On the Car Pro Show, we always get a lot of calls about what to do at the end of a car lease. To help you figure out whatís best for you, I recently put together some easy to understand tips on what to do at the end of a lease.
Start Your Research About 90 Days Before Your Lease Is Up
As you approach the end of a lease, at about 90 days from the end, that is the time to get your lease contract out and look it over. Odds are you havenít looked at it in a long time. Look for the residual value, sometimes called the lease-end value. This is one of two very important numbers you need. The residual value is the amount you can purchase the vehicle for at the end of a lease, and that number is set in stone. Although you may have no intentions of buying your leased vehicle, you still need to know this number to determine if you have equity.
You Only Have Three Options at Lease End
Equity? Every time I mention you could have equity in a leased vehicle, people are amazed and confused. Those who got into the habit of turning in their old keys and getting a new lease often never check for equity. At the end of a lease, you have three options:
Walk away from the lease: Youíll owe a disposition fee, mileage charges if applicable, and any wear and tear charges.
Trade the vehicle in: You can trade it in anywhere for any make and model you wish, you are not tied to the dealer you leased from. By trading, you avoid the disposition fee, mileage charges, and wear and tear.
Purchase the vehicle: You have the first right of refusal to purchase your leased vehicle for the residual value. If you do not purchase it, the dealership has the next opportunity, and if it does not purchase it, the lease company gets it back and sends it to auction. Like trading your vehicle in, if you purchase your leased car, there are no fees or charging, unless you are in Texas, which charges sales tax on the purchase of your leased car.
Find Out The True Value Of Your Leased Car
The second important number you need is a true value. Unfortunately, finding a true value is not easy to do, and it is impossible to do online. None of the trade-in values online are accurate, especially on vehicles that are only 2-3 years old. The values online are often too high, but I see many cases where the values are extremely low. Either case can skew your decision-making process at the end of a lease. If youíve listened to my radio show for any amount of time, youíve heard me say ďa car is only worth what someone is willing to write a check forĒ. The P.S. to that is Kelly Blue Book, Edmunds, and the others donít write checks.
So how do you actually find out what your leased car is worth? You get an offer from a dealer. It can be a new car dealership, every one of them buys cars, but the trick is talking to the used car manager. If you talk to a salesperson, youíll end up getting a trade allowance, which can be manipulated. When you speak to the used car manager, just ask him should you decide to sell it, what would he pay for it?
In most markets, there are large used car dealers who advertise they want to buy cars and have an easy process for making you an offer. CarMax is the largest in the country, but there are many others who pay top dollar.
I Have The Two Important Numbers Ė Now What?
Now that we have the two important numbers (the residual value and the true value) it is decision time to figure out which of the three options above is the smartest. Letís use three examples:
You found a dealer ready to write a check for $20,000 for your leased car. The residual value is $18,000. You have $2000 in true equity that belongs to you. You can trade the car in and use the $2000 to reduce the next payment, whether you buy or lease, or you can take your leased car to the dealership that was high bidder, it will pay it off and write you a check for $2000 that you can do with as you wish. Remember, in both these scenarios, you owe nothing further to the lease company.
The opposite numbers apply. The residual value is $20,000 and the best offer youíve gotten is $18,000. This is when we walk away. Factor in the disposition fees, wear and tear, and any mileage charges.
The real value and the residual value are the same, both $18,000, for instance. Then youíll want to trade the car or sell it to a dealer to avoid the end of lease charges.
If you love your leased car and just donít want to part with it, thatís OK, but you still want to go through finding the true value. There is no reason to way overpay for your own car. I think it is reasonable to pay a little more for your own car since you know the history of it.
Iíve told the story on the air several times, but a personal friend of mine who is on a cycle of leasing was about to walk away from a low mileage Cadillac Escalade. She was just going to turn the Cadillac in where she leased it, and then lease an Infiniti. I made her go through the process above, and she had $9000 in equity she pocketed.
Will everyone have equity? No, there are many factors including what is going on in your market. For instance, cars coming off lease in South Texas right now are bringing huge money due to the hurricane (assuming your lease car was not flooded). There will be a ton of leases ending there soon with equity. Discontinued cars will not often provide equity, and convertibles in the dead of winter probably will not have equity. Every case is different.
No matter what kind of vehicle you have, or where you are located, you should want to know where you stand before ending your lease.
