Leasing vs. Buying
You may return the vehicle at lease-end, pay any end-of-lease costs, and "walk away."
You may have to sell or trade the vehicle when you decide you want a different vehicle.
|End-of-term responsibilities. In a closed-end lease, you return the vehicle at the end of the lease unless you buy it (usually by exercising your purchase option, if any). You are responsible for any excess mileage and excess wear-and-tear charges if you return the vehicle, plus any disclosed vehicle disposition fee. You are also responsible for any amounts due under the lease, such as parking tickets paid by the lessor, personal property taxes, or late charges.||End-of-term responsibilities. If you own your vehicle and decide to sell or trade it, you negotiate the sale or trade-in price of the vehicle. You also decide when, where, and how to sell or trade the vehicle to get the best possible price. Selling it may involve reconditioning the vehicle, advertising it for sale, and obtaining different sale bids or trade-in offers.|
| Gain or loss at lease-end.
In a closed-end lease, if the market value of the vehicle is less than the
residual value stated in your lease agreement for reasons other than excess
mileage or excess wear (that is, the actual depreciation is greater than
the depreciation shown in your lease), you are not responsible for the difference.
If the market value of the vehicle is more than the residual value stated
in your lease (that is, the actual depreciation is less than the depreciation
shown in your lease), there may be equity in the vehicle. You donít receive
this equity in the vehicle if you return it at the end of the lease. However,
you may be able to acquire this equity in two ways:
||Gain or loss at sale or trade-in. The trade-in or sale price of the vehicle will not be known until you negotiate it. If the value of the vehicle is greater than your loan payoff, you receive this equity. If the value of the vehicle is less than your loan payoff, you are responsible for the difference.|
| Where you return the
vehicle. You should check your lease agreement or contact the lessor
to determine where you may return the vehicle. You may be charged an additional
fee if you do not return the vehicle to the location designated by the lessor.
Other options at lease-end. At the end of the lease, you may also have other options. For example, most lessors will permit you to extend your lease on a month-to-month basis for up to 6 months if you havenít made a decision about getting a replacement vehicle. Some lessors will permit you to re-lease your vehicle on terms you negotiate.
End-of-lease costs. If you are returning the vehicle to a dealership and have a question or concern about your end-of-lease costs, you should contact the company holding the lease agreement.
For more information related to vehicle return, see the following sections:
Next: Disposition fee