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How To Convert A Car Lease Into A Purchase

If you want to know how to convert a car lease into a purchase, then you have arrived to the right place as this article will guide you through what must be taken into consideration when deciding to buy the car that you’ve leased.

Let’s start with the most common situation which is buying the car at the end of the lease. Some of the reasons why many opt for this are:

a) they know the vehicle’s full mechanical history and know the reliability of the car;

b) the buy-out price tag in the contract makes buying an excellent deal;

c) they don’t want to start looking all over again for a new car and worry about a new lease;

d) they have exceeded the number of miles they were allowed to drive the car and don’t want to pay for the penalties;

e) the car has excessive wear & tear and the drivers want to avoid paying the penalties.

Without any doubt, the simplest way for you to purchase the vehicle is to have a look at its residual value that is written in the lease contract. Once you find this figure out, you can check Edmunds.com or KBB.com to find out if the price is fair and if it is, you should make the deal. If it’s not, you shouldn’t walk away immediately as you can always try to negotiate and obtain a lower price. You can do this because in most cases the leasing companies do not really want the car back and this means that they are more flexible as far as lowering the price tag.

Your adventure starts from calling the phone number which is listed on the monthly payment slip and most likely you’ll reach an automated phone menu. One of the many choices you’ll hear is for “lease end options” or something like that. After you start talking to a human being, you need to tell him/her that you wish to find out the “buy-out amount” for your leased car. This amount is going to be a little bit different in comparison to the residual value as they’ll deduct the security deposit you’ve made. Keep in mind that if you call them a couple of months before the end of your lease, they’ll tell you the buy-out amount for that date.

Most likely, you will want to negotiate the buy-out amount and in order to do so you will have to discuss to a person that has the authority to make such a deal. It is highly recommended that if you want to negotiate the price you should have a pre-established figure in mind which will serve as the starting point of the negotiations.

To figure out this number, you’ll have to assume that the leasing company will take the following actions once you return the car:

a) allow a dealer to put the vehicle for sale as a used car;

b) ship the vehicle to an auction and accept the wholesale price.

If they opt to ship the car to one of those auctions they will have to pay to hire an auto transport company in order to move the car, and accept the bid. The price tag will probably be considerably lower than the car’s residual value which needless to say, puts you in a very good position to negotiate. In addition, more and more people are leasing cars and as a consequence, there are lots of vehicles coming off lease and this has lead to a significant decrease in prices.

After you have figured out the starting point for the negotiations, you will have to give a call to the leasing company and make an offer. They will either ignore you or come up with a counter-offer. Regardless of what they choose to do, make sure that they write down your number and maybe they’ll call you back in a while.

When you are talking to one of the representative of the leasing company, avoid mentioning that you have exceeded the mileage limit or that the car has excessive wear & tear because if they know this, they’ll most likely ask for more money.

Some leasing companies also offer the possibility to buy the leased car before the contract ends. However, in most cases it would be better to wait until the lease is over and make an offer.

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