You’ve come to the end of your lease and you like you car enough you want to keep it in the driveway. Yes, Virginia, there is such a thing as keeping your car once the lease is up, but don’t do anything without doing your homework first!
First, you need to know the cost of buying out your lease. Check for the purchase option price and go through every minute detail of your contract – you have to be very anal here. Simply add up the residual value of your car to the purchase-option fee dictated by the dealer (this usually costs a few hundred smackeroos) and you get the above price. Think back to the time you put your John Hancock to paper and started the lease – your monthly payments would have been the difference between a) the sticker price at the start of the lease and b) the vehicle’s estimated value at the lease’s expiration plus c) a monthly financing fee.
This estimated price of the car value at the end of the lease is what is termed in leasing jargon “residual value”. It is the expected depreciation – or loss in value – of the vehicle over the scheduled-lease period. For example, a car with a sticker price of $40,000 and a 50% residual percentage will have an estimated $20,000 value at lease end.
So all right, you now know how much it would cost to buy out your lease, so your next mission, should you decide to accept it, is to find out how much is the actual, or market value of the vehicle. So, how much does your car retail for in the market? Ah, it’s time to call on that good friend of ours, Professor Research, to help you with getting a ballpark figure. Crunch them numbers and size up your car, seeing how it stacks up against other vehicles that have similar stats in terms of mileage and similar condition. Go surf the ‘net and check out sites like Edmunds.com, Cars.com and Kelly Blue Book for the most reliable and detailed pricing statistics.
Culling information from as many sources as you could would certainly help you get a retail value that can be considered realistic. All you have to do now is compare the two amounts. If you get a low residual value as opposed to a high retail value, then you’re going great guns – give yourself a pat on the back! But in most cases, the chances of getting a high price for a car once the lease expires are quite formidable. Don’t despair though. Why so, because leasing firms are well-informed about the fact that residual values will be, in most, if not all cases, greater than the market value, and will always be looking for a good offer. It’s easy to bargain for a lower price on your leased car – be Mr. Suave, or Ms. Suave, and come up with a negotiation strategy that you know would work. Put forward a price that is below your actual target and negotiate hard until you wind up near that figure.
Jewelry designer and artist Caroline Jasper creates one-of-a-kind necklaces gemstone – each piece handcrafted by an artisan.