Essential Money-Saving Tips for Ending Your Car Lease

Introduction

As drivers approach the end of their car leases, many find themselves unsure of the best steps to take. Add to that the challenges presented by the recent global health crisis, and it’s understandable that lessees may feel overwhelmed. The good news is that automakers and financial institutions are offering support through flexible options like deferred payments, lease extensions, and penalty forgiveness. Below, we’ll outline how to navigate these options, avoid unnecessary fees, and make the most informed decisions regarding your lease-end options.

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COVID-19 Lease-End Options

During the COVID-19 pandemic, many automakers and dealerships have introduced flexible lease-end solutions to assist customers. These include:

• Lease Extensions: Many automakers offer month-to-month or six-month extensions. Check with your automaker to confirm if penalties are waived during this period.
• Deferred Payments: Some financial institutions allow lessees to defer payments without incurring additional fees.
• Pick-Up or Drop-Off Services: Dealerships may offer contactless options for returning your vehicle or trading it in.

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Note that extending your lease could require additional registration costs, even if the extension is short-term. It’s best to confirm details with your automaker or dealership for the latest updates.

Evergreen Lease-End Tips

Turning in Your Lease

If you plan to turn in your leased car, prepare for the following:

• Coordinate a vehicle inspection with your dealership. Being present during the inspection allows you to address any questions or concerns directly.
• Be prepared to pay a disposition fee, wear-and-tear penalties, and mileage overage charges.

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Trading in Your Lease

Trading in your lease for a new vehicle can be advantageous. Follow these steps:

1. Get appraisals from several dealerships to determine your car’s trade-in value.
2. Compare offers to your car’s residual value, which was set at the start of your lease.
3. Decide your next steps based on the comparison:
• If the trade-in value exceeds the residual value, you have equity to use as a down payment for a new car.
• If the trade-in value is lower, calculate lease-end fees and assess whether turning in the car is more cost-effective.

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Purchasing Your Leased Vehicle

If you love your leased vehicle, purchasing it may be a practical option. Here’s what to do:

• Check your buy-out price, which includes the residual value, remaining payments, and any associated fees. This is often listed on your monthly lease statement.
• Shop around for competitive financing rates to secure a good loan.
• Calculate your total costs, including lease-end fees, to decide if buying makes financial sense.

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For example, if your buy-out price is $12,000 and your lease-end fees are $2,000, buying the car could save you money compared to turning it in. However, if the residual value is much lower than the buy-out price, turning in the car may be the better option.

Minimizing Lease-End Costs

To reduce potential fees, take proactive steps before returning your leased vehicle:

• Address Minor Repairs: Fix small dents, scratches, and windshield chips to avoid wear-and-tear penalties.
• Check for Excess Mileage: Review your lease agreement to understand mileage limits. If you’ve exceeded them, calculate the per-mile penalty and factor it into your costs.
• Clean Thoroughly: A professional cleaning can improve your car’s condition, potentially minimizing inspection-related fees.

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Staying Safe and Making Informed Decisions

With health and safety being top priorities, many leasing processes can now be handled remotely. Utilize online tools to compare vehicles, browse financing options, and contact dealerships. MotorVero’s platform enables you to explore cars, connect with certified dealers, and complete much of the leasing process from home.

Take your time reviewing your options. This is not a decision to rush, especially during uncertain times. Carefully weigh the costs and benefits of turning in, trading, or purchasing your leased vehicle.

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