Car Lease Buyouts In Canada: Good Idea or Not?
Car Lease Buyouts In Canada: Good Idea or Not?
Posted on May 27, 2022
It’s customer question time again and this time it’s something we don’t come across all that often, namely, ‘What’s a car lease buyout and are they a good idea?’
A customer asked our Cambridge auto loan team this question the other day and this is what they said.
What’s a car lease buyout?
A car lease buyout is where you have the option to buy the car you have been leasing at the end of the contract. It’s similar to when you’re offered your company car at the end of the lease.
The leasing company will sometimes offer the car for purchase at a decent price. It’s then up to you to decide whether you want to own the car or get another lease.
The purchase process would be the same as buying the car from a dealer, only this time you know the car and know how it has been treated. You also know it’s history, it’s service and mechanical history and pretty much everything about it.
You may even have formed an emotional bond with it, which can make a genuine difference.
You do need to look out for a couple of things though.
The offer price
Some leasing companies will offer competitive prices for old lease cars, some not so much. The vast majority will be disposed of at auction, which makes very little money for the company. Even offering the car to you at a bargain price can often make them more.
If the car’s price is good, consider buying it. If it isn’t so competitive, think carefully.
You can get a good idea of a car’s value at Kelley Blue Book.
End of lease fees
Some leasing companies will waive some or all of the end of lease fees if you buy the car. If you buy it, they don’t have to have the car reconditioned or take the hit for excess mileage or minor damage.
If the leasing company is willing to waive these fees if you buy, it may make the deal better. Much will depend on whether you’re in for any fees or not.
Those fees can include excess mileage, wear and tear fees, disposition fees and others.
Can you use an auto loan for a lease buyout?
You can use a Cambridge auto loan to buy your lease car. As long as the leasing company is willing to accept it as a payment method, there should be nothing stopping you using an auto loan to pay for the car.
You’ll have to go through the usual checks and qualification criteria but the process is quick, easy and painless.
Only you can decide whether to buy your old lease car or not. It can make a lot of sense for some people but not so much for others.
If you do need a Cambridge auto loan to pay for it, that’s where we can help.
When you’re ready for a car lease or loan, get in touch with the Cambridge auto loan experts at Northway Ford for great deals on auto finance.
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