Five Lease-End Myths That Cost People Money
Common beliefs about returning, buying and extending a lease that sound right but are not always true, with the checks that settle each one.
Most lease-end mistakes are not about math. They come from something a friend said, or a half-remembered line in a dealership. Here are five common beliefs and a way to test each one.
Myth 1: "The buyout price is a fixed number everyone pays."
The residual in your contract is fixed, but your total cost is not. Fees, taxes, and the date of payoff can all change the amount. Ask for the full figure in writing, with a good-through date. We discuss the date issue in Check the Good-Through Date.
Myth 2: "If I go over my miles, I have to return the car and pay."
Overage charges apply to returned vehicles. If you buy the car, you generally are not paying a per-mile penalty. High mileage may still reduce what the car is worth, so check both. Try the exercise in Over Your Miles? Do the Math Both Ways.
Myth 3: "Only a dealership can buy out my lease."
Depending on the leasing company, you may be able to purchase the car yourself, with or without outside financing. Policies differ, so ask your leasing company and don't take this myth or its opposite on faith. See our post on third-party buyouts.
Myth 4: "Equity only counts if I sell the car."
Positive equity has value even if you keep driving. You are paying less than the car would cost to replace, which can matter when used prices are high. Whether it is worth taking depends on the full comparison, covered in our residual and market value post.
Myth 5: "Turning in the keys ends my responsibility."
You are still on the hook for any charges found at inspection, and a disposition fee may apply. Keep your return receipt, take photos, and watch for the final account statement. Our wear and tear guide explains how to prepare.
A habit that beats every myth
When someone makes a confident statement about your lease, ask, "Where is that written?" The answer is almost always in your contract, your lease-end letter, or your state's rules. If nobody can point to it, treat it as a rumor.
Champion Auto Finance
Thinking about buying out your lease? Learn more and get started at championautofinance.com, or ask Joe a question.
More from the blog
- Add-Ons Offered With a Lease Buyout Loan: GAP, Service Contracts and Saying No
- Wear-and-Tear Charges vs. Buying Your Lease: What the Inspection Decides
- The Odometer Statement You Sign When You Buy Your Leased Car
Champion Auto Finance is a NJ DOBI-licensed financing partner, not a lender, coordinating lease buyout financing for drivers nationwide. Approvals and terms are subject to lender underwriting. Nothing on this site or in these episodes is legal, tax or financial advice.