Keyes Woodland Hills GM: My Lease Is Up? Now What???

So, you're lease is coming to a close.  You've made your last lease payment and haven't figured out what to do.  This is normal.  A lot of people wonder what kind of options there are.  If you're thinking about leasing your next car, this will be helpfull to you as well.  One of the common myths about leasing is that you're renting the car.  You're not and we're going to show you why.

When your lease is up, you have three options:

1.  Buy it.

2.  Sell it or trade it.

3.  Turn it in and start fresh.

Let's take a look at each option in a little more detail.

Option 1:  Buy it. 

Leasing is really just another way of financing.  When you lease a car, the bank handling the lease will assign a residual value to the lease.  The residual value is what the car will be worth at the end of the lease and it is a percentage of the MSRP.  For example, let's say you're going to lease a car that has an MSRP of 30,000 and the residual is 50%.  That means at the end, the bank believes the car will be worth 50% of it's original value or 15,000.  If you've enjoyed having this car and want to keep it, you can then buy it from the bank for this set residual value.  You have the option of paying cash or you can finance it.  It's up to you.

Option 2:  Sell It/Trade It.

Folks, this is your car.  You own it and you're responsible for it just like a traditional car loan.  When you finance it, who holds the title until you're done paying it off?  The bank, right?  Same thing here.  When you're leasing it, you have the option to sell it or trade it at anytime.  The question is, as you approach the end of your lease, should you?

First, you want to find out what your car is really worth right now.  The best tool for that currently is on AutoTrader.com.  They have a tool that will provide you with a Guaranteed Trade In Offer. 

Once you know what your car is worth, compare that number to the residual value.  Remember in our example, the residual was 50% or 15000.  If your car is worth 17000, you have 2000 in equity that you can apply to your next deal by trading it in or you can sell it privately and pocket the money.

But what if the value is less than the residual?  Well that leads to option # 3 or if you've already decided to buy it, who cares what it's worth?  It's your car and you love it!  Just continue to enjoy it.

Option 3:  Turn it in and start fresh.

Believe it or not there are alot of people who like to get a new car every 2-4 years.  If you're like that, if you don't drive a lot of miles (15000 or less), and you, like me, have resigned yourself to having a car payment for life, then leasing is the best way to go for you.

If you have questions about what to do at your lease end, feel free to contact the Internet Department at here at Keyes Woodland Hills Buick GMC Cadillac or leave a comment below.

We're always willing to help.  As you're neighborhood dealer, we're committed to straight answers with out the old school haggle.

Your Internet Department is:

David Bradley, Charlie Nicgorski and Lilia Murillo
800-691-4920