Leasing has played a big role in car sales for many years. Edmunds noted that vehicle leasing hit an all-time high in 2016, and they expect this form of financing to continue to grow in popularity. A decade ago, leasing wasn’t an option for buyers with bad credit. But as the economy picked up following the recession, more credit-challenged buyers have been offered the option of leasing a car. But once the lease is finished, what options do these buyers have?
To Buy or Not to Buy
What makes leasing attractive to car shoppers is the option to either turn in or buy the car at the end of the contract. If the buyout price set at the beginning of the leasing contract is within your price range, then this option could be even more appealing.
Over or Under Allowed Mileage
Leased vehicles always come with mileage limits. On average, leases generally cover three years with a maximum of 36,000 miles (unless you opt to buy more at the beginning). Keeping track of mileage can become stressful, and if you go over the limit, you’ll need to pay for those extra miles. If you drive less and don’t use those miles, then you’ve wasted that money.
Buying your leased vehicle cancels out those fees if you’re over mileage and may also remove the typical disposition fee (charged to prepare the car for resale) which generally ranges from $350 to $500.
Excess Wear and Tear
There’s no such thing as the perfect driver. Things happen to cars and, whether minor or not, any damage to your leased vehicle needs to be repaired. Buying the vehicle can remove the stress and aggravation of having to pay for repairs before giving it back to the leasing company (or getting charged for those repairs by the leasing company if you haven’t done them). In addition, you won’t be charged for any damage, and the car can be fixed on your own time and money — or not repaired at all.
Someone Wants to Buy it From You
If you want to avoid paying sales tax and sell the car to someone, there’s another way to do this. Instead of buying the car, contact the finance manager at a local dealership and ask for a “lease pass-through.” Simply put: the dealer buys the car from you and then immediately sells it to the person who wants to buy it.
You Simply Love the Car
If you end up falling in love with your leased vehicle, it might seem obvious to just buy it. Just make sure that the buyout price is a fair deal by checking out the retail price on sites like Edmunds.com and Kelley Blue Book.
Bottom Line
There are many reasons why you might want to buy your leased vehicle. Whether it’s because of money, or simply because it’s the right car, having the option to buy is there.
If you’re ready to lease or buy a vehicle, but bad credit is in your way, Auto Credit Express can help. We connect buyers with dealerships in their local areas who specialize in working with different types of challenging credit situations. To get started today, fill out our free and easy auto loan request form.
