For drivers considering a lease on a vehicle, or who currently have a leased vehicle, they should consider their rollover lease and turn-in options. These terms can make leasing a flexible option for driving a new car. Leases often allow you to benefit from lower monthly payments during the lease term, and have the ability to drive a vehicle during the newest years of its manufacturing. You also probably won’t get stuck with any major repair or maintenance bills. Each finance company has varying terms, but the options for turning in a leased vehicle are virtually the same.
One way to break clean from your lease at the end of its term is to turn in the car to an authorized dealer and just walk away. Walking away means you don’t enter into a new lease with the same dealer and you don’t decide to purchase the vehicle. If you’re planning on using this option, you’ll need to schedule an appointment to bring in the car for an inspection prior to the end of your lease term. At the appointment, the dealer will inspect your vehicle for excessive wear and the general condition of the car. It’s a good idea to have your car detailed inside and out before your appointment to avoid racking up additional charges.
If you really like the maker of your leased vehicle, you can turn in your current lease and enter a new lease for a different vehicle with the same dealer. You’ll also need to make an appointment to have your current lease inspected by the dealer for this option. However, many dealers offer loyalty incentives to customers who enter into a new lease upon turn-in. This could mean extra savings for you on your next lease agreement.
Purchase at Residual Value
Consumers also have the option of keeping a leased vehicle and purchasing it at the end of your lease term. The amount you pay to purchase your car is usually equal to the residual value of the vehicle when the lease is over. Most dealers estimate the residual value when you begin your lease, so take a look at your original agreement to see the dealer’s estimate. You can finance the residual value amount, or pay cash. You won’t need to schedule an inspection for the vehicle when you choose this option because you’re buying the car instead of returning it to the dealer.
Excess Wear and Mileage
The downside of any lease is the potential for excess wear and mileage. If you drive a lot, you could get stuck paying for extra miles you put on the car during the lease. Most leases have a maximum allowance of 10,000 to 15,000 miles per year. If you exceed the mileage terms of your lease, you’ll have to pay between 10 and 25 cents per mile, for example, when you turn in the car. Each finance company imposes separate excessive wear clauses, but you could be charged for excessive scratches or dents in the exterior paint, old tires, broken headlights and chips or cracks in the windshield. You’re subject to excessive wear charges unless your lease agreement allows a waiver or exclusion from specific types of wear. If you decide to purchase your leased vehicle, you won’t be subject to any extra mileage or wear charges.
Lease rollovers aren’t as popular as other options because this involves rolling over negative equity or extra charges into a new lease, which can make new lease payment higher or new lease terms longer than average. Negative equity exists when you don’t keep your leased vehicle through the length of the agreed term. You're still responsible for the payments of your old lease term, so whatever balance remains on your lease is rolled over into your new lease. For example, if you want to cut out of your current lease, but still owe $10,000 on the term, the $10,000 is added to the amount of the new lease, plus the amount of any early termination penalties that may be assessed. Some dealers will allow you to rollover excess mileage or wear charges from your current lease to the balance of a new lease. This option allows you to pay the charges over time, instead of when you turn in the vehicle, but your monthly lease payments for the new vehicle will be higher.
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