What happens at the end of my car lease
A big question that comes into consideration when choosing car lease deals is this ‘what happens at the end of my car lease?’ From personal car leasing, car leasing for business or when browsing car leasing, when looking to lease a car it can be confusing to know which lease is right to choose to let you do what you want at the end of a lease. Car leasing is a great way to enjoy all the benefits of modern and new cars without having to worry about the huge immediate price tags. Instead, a lease lets you drive a vehicle of your choice for as long as you want, making monthly payments. These range from short term hire to lease for a much longer time.
We pride ourselves on being the UK’s favourite car leasing site and want to let customers know about all the great options available to them. Choosing the right car and the right lease is all about knowing what you want. So read on and find out what happens at the end of your car lease.
What Happens at the End of my Car Lease ? Three things
Ultimately, there are three things that happen towards the end of your car lease:
- Buy out your lease
- Re-lease
- Return the car
As you can see, there are options to fit any potential lease, and often these are open to negotiation, but be sure to check a contract to see what you’re signing into before committing to a brand new car deal.
What happens at the end of my car lease Buy Out Your Lease
Often, leasing can act as a sort of long term buying scheme, over the course of a lease lasting anywhere between two and four years you can be given the option to purchase the car you’ve no doubt grown fond of over the past years of usage. How this buy out works depends on a number of things, but more often than not will be based around a pre-negotiated balloon price, or buy out fee. This is a similar route to if you’re considering selling the car on.
A balloon price is whatever the lease determines the leftover payment after the monthly fees are, considering at the same time depreciation, mileage and other factors that have been agreed at the start of a contract. The longer a contract, the more likely there will be a lower buy out price as you’ve paid more of the car back over the course of the lease. In the context of buying the car, this payment will make you exempt from worries such as car maintenance and depreciation costs.
When selling a car on, be it through a finance option by the company you have leased from or through your own methods, this balloon payment will still have to be paid, to either cover the depreciation cost of the vehicle or the remaining fee for the car. If when selling the money made is more than the balloon payment, you will get to keep either all or a portion of it as personal profit.
What happens at the end of my car lease Advantages of Buy Out
- You get to keep the car at the end of your lease
- Given more freedom regarding maintenance and mileage allowance
- Enjoy the benefits of ownership whilst avoiding large upfront payments
- Great way to buy a car if you don’t have the money straight away
- Can make a profit from a well kept car that keeps it’s value
- Making small manageable monthly payments towards car ownership
What happens at the end of my car lease Disadvantages of Buy Out
- The balloon payment can be more than the car if you’ve used it more than you expected to
- It can be more expensive than just hiring or purchasing straight away
- You may have to commit to purchasing a car when you may want to re-lease or give it back
Its’ clear to see a lot of the appeal of these sorts of contracts, and here at Car Lease 4 U we offer a range of leases that offer the buy out car option, or the purchase of a car through manageable convenient monthly payments. Here’s an example of the available leases for buying out your car.
What happens at the end of my car lease Business and Personal Contract Purchase
Contract purchases are one of our most popular leases here at Car Lease 4 U, and are great for their sort repayment schedule and flexibility at the end of the contract. How these contracts work for both a business and personal contract are very similar, with the exception that many business will be exempt for costs such as VAT and potentially road tax. When you’ve chosen a vehicle, you simply put down an initial deposit on the vehicle, which is normally three times the amount of your monthly repayments, and then pay back your agreed monthly payment.
The important part when considering buying your car is what is called the minimum future value aspect, which is essentially how much the car will be worth by the end of the lease. This is effected by the depreciation of the vehicle from the car value and also the arranged mileage and service agreements. This is what will ultimately be paid off at the end of a lease. As mentioned before, this means that you can buy your car from Car Lease 4 U. The monthly payments and deposit contribute to the remaining value of the car and the final value needs to be paid before the car becomes yours.
As mentioned before, with this contract you are also afforded the options to part exchange your existing car for another lease, sell it as a means to pay back the balloon payment or buy it outright and own your car fully. Or you can return the car if you no longer need it. At Car Lease 4 U, we aim to guarantee that the outstanding fee at the end of a lease with match the actual value of the vehicle, but this is obviously subject to circumstances agreed before entering into a lease.
Also available for a Car Lease 4 U buy out lease, where you own the car at the end are Hire purchase and Lease Purchase.
