Is it smart to buy your leased vehicle at the end of the lease?

Question

If I finance it over 4 or 5 years, but decide to sell/trade it in in after 2 or 3, what are the ramifications?

Answer 1

Not normally. It really depends on you LEV(residual value). Let's say your LEV is $15,000 and you see the same vehicle advertised for sale for $12,000 you wouldn't want to buy your vehicle, you'd want to turn it in. However, if your LEV was $12,000 and the same vehicles were selling for $15,000 then you might want to buy your vehicle at the end of your lease. I would never buy a vehicle at the end of a lease especially since you leased yours for 4-5 years. Especially if you had to finance the balance you owed after your lease. The reason is you would still be financing a vehicle that is 8,9, or 10 years old.

As for trading it in after a couple of years or before your lease is up---You can do it and there are no penalties. But, most likely you will owe more on the vehicle than it is worth(upside-down). Many people do this and finance a new car conventionally. If you do this I would suggest you purchase GAP insurance to protect yourself if the car was totalled or stolen. GAP insurance pays the difference in what you owe on a vehicle and what the actual cash value is of the vehicle. Example---You owe $35,000 on a 2005 Chevy Tahoe 4x4 LS. You get in an accident and your Tahoe is totalled(it doesn't take much to total a vehicle these days) Your insurance company may only want to pay $25,000, you would still owe the bank $10,000! GAP insurance pays the difference.

Hope that helped!

Answer 2

There are so many variables to consider. Generally if you tend to change cars often, then leasing is usually the best option, unless you drive huge annual mileages. It is usually best not to buy at the end of the lease, but you would need to compare market value with what your payment would be.

If you finance over 4 or 5 years and trade before the finance agreement ends, then you would need to pay off the balance of the loan from the proceeds of the sale. Usually the dealer will arrange this so that he is sure there is no lien on your old vehicle. There again you need to check the trade-in value compared with what you still owe on the finance. There could be a penalty for ending your finance early, but unlikely. You would need to check the small print.

Hope this helps.

Answer 3

i lease cars all the time you need to decide if you took care of the car your mileage damage and what is the buyout i am coming up on the end of a lease now Chrysler offered me a hell of a buyout after a 36 month lease I'm keeping it but alot of people think its not my car i am just giving it back i at the end of the lease if you did this give it back i have a friend that has not changed the oil on a lease for 48000 miles now he is returning the car but if you took care of the car and you don't want a new car keep it but see what the buy out is and see if you could find the same car same mileage same options and see how much it is being sold for............good luck

Answer 4

I have leased and later bought 2 cars because they were dependable and I liked what I had. One was a Mustang GT I kept 12 years. The money end of doing this is stupid. But I kept what I wanted and what I knew. Once they started to give trouble, that's when I went shopping again.

Answer 5

You will have your new loan topped up by your old loan unless you pay what you owe them .i.e the remainder on the lease payments ,then you can start afresh..

Answer 6

why buy a used car?....remember you can go lease another brand new one...or buy brand new and don't lease..then again i refuse to deal with dealerships,there all rip offs

Answer 7

So after two or three years, you will "sell it in" to the people that own it?

Answer 8

Hellz No

Answer 9

No.