Your Car Lease is Up. Now What?
One of the benefits of leasing your vehicle is the flexibility it offers at the end of the lease term. As a lessee, you can choose to buy out your current leased vehicle, lease another car (either from the same brand or try something new), or simply return the car and walk away. However, the lease end process can be confusing and costly. To make a considered choice, research the answers to the following end-of-lease questions:
- What charges may be due at lease end?
- Is buying the leased vehicle a good option?
- What do you want to drive next?
To make your lease end transition easier, Newsday Brand360 and Huntington Toyota offer the following lease-end options to consider.
1. Re-Read Your Lease
45 to 60 days before the end of your lease re-read your agreement to be clear on the options available to you, and to familiarize yourself with your leaser’s conditions for return. Next, research the market to determine the residual value of your car at the time of termination. You will likely start receiving letters from your dealership prior to your lease termination date with offers to end your lease early and upgrade to a new vehicle, extend your lease, or to offer you a buyout option to purchase the car at the conclusion of your term. Your dealership will also remind you to set up an appointment for inspection of your car.
2. Lease Return Inspection
Many manufacturers use an independent company to conduct a lease return inspection that is free to the lease holder. The inspector can come to your home or office and the process will take about 30-45 minutes. In preparation for the visit, remove all personal items and wash and vacuum the car. After the inspection, you will receive a condition report that lists any issues and the estimated costs for any repair. Toyota Financial Services offers a lease turn-in site that includes a sample inspection report to help you prepare.
3. Check Your Mileage
Leases come with a pre-set mileage allowance per year. Be sure to return your vehicle with less than the allotted mileage to avoid overage charges. If your mileage is over your allowed amount you will pay a mileage penalty at the end of the lease, or you may opt to purchase the vehicle at the end of the lease, instead.
4. Wear and Tear
In order to avoid extra charges, return your vehicle in good condition. Any damage to the car that’s going to cost more than the average amount of money to refurbish is called excessive wear and tear. Damage includes dents, dings, scratches and scrapes on the car’s exterior, cracks, stars or excessive pitting on the windshield, abnormal or excessive wear to the tires and tears and stains on upholstery.
5. Late Charges
Your leased vehicle must be returned to the dealer by the termination date on your leasing contract. You can bring it to your local dealer or any dealer of the same automotive brand. If you return the vehicle after the date of termination, penalty fees will start to accrue.
6. Disposition
When you return your leased car, you will be subject to a disposition fee in an amount specified in your contract. Your dealership may be able to waive this fee if you lease another vehicle.
7. Turn-In Returns
Locate all the items that came with the car originally such as the second set of keys, cargo covers, original floor mats and spare tires.
What Next?
At the typical end of a car lease, you have the option to return your vehicle and walk away, extend your lease for a limited time (usually at the same monthly rate), purchase your vehicle for the buyout value set in the lease, or trade in your vehicle for a new lease.
If you decide to lease another vehicle you can take advantage of driving a newer car while maintaining a low monthly payment.
Lease (or Buy) Another Vehicle from the Same Brand
Many manufacturers will incentivize returning lessees to choose another vehicle from their brand. In addition to financial incentives such as loyalty rebates, some will waive the last few lease payments to help clients get into the newer model before their lease is over.
Lease (or Buy) Another Vehicle from a Different Brand
Part of the fun of leasing can be the flexibility to drive a different car every few years. Some manufacturers will even offer rebates to current lessees of competing brands. These can make trying a new brand easier.
Return the Car and Walk Away
Of course, you are under no obligation to lease or buy another vehicle unless you wish to. If you no longer need the car, you can simply return it and walk away. For more information on end of lease options, contact Huntington Toyota by visiting www.toyotaofhuntington.com