Intro to "Calculate Your Car Lease-End Options"

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Buying a Vehicle vs Returning it

For a lessee (renter), the end of a term on a car lease means it is time to make a decision regarding the vehicle, and its residual value written on the contract. There are four different actions the lessee can take on the vehicle at the end of a term; buy it, return it, trade it, or extend the contract if the owner allows it.

Depending on the equity on the vehicle, the options are between two opposite choices: buying the vehicle or returning the vehicle. Trading it in is an option that arises from its purchase, and the extension of a contract has a neutral effect and only extends the current situation.

Note that the lessee has an important choice to make at the end of his lease, depending on whether he has an open or closed end lease. In the case of an open lease, the lessee guarantees the value of the vehicle at the end of the term, meaning that he needs to keep the vehicle in the expected condition after a certain period. In the event that the vehicle is not worth what was established originally in the agreement, due to over-use, he will have to pay for the difference. However, if the equity is positive, if the millage and wear and tear are lower than expected, he will receive a check in return.

With this calculator, we can compare side by side the different financial consequences between buying and returning a vehicle at the end of a lease. You can calculate the potential profit or loss with the two options when entering the specific data for the vehicle and the type of lease. Therefore, you will be able to put a financial value on the two options and compare them, helping you orient your choice and decision at the end of your lease.

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