388 King George Rd, Brantford, ON, N3T 5L8
My Garage

Are Lease Buyouts a Good Idea In London Ontario?

Are Lease Buyouts a Good Idea In London Ontario?

When your car lease is almost up, you may be offered the opportunity to buy the car. Should you? Is it a good idea? How can you finance it? Our London auto loan team explains your options when it comes to lease buyouts.

 

Some leasing companies include the optional buyout option in your contract. They may even put a value on the car from the outset. Other companies will provide a formal offer towards the end of the lease.

 

Either way, many leasing companies will offer the chance to buy the car at the end.

 

Are lease buyouts a good idea?

 

Whether a lease buyout is a good idea or not depends on how much you like the car and the buyout offer. If you like the car a lot and could see yourself driving it for the foreseeable future, it may be a good idea.

 

Everything depends on the buyout offer though.

 

The buyout offer is based on the car’s residual value. How much it will be worth with the current mileage and condition. Many leasing companies will make fair offers while others not so much.

 

Before you say yes, perform some research to see the current value of the car.

 

Make sure to check the exact make, model, trim and colour of the car. Try to get as close to like for like as possible. Check online car sales websites, check Kelly Blue Book, check everywhere that sells used cars.

 

Then ask the leasing company for a condition report which is due at the end of a lease. That report will assess the mileage and condition of the car and outline any charges the company will levy against excess mileage or excess wear and tear.

 

Use the value and any potential reconditioning charges to assess whether the offer is a fair one or not.

 

If the buyout offer is slightly above market value, it may not be a good deal. If it’s above market value but you’re liable for a lot of reconditioning charges, it may be a good deal.

 

If the offer is less than market value, it can also be a good deal.

 

The final decision comes down to whether you can afford the loan payments and want to keep the car or not. Many people like leasing because of the lower payments and the ability to drive a new car every few years.

 

Only you can answer that!

 

Financing Lease Buyouts

 

You can finance a lease buyout using a specific buyout auto loan or a standard used car loan. We recommend the latter but only if the interest rates and charges make sense.

 

Compare any finance offer from the leasing company with the wider London auto loan market. Get loan preapproval to make sure you would qualify for a good rate and then make an assessment. If the lease buyout loan is cheaper, go with that. If you find a cheaper auto loan, go with that.

 

Just don’t sign up for a loan without checking with us first!

 

When you’re ready for a car loan, get in touch with the London auto loan experts at Northway Ford for great deals on auto finance.

 

Be sure to connect with us on Facebook, Twitter, Instagram, or LinkedIn to stay up to date on our latest great articles!

 

Categories: Car Loan

Tags: ,