Lease End Options

IN THIS SECTION

What is your vehicle worth?

So, you are finally at the end of your lease. What should you do next?

The first thing to do is to figure out your vehicle’s worth. There are just as many variables now as there was when you began the lease. Many consumers do not realize the number of factors that go into their lease end options and therefore resolve to simply turning their vehicle into their dealer and taking their “medicine” from the leasing company.

Such a solution is not always necessary if you understand what each variable means to your leasing situation. Let’s take a look at the breakdown.

Variable	What does it mean?	Adjustments
Overage in Miles	Your lease amount was determined by assuming that you would pay off the vehicle’s depreciation over a set period of time. The mileage was figured into your monthly payment. If you drive over the mileage that was agreed to, then you have effectively reduced the value of the vehicle.	$.10 - $.25 is typically the overage fee per mile. This is determined at the dealer. So, you simply multiply the overage fee (i.e. $.10) times the number of miles that you are over, which will give you the amount that you owe. If you know the residual value of the vehicle, you can subtract this overage amount from the residual to understand what the vehicle is worth.
Variable	What does it mean?	Adjustments
Damage	When returning your vehicle to a dealer, it will be carefully inspected for damage. Inspectors may overlook a few small scratches, but will not overlook dents or anything else that must be fixed prior to resale. If your vehicle is damaged, it is a good idea to have it fixed prior to return. It is advisable to us a local repair shop, since deals will charge a premium for any repair work.	Have your vehicle checked out by a local body shop and get an estimate. Then take your vehicle into the dealer and have them give you an estimate of the turn-in costs associated with the damage. Use your body shop’s assessment to negotiate a lower cost from the dealer.
Variable	What does it mean?	Adjustments
Excess Wear and Tear	Excess wear and tear is similar to damage. You should follow similar procedures to assess the worth of the car. Please keep in mind that everything is inspected upon vehicle turn-in.
Variable	What does it mean?	Adjustments
Residual Value	The residual value of your vehicle, or the estimated worth of your vehicle at lease-end, is typically determined at the beginning of a lease. The actual value may be higher or lower than the estimated value stated in your lease contract. If the residual value was included in the lease contract, then you will not owe anymore on the car unless you have any overage in miles, damage or wear and tear.	Make sure that you agreed to the residual upfront and follow out the respective rules set forth by the contract.