Buying Out your Leased Car
At the end of your lease, you might decide you want to buy your car and keep it. Below are several reasons that might influence the lessee's decision to buy out the leased car.
- The buy-out price as agreed in the contract makes buying the car a great deal.
- You know the car's mechanical history and you know how reliable the car is.
- You don't want to embark on starting a new lease or shopping for a new car.
- You've exceeded the allowable mileage and want to avoid the penalty fees.
- There is excess depreciation (wear and tear) on the car and want to avoid extra fees.
The simplest way to buy your car is to check its residual value in the lease contract. If the present market value of the car is the same as the residual value, then this might be a good deal for you.
Tips on Buying Out
Well the first step when you want to buy out your leased car is to contact the car leasing company and inform them that you want the buy-out amount of your lease vehicle. The buy-out is more or less different with the residual value since your security deposit is deducted. If you want to buy-out your leased car even before the end of the term, the buy out amount will be for that date and not the end of the term.
Negotiating to lower down your buy-out amount is possible however you have to be dealing with the person who has authority to make a deal. Deliberate in your mind when on the negotiations you'd like to make, below are tips on how to arrived at your desired figure.
Assume that if the lease car is returned, the leasing company will have two options to dispose of the car:
- Let a dealer put the car up for sale as a used car, or
- Ship the car to an auction and accept the wholesale price.
If the car is shipped to an auction, the leasing company has to pay an auto transport company to move the vehicle, and accept whatever is bid for it.The amount will likely be below the residual value of the car which actually puts you in a good position to negotiate.
Call the car leasing company and make your offer. They will either give you their counter-offer or ignore you completely, nonetheless just leave your contact number and give them time to call back.
When you are finally negotiating with the car leasing company, don't recount that you went over the allowable mileage or there is an excess wear and tear on the car. If they know this they might demand a higher price for it.
Allow several weeks to negotiate a buyout figure for your leased car however if the negotiations look it can take longer, arrange for an extension of the lease.
At the end of the Day
Opting to buy your at the end of the lease is a win-win situation for you and the car leasing company. Just make sure that both you and the leasing company have reached a fair deal for the buyout and orient yourself with the other related fees before signing the deal.
