For many drivers, leasing an automobile is an attractive and sensible option to buying. But what happens when the lease comes to an end? Before you decide to either purchase your leased vehicle or return it to the leasing company, you'll need to know your options and responsibilities.
Southern Californian David Cavano is in Automotive Services with the Automobile Association of America (AAA). He has been with the organization for over 15 years, and offers this guide to what you can expect when your auto lease ends:
- Buy for residual value.
Every lease is different, but you typically have two options when the lease is up: you can buy the car or return it. If you choose to buy, you'll likely pay what's called "residual value." This is the amount of money that is still owed on the car when the lease over.
- Return location may vary.
If you choose to return the car, you may not be able to return it to the dealer. Since you actually leased it from the leasing company, they will tell you where you must return it.
- No reimbursement for add-ons.
Many leasing companies do not mind if you have added things to the car, like new rims or audio systems. On the other hand, they will not reimburse you for the value of these add-ons, and they will not let you remove them unless you can install replacements.
- Repairs must meet lease standards.
If you damage your vehicle during a lease you must have the vehicle repaired based on the standards and criteria of the leasing company.
- Read your contract.
And finally, always read your lease in its entirety. If you sign a lease that you do not read and then there are problems down the line, says Cavano, you have no one to blame but yourself.
For more information about safe driving, check out the following websites:
American Automobile Association (AAA)
www.aaa.com
The Federal Reserve Board: Keys to Vehicle Leasing: Quick Consumer Guide
www.federalreserve.gov
National Vehicle Leasing Association
www.nvla.org
Car Buying Services.com: Leasing Tips
www.carbuyingservices.com
New Buyer: Auto leasing Tips & Mistakes
www.newbuyer.com
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