Is it Better to Turn a Lease In or Buy a Lease Out?

Leasing a car is a great option for those who like to have new cars but who don’t want to be stuck financing one. Leasing gives you the flexibility to move on to a new car if you don’t like the one you’re driving when the lease is up. But leasing does come with some extra requirements you don’t get when financing a car, such as keeping your mileage under a certain threshold or sticking to a set maintenance schedule or facing penalties.

Lease terms are usually for a couple of years, and when the term is up, you can either turn in the car and pay whatever fees are required or you can buy the car. Here’s what you need to know to help you make the decision:

Why You Might Want to Turn a Lease In

One of the most common reasons that people turn in their leases is that the car no longer works for them. Maybe they leased a sleek sports car when they were single and swimming in money, but now they are expecting a new baby and need more room and a lower payment. They don’t want to keep leasing the car, so they turn it in to lease or buy a new one.

When your lease it up, you also need to think about what your expenses will be. Are you over the mileage? Is there damage to the vehicle? If these costs will be low, you might want to turn in the lease. If you’re looking at excessive fees, you might consider renewing the lease or buying it out instead.

Why You Might Want to Buy a Lease Out

At the end of the lease, the value of the car will be determined by a number of factors set out in the lease, as well the mileage and condition of the vehicle. If you want to buy a vehicle before the lease is up, for example, you will have to factor in your remaining payments.

Typically, you can get a good deal on buying a vehicle after you lease it. The market for leasing is tightening, so the manufacturers have an incentive to sell you the vehicle. If they try to lease it, they may not get the customers or the payments they want, and if they have to auction, they will almost certainly do so at a loss.

Research the value of the vehicle, and offer the bank or manufacturer the amount that’s closest to the wholesale value. Don’t be afraid to negotiate, and keep pushing to talk to the person who can actually make the decision to accept your offer.

Which is Right for You?

Making the decision to turn in your lease or to buy it out will depend on your financial situation and what you want in a vehicle. You need to carefully consider all the expenses involved in each decision to determine which will be best for you – as well as whether you actually want to keep the car or not!