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Hi, I have a 2018 dodge challenger hellcat fully equipped. Manufacture Value was at about 74000 when i first leased it. I felt that i got a great deal, getting my payments for 743 a month for 36 months. which equals 26,777.16. KBB current Value is about 45000. Hopefully, it can drop another 7000 from here to the moment i have to decide. comparing to last years model of course. The part i get lost is what does it mean 26000 plus lets say 4000 equals only 66000, which is 8000 below. Am i winning or losing? I want to keep the car, cant see myself in another car but I can't afford to pay more than I already do. My insurance is finally dropping, which is a relieve. Everyone says a lease is the most expensive way to go but my math don't add up, it seams way cheaper to have leased it, which confuses me completely. If somehow the value drops to 40000, can i still make Chrysler drop the purchase price?
June 15, 2020 @ 2:45pm
The Car Pro
I am not sure I understand your question completely, but the number you need to focus on now is the residual value on your contract. That is what youíll pay for the car at the end of the lease. You can add the residual to the total of payments youíve made to get your total costs. Get your residual amount and call the show, we can discuss particulars.
May 23, 2020 @ 6:15pm
Currently, I am leasing a Mercedes CLA 250. Lease end is August 1st. Mileage is right on. I just got my DMV registration renewal and don't want to pay $500 then get rid of the car. I don't want to keep this car. Want to turn it in and walk away and get a little dependable Toyota. Unfortunately going through a divorce and don't think I can afford to purchase so may have to lease again.
1. If I take it back to Mercedes, I'll be dealing with repair costs for the wheel/curb damage. Their service center wants to charge me $200 per wheel prior to returning it, because they say finance department will charge more.
2. One Toyota dealer said they wouldn't even take a Mercedes on the lot.
I feel trapped and it's going to cost me to get out of this lease! I would appreciate any suggestions at all.
May 26, 2020 @ 1:55pm
The Car Pro
If you are going to walk away, it has to be done with a Mercedes dealer. Youíll have to get the wheels repaired, and youíll owe the disposition fee. If you turn it in early, youíll also have to pay the remaining payments that are due.
Iíd try to do a lease on a Toyota that would include enough cash back in your pocket to dump the Mercedes. This can be done. Not sure where you are, but use one of my Toyota dealers, theyíll do all they can to help.
May 17, 2020 @ 8:11pm
I only caught part of your program this weekend, but I heard you mention that cars may be in short supply this summer due to production being shut down.
I currently have a lease on a 2017 BMW M240i that will end on Aug. 21. I plan to purchase a small SUV like the Mercedes GLB / GLC or a Toyota RAV4.. The thing is, I pre-paid my lease so if I get a car now, I will literally be leaving money on the table. What is the smart move? If I decide to get a used car rather than a new one, would that impact the decision?
Thank you, Kathryn
May 18, 2020 @ 9:46am
The Car Pro
Thanks for listening. I agree, you want to get your money out of the current lease since you paid it already. I would hope inventories would be somewhat normal by August, but if not, ask BMW to give you a month to month extension on the current lease, theyíll likely do that.
May 12, 2020 @ 8:22pm
My wife and I each have a leased car from different dealerships, and the leases are in both of our names. Should one of us unexpectedly pass away, is there a process for returning one of the cars to the dealer, or is the surviving spouse responsible for honoring the terms of the lease?
Thank you, Greg
May 13, 2020 @ 12:33pm
The Car Pro
it can vary from state to state, but generally with a husband and wife both on a lease or a purchase for that matter, the surviving spouse is responsible for the remaining balance of the loan. I hope this helps.
May 11, 2020 @ 4:37pm
I recently sold my lease return to a local dealership in exchange for leasing a factory order. I'm currently free and clear on my lease return. I have been using a broker from a car buying service to facilitate this factory order. I just found out that the broker has submitted an incorrect option package on my order that I asked to be removed. The broker is very apologetic, and if I cancel the order it will push my delivery date back another 4 weeks to start a new order.
The dealer already promised to sell the factory order $1k below invoice at time of order. Because of this error, do you think it's possible to negotiate the price of the car minus the package I didnt ask for? This package adds $2300 to the price. My broker (who made the error) says that there would be no room to negotiate this off the total price because I'm already $1k under invoice and dealer would take a loss.
I'm willing to walk since I'm not liable for my lease return at this point. I did not pay a deposit for the order, so it's the dealership's risk.
How would you advise I leverage this error to my benefit? If dealer doesn't budge on the price, should I walk or ask for other accessories/oil changes etc.?
May 12, 2020 @ 11:19am
The Car Pro
The dealer did nothing wrong, why should they take a $2300 loss? Your broker was the one that screwed this up. Get the money from him or her OR walk away. Your broker wonít want you to do that of course because he or she is getting money from you AND the dealership both. Do you really think using a broker saves you any money OR time?
