Buying a Leased Car Before Lease Ends: How to Do It and What to Watch Out for

shane on October 24, 2024

Buying a leased car before the lease ends can be a smart move, especially if you’ve grown attached to the vehicle or if it offers a favorable buyout price. Here’s a comprehensive guide on how to make the process smooth and what to keep an eye out for.

Can You Buy Your Leased Car Before the Lease Ends?

The short answer is yes! When you buy your car before the lease ends, it can save you money in the long run. If your vehicle’s market value is higher than the buyout price, you’re essentially getting a good deal. Plus, you’re already familiar with the car’s history, maintenance, and condition.

How to Buy a Leased Car Before the End of the Lease

Review Your Lease Agreement: Start by examining your lease contract to understand the terms and conditions related to early buyout. Look for the buyout price, fees, and any stipulations.
Check the Buyout Price: The buyout price is usually a combination of the car’s residual value plus any remaining payments and fees. Compare this price with the current market value of the car to see if it’s a good deal.
Get Financing: Unless you plan to pay cash, you’ll need to secure financing. Shop around for the best interest rates from banks, credit unions, or the leasing company itself.
Inspect the Car: Before making a purchase, inspect the vehicle thoroughly. Even though you’ve been driving it, an inspection can help identify any potential issues that may cost you down the line.
Complete the Paperwork: Once you’ve agreed on a price, you’ll need to complete the necessary paperwork. D&M Auto Leasing will guide you through this process to make it easy and give you what you need.

What to Watch Out For

Hidden Fees: Some lease agreements may have hidden fees for early buyout. These can include administrative fees or penalties for not completing the lease term. At D&M Auto Leasing, we’ll walk you through everything included on the lease so there are no surprises.
Market Value Fluctuations: The car’s market value can fluctuate, so it’s crucial to do your research. Check reputable online sources to get an accurate estimate.
Financing Terms: If you’re financing the buyout, be aware of the interest rates and loan terms. A high interest rate can offset the savings from a good buyout price.
Condition of the Car: Any wear and tear beyond what’s considered normal can affect the buyout process. Ensure all maintenance is up to date and that there are no major issues.
Negotiation Leverage: Use your research as leverage when negotiating. If the market value is lower than the buyout price, don’t hesitate to point this out to get the best deal.

Conclusion

Buying a leased car before the lease ends can be a great option if done correctly. By following the steps outlined above and being aware of potential pitfalls, you can make an informed decision that benefits your wallet and keeps you behind the wheel of a car you love. Happy driving!

The Pros and Cons of Making a Down Payment on a Car Lease

shane on September 27, 2024

When it comes to leasing a car, one of the most common questions is whether or not to make a down payment. This decision can significantly impact your leasing experience, so let’s explore the pros and cons to help you make an informed choice.

Pros of Making a Down Payment on a Car Lease

  • Lower Monthly Payments: One of the primary benefits of making a car lease down payment is that it can reduce your monthly payments. By paying a portion of the lease upfront, you decrease the amount financed, leading to lower monthly costs.
  • Reduced Interest Charges: Although leases typically have lower interest rates compared to loans, making a down payment can further reduce the interest charges over the lease term. This is particularly beneficial if you have a higher money factor (the lease equivalent of an interest rate).
  • Increased Approval Chances: If you have less-than-perfect credit, making a down payment can improve your chances of getting approved for a lease. It shows the leasing company that you are committed and financially stable.
  • Equity in Case of Total Loss: In the unfortunate event that your leased car is totaled, having made a down payment can prevent you from being upside down on the lease. This means you owe less than the car’s value, which can be a financial relief.

Cons of Making a Down Payment on a Car Lease

  • Upfront Cost: The most obvious downside is the initial out-of-pocket expense. Leasing is often attractive because it requires less money upfront compared to buying. A significant down payment can negate this advantage.
  • Risk of Loss: If your leased car is stolen or totaled early in the lease term, you might not recover the down payment. Unlike loans, where the down payment reduces the loan balance, in a lease, it primarily lowers the monthly payments.
  • Opportunity Cost: The money used for a down payment could be invested elsewhere. When you lease cars with no down payment, you can keep your cash liquid for other investments or emergencies.
  • Minimal Impact on Total Cost: Making a down payment on a lease doesn’t significantly reduce the overall cost of the lease. It merely shifts when you pay the money. Whether you pay upfront or monthly, the total amount paid over the lease term remains similar.

Do You Need a Down Payment to Lease a Car?

The short answer is no, you don’t need a down payment to lease a car. Many leasing companies offer deals that require little to no money down. However, if you have bad credit, a down payment might be necessary to secure the lease.

What Happens to the Down Payment on a Leased Car?

When you make a down payment on a leased car, it is applied as a capitalized cost reduction. This means it reduces the amount you finance, lowering your monthly payments. However, it doesn’t reduce the overall cost of the lease.

Whether or not to make a down payment on a car lease depends on your financial situation and priorities. If lower monthly payments and increased approval chances are important to you, a down payment might be beneficial. However, if you prefer to keep your cash liquid and avoid upfront costs, you might opt for a lease with no down payment.

At D&M Auto Leasing, we offer flexible leasing options to suit your needs. Contact us by phone or quote form to explore our lease deals and find the perfect car for you!

Dallasites: Own a 2016 Ford Fusion Today!

chris on July 8, 2016

Interested in getting behind the wheel of a superior midsize sedan? The Ford Fusion SE Hybrid is taking traveling to a whole new level. If you’re ready to experience fuel efficiency, speed, and safety all in one car, you need the Fusion SE Hybrid. With performance that surpasses the competition, all without using fuel, don’t be surprised when you see heads turn. With features and amenities that will spoil you rotten, there’s nothing you won’t love about driving this Ford. Ready to make the jump? Check out our select 2016 Ford Fusion SE’s available now!

Why You Will Love the 2016 Fusion SE

Reviewers love the Ford Fusion SE’s smooth drivability, quiet cabin with adjustable headrest, tilt and telescoping wheel, and convenient controls. Advanced technology and safety features include: backup camera, heated mirrors, exterior keypad entry, rear air ducts, a six-speaker sound system, satellite radio, and adaptive cruise control. In addition to its features, the Fusion SE’s sleek exterior is a refreshing breakaway from the commonly modest exteriors of competing sedans.

Real Comparisons. Real Savings.

We compared the D&M Auto Leasing’s offer to the Kelley Blue Book Fair Purchase Price. For a direct comparison, we matched our 2016 Ford Fusion in Ingot Silver with charcoal interior with the same exact model on Kelley Blue Book. For the same exact vehicle with $2,080 down for 72 months, Kelley Blue Book prices a fair monthly payment at $418.

At D&M Leasing, we offer ours for $285 per month! D&M Leasing also offers 1.9% APR, versus Kelley Blue Book’s 3.69% estimate.

Always get the best car deal with D&M Auto Leasing! Check out our available 2016 Ford Fusion SE’s today!