So your car lease is up, and you’re not sure what to do.
Generally, you have three options:
- You can walk away with a termination fee plus pay anything else for wear and tear.
- You can trade it in.
- You can purchase it for the residual value listed on the original contract.
The number one thing to do before making your decision is to check your lease equity. You do this by finding out its true value. You want to know if it’s worth more at lease-end than the original buyout price. Most people never take the time to do this and lose money that could go towards their next car.
If it’s worth more, you’ll want to use your leased vehicle as a trade-in and you’ll also avoid turn in fees.
If it’s worth less than the buyout price you’ll want to walk away and pay the termination and wear and tear fees.
The other option is to buy it. That’s also where knowing the car’s true value is crucial. It ensures you don’t overpay. If you are only paying slightly more than the current value, it is probably worth it just to know the history of the car, but to grossly overpay for your own car defeats one of the real benefits of leasing.
For more on lease-end equity check out our article here.
Photo Copyright: shutter_o/Shutterstock.com