I do this for listeners across the country every day and donít take a dime. I assume you donít listen to my radio show or you would not have used a broker to begin with.
May 5, 2020 @ 4:31pm
Hey Jerry, I have a 2017 Mazda 6 lease that is coming to an end. I'm really happy with Mazda and am looking to stay with them and just upgrade to a new 6 or even see what they can do for me in a CX-5. However, the current lease has a good amount of dings and scratches on the sides and bumpers, and possibly some damage to the under carriage (ran over an unavoidable stray muffler that also took off a piece of the front wheel well.) I'm unsure of the actual damage costs but its beyond your standard "wear and tear", though during inspections and routine maintenances nothing was ever brought up by the mechanic. The car runs just fine, the interior is in pristine condition, and I'm about 4000 miles under my lease mileage even.
My question is, if I do decide to stay with Mazda, would I be on the hook for those damages even though I agree to a new lease with a new vehicle? I've run into similar costs in the past but figured that was because I went from Chevy to Mazda. By staying with the same leasing company and sat manufacturer, do they waive those damage costs? Work them into the new lease? What is it I should expect and discuss with the auto group when I go to look at the new lease ?
May 7, 2020 @ 10:42am
The Car Pro
Jeff, it really depends on the dollar amount of the damages that are visible. If the dealer is going to resell your current leased car, Iím sure they can work with you on the damage. If they are NOT going to resell it and it goes back to the lease company, youíll likely have to pay. I have good Mazda dealers all over that will work with you at my website.
May 1, 2020 @ 4:27am
Hi Jerry, As I understand it, our buy out at the end of our 2017 Toyota Camry lease is not negotiable. Our lease will be up in Sept., and we have only put a little over 15,000 miles on the car so far, and it is in good condition. Our buy out is 11,000. What would you do, and how would you arrange payments if you decide to buy the car. My husband is 82 and in ill health, and I am 75 with average health. We have a little nest egg, but owe some hospital bills, and at our age who knows what can happen. My husband is on dialysis, and does not drive any more. Any suggestions at all will help us decide what to do. Thanks a million, devinsqueenie
May 1, 2020 @ 11:12am
The Car Pro
If it were me, Iíd buy your current car. $11,000 is a real bargain for a 2017 Camry with low miles like your. The dealer you leased from can arrange for a loan to purchase the vehicle or if you have a bank or credit union you do business with, they can handle it too.
I wish you and your Husband the best with your health issues.
April 23, 2020 @ 5:07pm
Great information you have provided. I had a question, I have a 2017 Toyota RAV4 with 53000 miles on it.. the lease is up in 2 months but about $2000 over miles charges. Now if I decide to purchase it, does that $2000 get moved over to the purchase price and i will be financing this addition amount ?
I appreciate it !!
April 24, 2020 @ 11:42am
The Car Pro
You are not responsible for the mileage overage or any wear and tear if you purchase it, all you pay is the residual amount on the contracts and any applicable Tax, Title, and License.
March 23, 2020 @ 1:53pm
Have a lease ending on 25Mar (2 days) I have the preinspection done, and planning to walk away from the car, My issue is that Im having trouble locating a dealer that will accept the return during the current COVID-19 situation. The vehicle is leased through Chrysler, they have recommended a dealer that is a good +1 hour drive from my home. I've called a more local dealer, and they flat out refused to accept the return unless I lease or buy a new car from them (Is that allowed?). Im just looking for a little guidance here.
Appreciate your show and your input!
March 23, 2020 @ 10:09pm
The Car Pro
Trent, dealers can refuse lease turn-ins unless it is the original leasing dealer you got it from. The dealer FCA recommended is probably your best shot. These are unusual times with dealers working short staffed.
I wish I had better news.
March 4, 2020 @ 1:10pm
My lease is up in August, RV is $22,000 (I think...I need to double check my paperwork to be sure). I did the online estimate over 3 different sites and am getting a range from $18K all the way up to $25K. I know online isn't a for sure estimate, but it was close when I traded my purchased Jeep in 2015. If I am offered $18K, I would owe $4K on the RV, need a bigger size vehicle for a family of 6 (we were only a family of 3 when I leased it), would it be best just to trade it in and finance the $4K in with the loan of the newly purchased vehicle? I love my Jeep but it's not practical anymore, as we have to take 2 vehicles to do anything as a family. I would owe mileage (about 10,000 miles over) so I think the cheapest option would be to roll it into a financed vehicle. Thoughts?
