to go through the hassle of negotiation as leasing companies usually provide the best and most competitive market rates, which you cannot find anywhere else. 

Why Purchase the Leased Car?

Most people tend to go for the online car lease than buying a car for the following reasons:

  • To benefit from the lower EMIs for a new vehicle.
  • Change to the new car once every 2-3 years.
  • Write off the lease payment as a commercial expense.

Since the residual value is less than the car's worth, most lessees return to their car after three years and opt for the next lease agreement. However, buying the car when the lessee reaches the end will be a better option. In addition to the fact that you can buy the car for less than it's worth, the following are the benefits of a car lease purchase.

  • You Don't Want to Shop For Another Car: You can consider the lease term your test drive. You know how the car works and you are familiar with its features. If you like your leased car, you can buy it to avoid the hassle of car shopping.
  • Avoid Paying Fees: When leasing a car, the lessee will agree to maintain the car by following its maintenance schedule. They also agree not to go above the mileage cap during the term. The lessee will have to pay fees if they break those commitments. However, the lessee will not be liable to pay any of these fees if they purchase the leased vehicle.
  • You Don't Like Other Used or New Cars: The current car shortage has reduced the number of vehicles to buy. Moreover, the price will be significantly higher if you find a car according to your needs. It is another great reason to purchase the leased car, as the car you are currently driving is according to your needs. You can purchase it without breaking the bank.

What To Do Before Buying The Leased Car?

Give yourself time to look over the lease agreement and do the following to make a better decision:

Find The True Value

To learn whether you want to keep the leased car, do not forget to find the vehicle's true value. Several companies offer an accurate report on the vehicle's true value.

Find The Residual Value

Ensure that you thoroughly review the lease contract and pay attention to the vehicle's residual value. It is the amount the lessee will have to pay if they choose to purchase the leased car after the term. It is critical to consider the additional taxes and fees that car buyers may have to pay to purchase the leased vehicle.

Conclusion

There are many benefits of a car lease that can prove to be helpful for you in the long run. However, you must consider your budget and choose the best leasing company when leasing a car.

Poonawalla Fincorp is a leading car leasing company. Lease a vehicle from Poonawalla Fincorp and you will get affordable leasing solutions and the best vehicle that fulfils your requirements. Our car lease services are customized according to our customer's needs.

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