With the end of your auto lease just around the corner, you’ve got some decisions to make. But before you start stressing about your current mileage or scratches on the bumper, you may want to think about buying out your lease. Would it make more sense to keep your car instead of turning it back in like you originally planned? In many cases, yes.
There are numerous benefits to buying out your lease—but first, a word of caution: Traditionally, dealerships have taken a hands-off approach to the buyout process, allowing consumers to deal directly with the corporate finance department or the leasing company. However, optional insurance and warranty products have given dealers an opportunity to increase their profits by facilitating the buyout process and including add-ons. These extras can come with a steep markup, making the final price more expensive than it should be.
Before agreeing to any buyout terms, it’s important to remember a credit union can routinely offer lease buyouts with lower rates and convenient payment terms. It’s worth your time—and potentially a lot of money—to get details on the financing options available.
Still wondering whether a lease buyout is right for you? Here are five points to consider:
- Ownership has its advantages.
Let’s be honest—the peace of mind that comes from not worrying about mileage overages and wear-and-tear penalties is a big deal. When you own the car outright, you no longer have to feel that growing sense of dread commonly associated with the end of a lease term.
- Car shopping is a hassle.
You’ve already gone through the frustrating highs and lows of car shopping. Why do it again? You probably selected your car after a thorough process of weighing pros and cons. If it was the right car for you then, there’s a good chance it’s still the right car for you now.
- Better the used car you know (than the used car you don’t).
This may seem obvious, but you’re already familiar with your car. If you had to start shopping for a different used car, there would be questions about how the previous owner cared for it. If you buy out your lease, you ARE the car’s previous owner. There are no unanswered questions about the car’s maintenance history or other people’s driving habits.
- No more guessing games.
At their core, auto leases are all about variables. A car’s market value ebbs and flows based on supply and demand. Lease rates may be higher the next time you come to the end of a term. By opting for lease buyout loan, you can lock in a great interest rate and a convenient payment plan for the life of your loan.
- You have more leverage than you realize.
Have you ever thought about what happens when you turn your car back in at the end of your lease? The leasing company is left with a used car, and they’re not in the used car sales business. In many instances, they would rather negotiate a good buyout price with you than go through the trouble of selling the car at auction or to a dealer.
Ready to look into a lease buyout?
*APR = Annual Percentage Rate. Not all applicants will qualify, subject to credit approval. Additional terms & conditions may apply. Actual rate may vary based on credit worthiness and term. A First Financial membership is required to obtain a First Financial auto loan and is available to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties. See credit union for details. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account/loan. Federally insured by NCUA