March 5, 2020 @ 10:17pm
The Car Pro
Amanda you really need to nail down the value before deciding. $18-$25,000 is WAY too big a spread. The problem is it is too early right now. You should get actual OFFERS around the first of July. You need solid numbers on the value AND the residual before deciding.
Get those and holler back.
March 2, 2020 @ 8:31pm
My wife leased a Mercedes and kept it through the 3 year lease. When she leased it, Mercedes took care of registering the vehicle. Once we returned it, the dealership signed off on it and we left. Two months later the vehicle was towed as it was in an auction. We find out that the towing fee went to collection and they sent my wife a bill. Apparently the vehicle was still in her name even though we could show proof from the dealership we got it from that it had been returned. We've been getting the runaround from the towing company, collection agency and Mercedes on this even though everyone involved knows we did not have the vehicle and had proof of this. My question is... when we returned this to the dealership she got it from and who also registered it in her name... shouldn't they have also transferred it out of her name once it was returned?
March 5, 2020 @ 10:16pm
The Car Pro
Bob, it depends on where you are. In Texas, the car stays in the previous owners name until it is sold to an individual. Sorry you are going through this, if you know an Attorney, a short cease and desist letter should handle it.
February 26, 2020 @ 3:16pm
My question on trading a leased vehicle is. I am in texas and paid sales tax on the car upfront when i leased but now want to trade in and buy a new car. the salesman told me that a leased trade in does not get any sales tax relief such as trading a bought car. is this true??? thanks
February 29, 2020 @ 8:24pm
The Car Pro
Yes, that is true. You would get some help if you were leasing again, but not going from a lease to a purchase.
February 22, 2020 @ 6:45pm
Thank you for your article, this is very helpful information. I have a 2017 Ford Fusion lease that is ending in April. The residual value is $11,438, and I will be checking with some dealerships soon to determine the true value. Meanwhile, I have 3 questions for you:
-If I decide that a trade-in is the best option, I would like to trade the car in to a Toyota dealership and lease a Toyota Camry. I have already spoken with a Toyota dealer and he has told me that Ford will not allow their leased vehicles to be traded in at another dealership. Is this true?
-The car has a long dent, most of the way around the wheel rim. If we should decide on a trade-in, would a penalty be added to the new lease value? If so, is a trade-in a good decision?
-The purchase option at the end of the lease term is $11,938, which would probably be a very low monthly payment. Would purchasing the car at this price and driving it awhile longer before trading to another dealership be a wise decision? The car is in perfect operating condition, and the only problem is cosmetic, the dent around the wheel rim.
February 24, 2020 @ 11:32am
The Car Pro
Harry, good to hear from you. Ford Credit has some strange rules if you are within 90 days of terminating a lease and I frankly donít know what those rules are these days, but I suspect the Toyota dealer is telling you right.
If you are indeed able to trade the car in, there will be no penalty for the damage, but it will take away from the trade value. The same is true if you purchase it.
Unless the value is way off from the residual value, then I think buying the car makes sense. They are good cars and you can finance in an extended warranty at the same time.
I hope this helps you.
February 16, 2020 @ 6:17pm
Hi Jerry, Excellent article, lots of good info. I have a 2017 Jeep Grand Cherokee lease that's ending in 6 months, it's the first time I've leased a vehicle. Based on the mileage and condition of the Jeep, I think it's likely that I'll have some equity at the end.
Once the lease is up I want to get a Honda Passport. Are you saying that If I walk into a Honda dealer and they offer me say $2000 over residual value and I accept, Honda will take care of my lease-end details with Chrysler?
I never knew it was an option to go into another dealership at the end of the lease and terminate it with them - I always thought I had to go back to the original dealer to close it out..
February 17, 2020 @ 2:00pm
The Car Pro
That is correct Mark. If you trade it, the lease is concluded immediately. Thanks for listening to the show!
January 13, 2020 @ 11:24pm
Appreciate your site and wisdom when it comes to car sales.
I read your end of lease FAQ, still had a couple of questions. I am nearing the end of my lease of a BMW i3 with very low milage (14k on a 2017) and had ideas of just buying the car when my lease ended but I'm afraid the price will be too high. If I remember correctly, the price of the car that I agreed to was 44k and I think BMW said the residual value would be 28k at the end of the lease. If I were to find the "true value" of the car by going to a Carmax type place and they say it's 22k, do I take that number back to BMW and see if I can negotiate the residual value down, or is the RV set in stone? I have looked at comps and have not seen a car like mine (great condition all around) for more than 24k.
thanks for your help
January 16, 2020 @ 8:30pm
The Car Pro
The residual is not negotiable, so if it is too high, just use the walkaway option. That's the best part of a lease. The residual will be on your contract.
