No Script What are Your Options When Your Lease Ends? -

End of lease options

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 what your vehicle is 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.

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.


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.

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.

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.

Back to the top

End of Lease Options

Approaching the end of your lease produces a number of options for you to choose from. You can turn your vehicle in, re-lease the vehicle, buy it out, or even create a loan based off the residual price. Of course if you cannot wait until the end of your lease, you can consider terminating your lease early, which means you are turning over your lease before the lease term expires.

Let us take a look at your options at the end of a lease:

Early Lease Termination

Ending the lease on your vehicle early can be one option. Most dealers will tell you that your only option to end a lease early is ‘early lease termination’. During this process, the lessee (you) is required to pay an early termination penalty plus the balance of the remaining payments. For example, if the payments are $700.00 a month and 10 months are remaining on the contract, then the lessee owes $7,000.00 ($700.00 X 10 payments) plus any penalty fees.

When you turn your car in these additional fees are often applied toward your trade-in, but the net of the transaction may cost you thousands of dollars.

Do not pay thousands of dollars to exit your lease early when there are much more cost-efficient solutions!

Re-leasing Your Vehicle

You may opt to re-lease your vehicle. This typically means extending your lease contract by 12-24 months, and paying an adjusted monthly payment. The leasing company can adjust your payment based on the residual value of the vehicle relative to the lease term extension.

Typically, your new payment may be slightly lower, since the residual value decreases with every passing year. You should consider, however, that you will probably start to encounter problems with your vehicle as you surpass 60,000 miles, and most warranties expire by that point. A savings in monthly payment may not save you any money in the long run if you have excessive maintenance and/or repair costs.

Buy-out Your Lease

You may decide that you would like to buy out your vehicle. Reasons might include:

  • You like your vehicle and you would like to own it
  • You owe an excessive amount for extra miles and damage
  • You want to sell it to someone else

Buying out your lease will require you to pay off the residual value of the vehicle, plus any remaining payments, to the leasing company. You can do this through financing or by paying cash. If you finance, you will need to get approved from a financing company and pay interest on your loan. You will also pay for the transfer of title, taxes on the vehicle, and for the tags.

Upgrade to a Newer Car

At the end of your lease, a popular option is to “upgrade” to a newer model. This is a good option if you:

  • Have no additional costs associated with the car (mileage, etc…)
  • Enjoyed leasing and want to start over again
  • (Or) Had a positive relationship with the dealer

If you owe money at the end of the lease, a dealer will tell you that they can just roll over your charges into a ‘trade-in’. This does not mean you do not have to pay the fees, but rather you just end up paying it over a longer period of time, and paying interest on it as well. Try to take care of all charges so that you start your lease anew.

Salesmen may try to get you to put some money down on your new lease. This is typically not a good idea. While it may lower your payments, the money is lost forever – you will not see it again (unlike if you purchased the vehicle).

Back to the top

How to Prep Your Vehicle for Turn-in

Have your vehicle inspected by the dealership that you are planning to turn it before your lease is up. This will give you time to determine what your options are, relative to vehicle repairs and vehicle drop-off.

To do this, you must schedule an appointment at the dealership to have an ‘end of lease evaluation,’ which may take several weeks to get. They will tell you what the vehicle is worth, what you owe, and what your options are. With this information, you can use Swapalease and other sites to investigate whether turning your car in is the best option. You may find that a lease assumption will save you a lot of money.

If the dealer assesses damage on the car and gives you an estimate of cost to repair, take it to a local body shop to compare the cost difference. If the body shop is cheaper, negotiate with the dealer. If the dealer will not budge on the price and you decide to turn in the vehicle, have the damage repaired elsewhere prior to returning.

Since dealers will assess a fee for minor scratches and dents, you may want to try to touch-up the small scratches with ‘scratch remover’ that you can find in an auto repair section of a store. You may also want to use the repair paint that may have come with your vehicle, but be careful… if you do not know what you are doing; you may end up doing more damage than repair.

Finally, clean your vehicle and remove any personal possessions. If it looks like it has been maintained well, the dealer may cut you a break on some of the scratches.

Back to the top

Where to Turn in Your Vehicle

Original Dealer The original dealer is usually an option. Many times, it is smart to stay with the same dealer if you have a good relationship and you felt as if you got a good deal. They know you and will work with you on any extra costs associated with the turn-in.

Other Options Since the leasing company actually owns your vehicle, it is important to consult with them to see which locations are acceptable drop-off points for your vehicle. Dealerships and auction lots are the most common drop-off locations.

Consumer You may also sell your vehicle to another consumer, but this can be a lengthy and complicated process. You may opt to do this if you want to get rid of your lease obligations and cannot or do not want to do a lease assumption. Selling your vehicle out-right can be complicated because there are several steps involved.

  • First, you must buy your vehicle from the lessor so that you own it. You may not sell a vehicle that you currently lease, as the leasing company is the owner. To buy a vehicle, you must pay for the tags, taxes and title transfer (which can be anywhere from a few hundred to a few thousand dollars) plus the negotiated price (or residual value) for the vehicle. This process usually takes a few days to complete.
  • After you purchase the vehicle, you must find a buyer with good credit. Sites such as are good places to find a buyer.
  • Once you find a buyer whose credit has been approved, you then go through the transfer of title/tags/taxes process again.

Back to the top

Finding Your Next Lease

Before you start your next search, think about what worked well and did not in your last vehicle lease/purchase. Make a list of things that are important to you:

  • No down payment?
  • Short terms?
  • Low monthly payment?
  • The car of your dreams?

Once you have a few key variables defined, you can start your quest for the perfect vehicle to lease or purchase. Lease assumption sites such as Swapalease are a great place to start.

Lease assumptions allow you to get into a great vehicle lease with low terms, no down payment and potentially lower monthly payments than what you could get at a dealer.

You can get yourself into a great vehicle lease with low terms, no down payment and potentially lower monthly payments than what you could get at a dealer. It is a way for you to drive a vehicle that you might not have otherwise been able to afford. In addition, there is very little negotiation. In lease assumption, it is an upfront process – the lease price is what you pay.

Back to the top