What happens at the end of my car lease Re-lease
Re-leasing is the option that allows you to trade in your current lease in exchange for a another car. This is a great way, as with buying at the end, to enjoy the benefits of a brand new car without the worry of large upfront fees. As many people do, you can enjoy having a new car every two to four years without the concern of paying such large immediate fees for it.
With a re-lease, you can also save money on your next lease. By making a part exchange, a car which has an excellent minimum future value and has been kept in good condition can help reduce future costs for your new vehicle. If you’re considering downsizing from a current vehicle that is more expensive and holds it’s value well of the leasing years this can make a significant dent in the next lease you take out, as the value of your current car will contribute to reducing costs of the next vehicle.
If you want to be able to drive a number of different cars over a much shorter time than it would take to save and straight up buy the cars then this is the option for you. This is a common and very popular option, as it means you can enjoy a huge range of vehicle that we at Car Lease 4 U offer, with the option to change to whatever your heart desires after the contractually agreed upon lease period. The upside of this is also that if you’re not happy with your current lease you can shop around other companies with your current leased car to find a better deal for a new car to fall in love with. Here at Car Lease 4 U we think you’ll be impressed by our range of cars on offer and our reasonably priced payment schemes, we will happily look at those offering a current lease car in exchange for our services and products.
Upon bringing a car in to re-lease, there are a few things to bear in mind. When giving the car to a lease company, they will perform an inspection to ascertain how much wear and tear has taken place on the car and how damaged the car may be. For this reason, it is important to remember that you do not necessarily ‘own’ a car you plan to re-lease, instead you are renting it from the company you have taken a lease out with. Another aspect to consider here is that different companies definition of ‘wear and tear’ differ from place to place. In this case it may be an idea to pay for any repairs and maintenance yourself in order to give your car the best chance of being give a high value on inspection.
What happens at the end of my car lease Advantages of Re-Lease
- Have the benefits of driving numerous different cars over a shorter period of time compared to buying
- Don’t have to worry about long term depreciation of vehicles
- Can save money on your next lease
- If you’ve taken good care of your car, can be offered a much better leasing deal from another company, letting you shop around
What happens at the end of my car lease Disadvantages of Re-Lease
- You never own the vehicles you lease
- Have to conform to more stringent maintenance agreements
- May lose money if you’ve not taken care of your car
- If you eventually want to own a car, can prove more costly than other methods of ownership
Overall, Re-leasing is an excellent way to drive a great range and variety of cars without having to pay incredibly high prices each time you wish to switch. With the relatively short period of a lease, you probably won’t suffer from significant loss of car value compared to car ownership, and providing you take good care of your car, you can get better and better leases as you progress.
What happens at the end of my car lease Return the Car
Possibly the most simple option, all that is required here is giving the car that you leased back to the company. These sorts of leases range in period of contract and type available, and resemble a long term hire much more than other end of lease options. Selecting this option you know where you stand immediately, returning the car and ending your lease. Most companies offer this as a form of the balloon payment, by giving them the car back they then receive the opportunity to sell it themselves or even lease it on. This is the perfect type of lease termination for those looking to use a car for a short and specific period of time.
There are still things to consider here though. As with the other options, the condition of the car you return is a high priority, even more so with returning the car. You can run the risk of having to pay the difference in car depreciation if you haven’t taken proper care of your leased vehicles, or incurring extra charges if you haven’t followed the conditions of your contract properly.
What happens at the end of my car lease Advantages of Car Return
- You know where you stand throughout all the contract
- Can be the cheapest option for leasing
- You needn’t worry about long term depreciation; once you’ve given the car back it’s done
- No concerns about debt once the lease has finished
What happens at the end of my car lease Disadvantages of Car Return
- A lot of contracts aren’t very flexible
- You never own the car, more like hiring it from the lease company
- It doesn’t help you save money on future leases or owning a car
- You can incur high costs through not taking care of the vehicle
As you can see, there are good and bad aspects to a Car Return lease finish. You’re given a clear and simple method of finishing a contract whilst also enjoying the benefits of short term car use and mobility. You can also enjoy a great range of vehicle offered on Car Lease 4 U, and enjoy the experience of driving a brand new car.
Overall, we hope that you’ve learnt a little more about what time your car lease finishes. Through the different options you can see there are benefits and disadvantages to both. The trick is to find out which one is best for you and make sure you pick the correct contract and restrictions for you.
What happens at the end of my car lease