January 13, 2020 @ 9:05pm
can I buy my son's lease car for the residual value and avoid double sales tax = my son to purchase and then me buy it from him
January 16, 2020 @ 9:01pm
The Car Pro
It varies from state to state, but if you are in Texas, your Son will have to buy it, pay tax, then if you buy it, you'll have to pay tax again. No way around it.
January 5, 2020 @ 5:41pm
Hi Jerry, have a year left on my RAV4 exl, but plan on turning in earlier and doing a lease on a NX Lexus. Have only 20k on car and no dents and in pretty close to perfect shape. Heard there was a $300 fee to turn in early and that's it. Please let me know if there are any extra charges or something i should be aware of in doing this. Thanks you for your help, I did the same type of thing for folks that needed help in consumer home electronics. Harold Banks
January 6, 2020 @ 12:24pm
The Car Pro
Harold, good to hear from you. You really need to go through my end of lease options article at my FAQ page: http://www.carprousa.com/faq
There is no "turn in early" with a lease unless you can pay all the remaining payments in a lump sum.
Your are talking about trading your RAV, so the key there is what it's worth versus today's payoff. You could owe more currently than the RAV is worth, in which that will have to be dealt with.
Check out that article, I think it will clear things up for you
December 17, 2019 @ 1:29am
Question: i am at the end of my lease and Chase Bank sent me a letter that I need to have to make an appointment for a Pre-Inspection prior to bringing the car to the Subaru Dealer. I called Chase Bank and told the gentleman that I thought that I just have to give them the keys of the car since I am returning the car 5000 miles below.
Please email me back of your response at email@example.com.
I listen to your show every Saturday as soon as i wake up in the morning.
Thank you very much for all the helpful information you are providing to us.
December 23, 2019 @ 2:45am
The Car Pro
Victor, good to hear from you. The miles don't make any difference if there is damage or visible wear and tear so you'll have to go through the termination process. I assume after reading my article, you've checked to make sure you can't sell it to CarMax or one of the others to clear the balance and avoid terminating the lease. If not, you should.
Good luck and Merry Christmas.
November 21, 2019 @ 4:47pm
Thank you for the excellent article, it is super informative for a first time lessee.
We are nearing the end (March, 2020) of a lease on a 2017 Toyota Highlander. At our current driving rate, it will have between 18-20k miles on it, total, and as a result, I expect that we may have equity in the car and we may be interested in selling/trading toward a different (lower priced) used car.
However...we utilized a Multiple Security Deposit lease structure in order to lower the monthly payment on the car.
How would this affect our ability to sell the car to a different dealer, if that was something we wished to do?
In general, how are security deposits treated if one sells/trades out of the lease? Thanks!
November 21, 2019 @ 8:20pm
The Car Pro
To be honest, i am not familiar with multiple security deposit lease, but a normal security deposit comes off the end of the lease amount, and I suspect it will work the same here. Sounds like it would make your lease-end balance less and put you in better shape.
I would ask this question directly to the lease company to see what the end result will be.
November 14, 2019 @ 10:01pm
Thank you for the great information! I am currently 36K over my mileage for a 3 year lease on a Prius that ends in about 90 days. I know, what was I thinking! But i got a job I drive a lot for 2 months after I got into this lease. After reading Dave Ramsey's book, I have decided to just get a used car that will go the distance and not continue having monthly payments on a lease. My question to you is.. If my EOL option is $15k and I'm looking at $5k of over mileage charges, what should I accept from a dealership that has a used car that I want to buy? And will having cash for the new purchase make it easier for me to bargain so that I don't get completely screwed over?
Thank you so much!
November 16, 2019 @ 9:04pm
The Car Pro
Alana, good to hear from you. If you are going to buy a used car, BUY YOURS. You know the car, Prius reliability is fantastic, and you can keep your $5000 (which by the way is likely more like $7000). That's just money thrown away.
Finance the balance on the Prius, get it paid off, and you'll still have a lot of life left in the car.
October 30, 2019 @ 2:32pm
Hi there! I have high mileage of 48k on my 2017 VW Jetta. Residual value is 10K dealer pay-off offer is 8K. I love my Jetta, mileage and all. Is there such a thing as purchasing it on a plan from the dealer I got it from, based on just the residual value ? Or will there be interest considerations based on purchase payment plan length and credit score all over again? Sorry, I am not very knowledgeable! First time car lease/purchase experience in the US. Thanks!
