Leasing a new car was exciting and you enjoyed driving it, but the expiry date is coming close. You will need to determine whether to buy or return the leased car. The decision is subjective. You want to return the car and instead of leasing the next set of wheels, you are planning to choose a pre-owned vehicle this time. Or, maybe you were emotionally attached to the car and desire to keep it.
The reason you opted for a car lease is generally to enjoy the thrill of driving a new set of wheels every time. From Lease a Car Direct company you got the car of your dream on you’re the doorsteps of your home in South Florida. The leasing firm did the hard groundwork and got you great leasing terms and deals. Now, it is the decision time —-buy or return on lease expiry.
Things to consider
Consider the asking price offered by the leasing firm. Purchasing the existing car can be beneficial. For example, you know the history of the car and this is an advantage on pre-owned car buyers hardly have. You are a meticulous driver, who has taken proper care and maintenance. The car is in excellent condition, so you will be fully aware that the car you will buyback is in great shape.
Paradoxically, a buying decision is also advantageous if you had abused the car. The majority of lease terms include charges for unusual depreciation of the vehicle. It shows up during car inspection, so keep the car to avoid that extra expense.
If extra mileage is involved then it is wise to purchase the car, when the lease expires. The car leasing contracts include an annual mileage allowance, which is limited. If you add more than there are fixed rates for those extra miles.
Do the math
Many lease agreements have a written buyback price. It is the amount of cash you will need to pay if you desire to buy the car. The buyback price is a leasing sector twist, which is oddly determined before the lease starts.
The reason is to decide your monthly payments after evaluating how much depreciation will occur during the contract. The monthly outlay is the car’s sale price minus the residual value [based on the lease time] divided by the month’s number.
If you bought a new car for $25,000 and the residual price after 3-years is projected to be $15000 then this is the amount considered to determine the payback price. The prediction of buyout price differs, so before you decide to buy the leased car compare the buyback price [in your contract] with the car’s current resale value.
Now, here too there is a twist. If the buyback price is $20,000 and the same car at a private seller worth $19,000 then many people will think that they know this car well, which can make up for a little inflated pricing. If there is a mileage charge of say $1,300 [you need to pay $21,300 as buyback price] the decision gets easier. Buying same car would cost $20,300, which is less than the buyback price.