Your auto lease gives you a right to buy the vehicle for a fixed price at the end of the lease. But should you? If you have less than three months remaining on a lease, now's the time to decide. So, find your lease and read on.
- Do you like the car? If it's performed well with a minimum of unexpected cost and repair, then it might be good to renew the lease.
- Will it still fit your needs? If you're driving a 2-door sports coupe but are expecting a baby, you probably need a new car.
- What is your lease-end buying price? You'll find the purchase option price in your lease. Let's assume it's $20,000.
- What is your vehicle actually worth? Check websites such as Kelley Blue Book and Edmunds.com. Let's assume your highest wholesale value is $21,000.
- How does your vehicle's wholesale value compare with its lease value? If it's higher than the lease value, then it's a good deal. In our example, your lease says you can buy for $20,000. You've confirmed wholesale value is $21,000. You're buying a car you know and like for $1,000 less than its wholesale value. Buy the car.
- What if the wholesale value is less than the lease value? If it's a lot less, don't buy the car. It doesn't make sense to buy the car if your lease's buy-out price is $20,000, and the car's wholesale value is only $17,000.
- What's the bottom line? If your lease car is a good friend, and you can buy it for no more than $1,000 over wholesale value, that's a smart buy. Your next smart decision is to finance it at Extra Credit Union.
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