November 8, 2019 @ 1:47pm
The Car Pro
Aggie, you can purchase your VW for the residual value. If you need to finance the residual value, your dealer can help you, but there will be interest charges. If you can pay cash, of course that avoids interest.
Let me know how I can help you.
October 29, 2019 @ 2:03pm
Hi Jerry, I am coming to the end of my first lease. My 2017 Alfa Romeo Guilia is in good shape but I am way over my miles (about 3,000 miles) and I still have until Feb...ugh! My idea was to turn it in early and pay the miles and extra months. When I called the leasing company they said I would owe $1800 (miles and payments) but after reading your article would I be a candidate for trading in or selling? Do I then take that money and pay the leasing company for the value of the car? I've never heard of this...so glad I started listening to your show!
Thanks, Heather (California)
November 21, 2019 @ 7:36pm
The Car Pro
Heather, if you can trade the car, you'll owe no fees at all. If you owe more on the car than it's value, it may be cheaper to turn it in and pay the mileage fees.
Get a true value per my article from CarMax or a dealer to see where you stand today. That will tell you a lot!
Let me know how I can help you.
September 19, 2019 @ 8:51pm
On 8/27/19 I traded in our 36 mth. lease of a 2017 Subaru WRX with low miles (17,500) for a 2019 Mustang. Residual was $20,205 on the WRX -Dealer payoff was $20,392.15 and Ford dealer offered $21,700 with the difference applied to the Mustang lease (about $1,300 equity) and put the WRX on their lot. Now Subaru Financial claims $300. disposition fee + $18.00 in taxes. Am I liable for this fee when and if not how do I resolve this???
September 20, 2019 @ 3:16pm
The Car Pro
In my opinion, there should not be a disposition fee charged here since it was traded in. I would contact Subaru Financial and explain everything. Every lease company is different, but I've never seen disposition charged unless you exercise the walk away option.
September 4, 2019 @ 12:24pm
I've read your article on my lease end options. Thank you for the information! I know what my residual value is on my lease ending in two months (Nov 2019) -- it's ~$20K.
I'm beginning to ask various Used Car Sales Managers what they would pay for my car if I were to sell it to determine if I have any equity. My question is, what if the highest bidder price is $18K (less than my residual value), but there is a car on the lot that I am interested in that is $16k? I know I wouldn't have any equity at an $18K sale price over the residual value ($20K), but can it still be traded in for a less expensive car on their lot? Is there benefit to this? Or is my best course to walk away from the lease and start a new sales process on the desired $16K car?
September 6, 2019 @ 7:40pm
The Car Pro
James, just walk away from the current lease assuming you are OK on mileage and no wear and tear charges. Then decide what you want to do about your next purchase or lease. No need to roll $2000 or so into the next vehicle when you can simply walk away.
Best of luck!
September 1, 2019 @ 4:13pm
Hi Jerry! I an in my first ever lease, having always bought new. It is a 3yr lease of an AcuraMDX. The lease ends in July 2020. I do not like the car and would like to end the lease early. I have another car, so I don't need to buy, lease or acquire another one! So, what is the downside or penalty for walking away early from a lease? Thank you, V
September 3, 2019 @ 11:11am
The Car Pro
Vince, there really isn't a cheap option for you here. If you want to walk away now, you'd have to make up all the remaining payments to do so. OR you can sell it yourself to a dealer or an individual, but if the sale price is less than the amount you owe, that money will have to be made up also.
I'd start by getting a cash offer from a dealer like CarMax, then call and get the current payoff. That will tell you where you stand.
Let me know how I can help you.
August 21, 2019 @ 11:35am
I have a Subaru Forester 2017 and the lease ends in February 2020. I'm starting to get mail from other dealers offering me check, discounts, etc if I get a new lease with them. I am interested to lease a new car but not with my previous dealership. I don't want a Subaru. What should I do? Could I just trade my Subary for and Honda, for example? do I need to pay disposition fee, mileage charges, and wear and tear? What's the process I should follow? This is my first time getting a lease.
You can trade it for whatever brand car you want unless you owe more than it's value, then that will have to be dealt with. If you trade it, there is no disposition, wear and tear, or mileage fees.
August 8, 2019 @ 5:16pm
My current 36-month BMW lease will mature on 10/15/19, and I am going to do a walk away turn in. My question is (as long as I will complete paying all 36 lease payments), do I have to turn in the car on exactly 10/15? Can I do that like 10 or 20 days before that?
August 9, 2019 @ 12:19pm
The Car Pro
Yes, as long as the final payment has been made, you can walk away any time. Be sure to read my END OF LEASE OPTIONS on my FAQ page before you just walk away.
