At the end of your lease, you typically will have the following options:

• Return Your Vehicle
• Extend Your Lease
• Purchase Your Vehicle
• Lease Another Vehicle

You can often times combine more than one option.  For example, you may have equity in your leased vehicle (i.e. its actual value is more than the residual) but you don't want to keep it.  In this case, it may make sense to purchase the vehicle, immediately sell it, and then lease a new vehicle.  You can use your windfall to make a cap cost reduction to lower your monthly payments, or you could keep the money for your own personal use.   Please see our 8-part article on Leasing as a Hedging Strategy for details on all of your purchase or turn-in options.

Prepare for the lease end

About six months before the end of your lease, you should start thinking about what you are going to do at the end of the lease.  These are the main items that you need to look at:

1. Do you want to keep the vehicle or turn it in?
2. Is it worth more or less than the residual?
3. If you are going to have extra miles, what is the total mileage charge going to be?
4. If there is excess wear and tear how much will you be charged?  Many lessors will do a pre-inspection, and tell you what you are going to be charged for, and the total amount that will be due.
5. If there is going to be excess wear and tear charges, how much will it cost you to take care of these items yourself?

Once you analyze all of your options you will be able to determine the best option for you.  Our leasing professionals specialize in helping our clients minimize their end of lease costs.

Part 11: How It Works