If you are lucky, you know what it’s like to truly love a car. A car that you don’t want to give up, a car that’s really been there for you. But what do you do if that car happens to be a leased car? How are you supposed to give up a car like that?
Well the good news is you don’t. In fact, most leases prepare for this and will allow you to buy your leased car at the end of the term. But what’s the best way to do this? Is there a smart way to buy your leased car?
At the end of a car lease you have three options. You can return your lease for a new lease, you can return your lease and walk away, or you can purchase your leased car.
This is a great option if you are ready for a new set of wheels and like the ease of leasing. As long as you have not gone over the mileage limits and do not have excessive wear and tear, you can get a new lease easily.
You are under no obligation to keep leasing if you decide it’s not right for you. Maybe you like owning your car so that it is truly yours. Maybe you don’t like abiding by all of the rules. Whatever the reason is, leasing is not for everyone. And that’s why it might be a good idea for you to return your car and walk away.
At the end of the lease you will be able to purchase your car (in most cases anyway). There are a few reasons why this might be your best option:
You like your leased car and don’t want to part with it.
You have gone over the allowed mileage and will owe a lot in fees.
You have excessive wear and tear and will owe a lot in fees.
Your car is worth more than the purchase price.
If any of the above apply to you, it might be worth considering purchasing your leased car.
What if you love your leased car but don’t have the cash to buy it? Enter the car lease buyout loan. These loans can help you to purchase your car from the leasing company.
To get a car lease buyout loan you will need to make sure your credit score is in good shape and that you are a desirable loan candidate. Contacting a company that specializes in car lease buyout loans can help ensure that you will get the best loan possible.
To prepare yourself for your loan application, here are some of our top tips:
Request a copy of your credit report to ensure everything is correct.
Request higher credit limits to your accounts to boost your credit score.
Resist opening any other new accounts during this time.
Be sure you are paying all of your bills on time and in full (especially your car lease payment).
Gather documents you will need for your applications, including proof of employment, proof of insurance, identifying documents, and your current lease agreement
It is typically more difficult to get approved for a lease than it is for financing. Chances are if you were approved for a lease you will have a good chance getting approved for financing. But it is always a good idea to try to get your score in its best shape possible before applying for a loan. The best interest rates and terms are reserved for those with excellent credit scores.
So, how do you buy your leased car? It’s actually really easy, just follow our steps below.
Your car lease buyout price will be listed in your leasing agreement. The price will be the residual value (which is predetermined and listed in your leasing contract) plus any taxes and fees. If you are unsure about the exact price you can reach out to the leasing company to get a total. The residual value is based on the expected depreciation over the life of your lease.
You will next need to determine what your car is worth. The best way to do this is to use a website such as Edmunds or Kelley Blue Book. These sites will look at your car’s make, model, year, mileage, and overall condition to determine the market value.
If your car is worth more than the purchase price it is definitely worth considering a loan buyout. You can always sell your car privately and keep the profit if you aren’t crazy about your car.
If on the other hand the purchase price is much higher than what the car is worth, it’s not a good idea to purchase the car. You may not get approved for a loan in the first place, and you would be better off buying the car used somewhere else.
But if you decide that it is a good idea to purchase your car and the numbers add up, you can start shopping around for financing deals.
If you decide to get a loan it is imperative that you do your homework and shop around. You can even use a company that specializes in car lease buyouts. They can help you find the perfect loan for your situation and even help you with the pesky paperwork.
You should apply with 3-5 different lenders to give yourself the best chance at getting a loan with good terms. Be sure to apply for these loans within the same two week window so that they will count as one hard inquiry on your credit report. When the offers come in you should compare the following:
The interest rate
The repayment period
The prepayment penalties
The customer satisfaction ratings (look online for these)
All other fees and terms
Pay careful attention to the fine print in these contracts. Additional fees and prepayment penalties may affect your ability to refinance in the future.
When you find the loan that’s right for you, you can sign on the dotted line and finally own the car you love (well, almost). The lender will send a check to the leasing company and they will hold the title until you complete your payments. And that’s it!
The smartest way to buy your leased car is to use a company that specializes in car lease buyouts, like Auto Approve. While the above process isn’t too complicated, it’s always good to have an advocate on your side that can help guide you through the buyout process. Auto Approve doesn’t charge you fees or mark up your loan (meaning there’s no downside to using Auto Approve).
Auto Approve will help you pick the right lenders, apply, and choose the loan that is best for you. After you decide which loan is right for you, Auto Approve will even help you with all of the finalizing paperwork (including the pesky DMV papers).
Buying out your lease with Auto Approve will also allow you to bundle GAP insurance and a vehicle protection plan with your monthly payments so that you can fully protect the car you love. And these added benefits can really help you.
GAP insurance acts as a bridge between your loan and your car insurance payout. If you are in an accident and your insurance will not cover the total that is left on your loan, GAP insurance will kick in so you are not on the hook for the difference.
Vehicle protection plans can help protect you from, well, life. These plans can help cover a lot of problems that can pop up, such as engine trouble, transmission problems, suspension issues, etc. On top of that, an Auto Approve vehicle protection plan comes with 24/7 roadside assistance, rental car reimbursement, and your choice of certified mechanic.
But you don’t have to just take our word for it. We have a 96% would recommend rating on LendingTree and a 4.7 out of 5 star rating on TrustPilot that tells you just how satisfied our customers are.
When it comes to buying your leased car the smart way, the answer is simple. So if you have a leased car that you aren’t ready to part with, contact Auto Approve today! Our experts are ready to help keep you in the car you love. Get your free quote today to get started!