What happens at the end of a car lease?

Your car lease agreement likely requires you to pay a fee or two at the end of your car lease. These fees are related to what you choose to do when your lease ends. If you hand your leased vehicle back to the leasing company, you will likely pay one fee, and if you purchase your leased car, you will probably pay a different one.

How can I Return my leased car to the dealership?

Turn in your leased vehicle and lease again. Buyout your lease and keep the car. In order to return a leased vehicle to a dealership that your lease didn’t originate from, the dealer has to have an agreement with your lessor. In most cases, this is a captive lender, but it could be a bank or independent leasing company.

What are the problems with an auto lease?

One of the central problems with auto leases is that they put you into a perpetual state of zero or negative equity in your car. Though the lease is secured by the car you’re driving, you have no collateral to back up the loan because you don’t own the vehicle securing the lien on it. The dealer has both your note and ownership of the car!

When to trade in a leased car to another dealership?

One of the only times to consider an early lease trade in from another dealership is if there’s equity in your leased vehicle. This doesn’t typically happen, but in some cases, the residual value of the leased car is more than what you owe on the lease.

You agree to pay a certain amount per month, and the dealer hands you the keys to a car that you get to use for a certain number of miles and a certain period of time. At the end of the lease, you simply turn the car back in and never have to worry about resale value, maintenance, or costly repairs.

Can you get out of a car lease early?

Customers are usually surprised by the high cost of ending a lease early, often expecting to only have to pay a small “penalty” fee. Since car leasing is not like car renting, you can’t simply return your car to the lease company and walk away. Leasing doesn’t work that way and it’s definitely not the way to break a lease.

Do you have to pay residuals when leasing a car?

If you need a little more time after your lease is up to figure out what your next car should be, most leasing companies will allow you to keep the car on a month-to-month basis. Doing so will give you more time to make your next move, but be careful. If you end up deciding to buy the car, you’ll still have to pay the original residual.