Buying the leased car you've been driving after your lease is up can make a lot of sense in some cases. As your lease term draws to a close, the leasing company expects you weigh your options between walking away and buying your leased vehicle. In fact, the leasing company is likely to call you one to two months before the end of your lease to see how you're feeling about it.
As Your Lease Term Closes
So, how do you know if you should buy your leased car? Sometimes, the answer is obvious if you love the vehicle you're driving and don't want to give it up. But, in other cases, the decision to buyout your lease isn't as clear.
Between 30 and 90 days before the end of your lease, the lessor typically calls you to let you know your lease is coming to a close. They may offer you other lease deals, and ask you questions about the car, and how you're feeling now that the lease is nearly complete.
Another thing that your lessor does during this call is set up a time for your end of lease inspection. This is when your vehicle is inspected, often by an independent third party, to assess the condition of the car you've been driving. The cost of any repairs is estimated at this time, and you get a condition report that tells you if there's damage beyond normal wear and tear.
According to Edmunds, manufacturers generally look for damage in the following areas:
- Exterior dents, dings, scratches, and scrapes
- Bumpers and wheels
- Cracks, chips, and excessive pitting in the windshield and windows
- Abnormal or excessive tire wear
- Upholstery tears or stains that can't be cleaned or repaired
Having too many of these issues could cost you big time – if you choose to walk away from your lease, that is. You won’t have to pay repair costs if you purchase the vehicle.
Reasons to Buyout Your Lease
There are several reasons why you may want to buy your leased car:
A vehicle with excess wear and tear may be worth buying in the end. Sometimes, it’s more cost effective than paying to repair damages. If the wear and tear on your leased car is any indication of how you treat your vehicles, you’re likely going to save money by buying the car at lease end, rather than paying excessive wear and tear charges every time you lease.
Even if the wear and tear doesn't get you, excessive mileage can certainly up the cost of a lease fast. What you're expected to pay may vary by lease company, but it can be as much as 25 cents a mile. This can add up fast – $250 for every 1,000 miles over your contract limit at that rate. But, again, these over-mileage fees can be avoided if you chose to buy.
When you lease a vehicle, your monthly payment is based on a number of things, but one of them is an estimate of how much the car is going to be worth at the end of the lease term. This is known as the residual value. It's subtracted from the sales price of a new vehicle, and then the remainder is divided by the number of months in your lease term.
Sometimes, residual values get set incorrectly – too high and your monthly payments end up being less than they should be, too low and your car's worth more than the lessor thought it would be at lease end. If the vehicle is worth more, you come out ahead by buying it for less than it's worth.
The Bottom Line
As you can see, there are several reasons to lease a car and then buy it. But, if the vehicle you leased wasn't the one for you, and you're looking for something a little more permanent this time around, you've come to the right place. Here at Auto Credit Express, we help thousands of people get into the cars they need every year. With our nationwide network of dealers, and our fast, free, and no-obligation auto loan request form at your fingertips, we can get the process of finding you a local dealership started!