July 30, 2019 @ 4:41pm
Hi! I have a 2017 Hyundai Elantra and the lease ends in mid-September. I'd like to move to the Toyota family but am ~12k miles over my allotment on my current lease. Does it make more sense to trade in the Elantra for a new Hyundai, knowing my mileage has now significantly decreased (used to put on 15k miles/year, now am at about 9k/year) or to pay off the disposition fees and mileage and make the move out of Hyundai? I've had very poor experiences with Hyundai's customer service where when bringing the car in the car to add a part to the engine, it came back damaged with the front bumper hanging off, a brand new battery no longer working, and a hole in the tire. Very iffy on sticking with this company and leasing a new car with them, I'd love to get back into a Toyota for their great quality and customer service, but also want to manage expenses in the transition process.
July 31, 2019 @ 10:52am
The Car Pro
Elizabeth, it is certainly worth looking at two numbers:
1). what is my car truly worth versus the current payoff, I explain how to do this in the leasing section at my FAQ page: http://www.carprousa.com/faq
2). Talk to the lease company about pre-termination inspection to let you know how much cash it will take to walk away from the lease, total.
Once you've done your homework, the best way to go will be very evident.
May 27, 2019 @ 5:22pm
Thank you for this great information. I am coming up on the end of my lease in December 2019 on my 2016 car, I have kept the mileage far below the limit and my car is in great condition. I assume I have some equity in the car and would love to be able to keep it. What would be my best course of action to keep the car, take equity out and reduce my monthly payment?
May 27, 2019 @ 9:11pm
Annie, just follow the directions at that article. Not sure where you are but getting a cash offer from a few dealerships isn't hard.
If your car is worth more than the residual value, just visit one of my dealers, you'll be in good hands.
May 12, 2019 @ 1:15pm
Great article, thank you. I have a 2106 fully loaded Toyota Highlander (Limited Platinum). Not a scratch or blemish in or out. My 3 year, 45,000 mile lease is coming to an end in November, and I will probably only have 18,000 miles on it at that point. Residual value is $24,000. They currently have the same exact car on their lot (same year, same options) with 77,000 miles on it for $30k and change. Right now my trade-in value is roughly just over $32k. Long story short, I am most likely going to have quite a bit of equity in the vehicle at the end of the lease, barring any accidents, etc.. If I chose to buy it, can I use the equity as a down payment towards a loan for it? I have read that you can use the equity as a down payment for a new car, but haven't seen where I can use it as a down payment for the SAME vehicle, with a used car loan.
Thank you in advance, Julie
May 13, 2019 @ 10:33pm
Julie, you cannot use the equity as a down payment, but buying your vehicle well under the value is the same thing.
In other words, if your math is correct, you'll be paying $24,000 for a $32,000 vehicle and that's awesome!
July 15, 2019 @ 1:11pm
A local financial institution, credit unions are a good choice for this, often lend 100% value (at their determination) on recent model used vehicles. Say, for instance, they value your vehicle at $30K, you have the option of either having the credit union establish a new loan at the $24K pay-off amount and you retain the excess equity in the vehicle that you keep, or take the 100% finance offer and pocket the excess equity cash for yourself. It's a good position to be in at the end of a lease !
July 15, 2019 @ 2:33pm
The Car Pro
You are correct Jack. Not everyone comes out that well, sometimes the residuals are too high or the market has shifted like we are seeing with sedans.
The one thing I love about leasing is you can't be upside down if you stay in the mileage and keep the car nice. Having equity is just a plus!
April 25, 2019 @ 7:07pm
My wife has ten-months left on her three-year Camry lease, but she really wants a Gladiator, especially after seeing the incredibly low lease payments on Jeep.com. Would we be foolish to try to make the move? Are we likely to be upside down?
April 26, 2019 @ 12:27pm
Alan, you can certainly look at numbers on one, but the payment you are seeing is on a stripped down Gladiator with an over $5000 down payment. The base models start around $35,000 but they run all the way to $60,000.
