The 5 Best Personal Car Lease Options Upon Expiration

car lease endingLeasing a car is a great idea for many reasons. Not only is it cheaper than buying a comparable car, but you have the ability to drive something new every few years. If you decide to lease your car, it is important to know what options you will have when the contract comes to an end. Some people are under the impression that their only option is turning the car into the leasing company and re-leasing all over again. Of course, this is not true.

Here are several options to consider when your car lease ends:

1. Return the vehicle to the lessor and walk away. With this option, you can take the car to the dealer that leased it to you and walk away for good. For those who disliked their car, this is the number one option.

Note: When you do this, your car is going to be inspected with a fine tooth comb for any damage. You will be charged for anything that is not deemed to be “normal wear and tear.” This is one of the main drawbacks of leasing a vehicle and turning it in once the initial contract expires. Additionally, don’t forget about “mileage overage” fees.

2. Extend the lease agreement. Did you fall in love with your car, as well as the concept of leasing? If so, you may be able to extend the agreement on your current vehicle. To do this, you need to contact the lessor to discuss the details of the agreement. In most cases, you should be able to agree to an extended term for at least the same price that you have been paying.

3. Purchase the vehicle. If your lease comes to an end and you don’t want to get rid of your car, you have the ability to purchase it from the lessor. The buyout price should have been presented to you at the time of signing your initial agreement. If you are interested in owning your car, as opposed to extending the lease, you can either pay in cash or arrange for financing.

Example: A few years back I leased a car with a purchase price of roughly $22,000. After three years of paying on the lease, I was offered a buyout price of $12,500. Although I passed on this offer and opted to walk away, had I decided to purchase the vehicle, the monthly car payment would have been approximately the same as my previous lease payment. The main advantage to buying was that the title would be transferred to me, as opposed to the leasing company remaining as the owner.

Before you make the decision to buy your vehicle, compare the Kelley Blue Book price to the buyout price. This will give you a better idea of what kind of deal you can get.

4. Let your old lease expire and start a new lease. As noted in the opening paragraph, this is very common because many lessees believe it to be their only option. If you enjoy the benefits of leasing a car and are willing to do it again, this is the option that you should consider. Generally speaking, you will give your old car back to the lessor and choose another one from the lot. The main thing to remember is that you will have to negotiate a new lease for your new vehicle. In other words, you are not extending your past agreement.

5. Trade your lease to somebody else, before your contract is up. This is a relatively new idea, but one that is gaining a lot of steam. With this, you can get rid of your lease before it expires without having to pay a fee. To learn more about the options here, visit LeaseTrader and Swapalease.

If your car lease is coming to an end in the near future, expect to receive paperwork from your dealer or leasing company that details the options above as well as any others that are currently being offered. All of these options should be seriously considered as they each serve a different need depending on your financial situation and personal preference.

What route have you decided to go in the past when your lease expired?

(photo credit: KellyAutomotiveGroup)

  • Tony Cars

    6. Don’t lease in the first place…it will end up costing more in the long run than just buying the vehicle.

  • Rebekah K

    Hi Chris, love the article. We see many people, with leases that are ending, who struggle with what to do next. You did a great job of presenting all the options! :)

    For the record, my name is Rebekah and I work at Kelley Blue Book. I checked with our team that compiles the data for our values and they suggested your readers refer to the Suggested Retail Value when negotiating a lease buyout. The Suggested Retail Value is the value that is representative of dealers’ asking prices for a used car. We suggest this value as a starting point for negotiation between a consumer and a dealer.

    You can find this value once you have selected the year, make and model of the vehicle you are researching.

    Hope this helps!

    Rebekah K
    [email protected]

  • Rob

    Nice article. Unknown to many, Car Leasing is not without plenty of options.

    I might add one thing to your #3 option of buying the car. You can always make them a better offer. If you got an exceptionally good deal on your car lease, chances are the listed residual value and pay-off is way higher than what you could buy a similar car for on the street. The finance company is going to be stuck selling that car one way or the other, so make them a lower offer.

    For example, I just completed a 2-year lease on a 2009 Subaru Legacy SE. At $19,000, the payoff was extremely high. I asked the finance company if they would make me a better offer. They offered to sell me the car at $15,700 including tax. That’s below market price for a 2 year old car like this! I opted to turn the deal down anyway, and went with the lease on a new RAV4 which still carries a lower payment than financing a $15,700 car. Leasing is a hard habit to break.

  • John Hertel

    If i lease my personal car and the auto hurts someone in a accident,will I be responsible too?

  • John Hertel

    If i lease my personal car and the auto hurts someone in a accident,will I be responsible too?

  • Rob Delisa

    Car Leasing is always a good option, but just like buying a car, you have to shop for the best deals.

  • Gsovell

    Regarding Point 2. Why would one extend the lease at the same price they were paying. i.e. On day one when one enters a lease agreement the car was new. Jump forward three years the book value on the car is almost half. Sounds like the monthly lease payment should one should be greatly reduced maybe almost half as well..