A lot of people have no idea what to do at the end of a car lease. One of the things you have to know is that returning a vehicle early can cost you termination charges. Estimate mileage overages and excess wear charges before returning a vehicle. It will help you prepare your budget. It is also vital to know any remaining amounts you owe before you visit the dealership. There are several things you have to know before you return a vehicle.
What is lease equity?
It occurs when a vehicle’s residual is less than its current market value. It is the amount you can buy the vehicle for at the end of a lease. You may have no intention of buying the leased vehicle but knowing this number is vital. It will help you know if you have equity.
What fees do you have to pay when the lease ends?
When your lease ends, you can return the vehicle to the leasing company or you can buy it. The fees you have to pay depends on what you choose to do when your lease ends. Here are three fees you may have to pay.
Early termination charge. If you want to end your lease earlier than the agreement, you have to pay this fee. Some people want to buy their leased vehicle before reaching the end of its term. You have to be in the last six months of your lease to do this.
Disposition fee. It is the charge when you return the leased vehicle at the end of the term. This charge is for the payment of the expenses incurred by the leasing company to resell the vehicle. It is a non-negotiable fixed fee set at the start of the lease. You do not have to pay for this fee if you decide to buy the leased vehicle.
Purchase option charge. Most leasing arrangements allow you to buy the leased vehicle for its residual value at the end of the term. You have to pay a purchase option charge to exercise this option. Keep in mind that if you choose to buy the leased car, you can roll this fee into your car loan.
Lease mileage charges. All lease contracts have these charges. You can have the next vehicle lease absorb the mileage charges at a fraction of the actual contract charges.
Where should you turn your lease in?
You do not have to turn the leased vehicle in at the store you leased it through. Any authorized dealer accepts the return of a leased vehicle.
Can you transfer a car lease?
Most lenders do not allow a car lease transfer. At the most, you can add a family member if approved by the lender.
You can lease different types of cars including trucks. If you are unsure what to do when your lease return trucks contract ends, you can consult with a finance advisor.