April 24, 2019 @ 1:11pm
Hi I've never had a lease before this is my first time please advice; I have a Honda Accord 2016 my lease is up on August 2019 in a few months i didn't go over my mileage, Nothing is wrong with the car besides may some small scratches like when people open the door next to you but nothing mayor. But my credit did go low do to some personal issue for the pass months i've been working on getting back up again which i have, is this going to be a problem? if i want a new lease or if a want to buy the car? how much extra would they ask me? not sure how this end Lease thing works at the end... Thank You in advance
April 26, 2019 @ 12:24pm
Every case is different. You can start to work with one of our dealers now to see the best course of action. If the current Honda is worth more than the amount owed, you can do something now. All of our dealers are here: https://www.carprousa.com/certified-dealer-search.php
Jerry Reynolds, President
Car Pro Radio Network
February 24, 2019 @ 8:45am
Hi Jerry- My wife and I leased a car from one of your dealers here in Texas. We are midterm in the lease and will be moving to Florida in May. My question is can we turn the car in at the end of the lease in Florida or do we have to turn it in in Texas? Would it be smarter to turn the car in early or trade it in? What would you suggest? Thank you and I enjoy your radio show.
February 24, 2019 @ 1:30pm
You can turn it in in Florida, that is not a problem. This happens frequently. It's unlikely you'd be able to sell it for more than the payoff, so I'd plan on turning it in after you get moved.
Jerry Reynolds, President
Car Pro Radio Network
February 14, 2019 @ 3:16pm
Bank in June 2016 I leased a 2016 Dodge RAM 1500. My lease is up in June 2019, however, I am currently 16,500 miles over the allowable miles. My life has changed a bit and i didn't foresee the extra mileage. The residual value of the car was set at around $28,000 (22,500 max allowable miles) however, the true value of the truck is around $22,000 at best. I really would love to get out of this lease, however, I am just worried about all the extra fees that I will incur by doing so. The vehicle was bought from a Dodge delaer, however, the financing company is a third-party. What do you suggest that i do? I will need another car to replace this one. Thank you.
February 15, 2019 @ 5:26pm
If you like the Ram, just purchase at the end of the lease and you won't be subject to the mileage or wear and tear fees. Otherwise, you'll need to come up with a bunch of cash to walk away. I think that is your cheapest way out.
February 11, 2019 @ 3:18pm
Just to clarify, the residual value on the lease contract is NOT necessarily set in stone. If you speak with someone at the dealership, they'll tell you that it is. If you contact the leasing company, they would rather sell it to you for more than they'd get at auction; which may be less than the residual value. It's worth the call. Good luck to all.
February 11, 2019 @ 3:28pm
I won't say you are wrong, but in 35 years in the business, I've never seen it. With the old open ended leases, that was true, but none of the OEM finance companies even offer those.
Thanks for listening.
February 11, 2019 @ 9:26am
We are seniors at the end of a 3 yr. lease on a 2016 Kia Forte with 19K mi on the allowable 30K. It is in great shape with no issues and we are trying to determine if we have an equity position. What reassurance do we have that a used care mgr. will provide the actual "true value"a Thank you
February 11, 2019 @ 3:27pm
Good to hear from you. You should get several opinions of the CASH VALUE amount to determine a good median range. If you have a Carmax in your town, they do a good job with their free cash offers.
If you haven't read my leasing section at my FAQ page, you should do so. I think it will help you.
February 5, 2019 @ 8:21pm
I have a fully loaded RX 350 with a 36 mo lease up the end of May. I only have 22,000 miles and the buy out is $34,643. I was planning on purchasing the car as I am retiring but was in an accident about 2 years ago which resulted in about $15,000 worth of body damage. There was no frame damage or anything else.
I know the dealer will not keep the car and they said at the lease inception that the buy price out is non-negotiable. I live in the Los Angeles area and the bodywork was done by one of the best body shops and they have given me a lifetime warranty. Is there any way to negotiate with the dealer? I am sure they will send it to auction. Is there anyway to offer x% over what they would get there? Any suggestions?
February 7, 2019 @ 10:12am
Vicki, the dealer has nothing to do with the buy out price, that is set by Lexus Financial, and it's set in stone. I would not recommend buying this vehicle due to the accident, that's the beauty part of a lease. Although the repairs seem fine now, often they don't show up for years.
Talk to my friend Matt the GM at Lexus Santa Monica. You can buy a Certified RX from him that has not been damaged, or lease a new one, he's a great guy: https://www.carprousa.com/dealers/losangeles/Lexus
February 4, 2019 @ 3:12pm
How go you find the residual value of your leased car? Thanks, Glenda Salter
February 6, 2019 @ 10:24pm
You should be able to find that here in Jerry's list of leasing terms to know. Let us know if you need more information.
Thanks for writing!
My 36 month lease with Subaru allows me to continue making lease payments for at least six months at the end of my 36. Is that a good idea or is it better to just go ahead and lease another car? What about turning the car in a few months early, if there is good equity?
January 22, 2019 @ 8:02pm
If there is good equity now, Iíd do it now. Things can change quickly, so Iíd pull the trigger if indeed the equity is there.