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Car Lease Buy Out
The car lease buy out is the pre-determined amount that the lessee can purchase the leased vehicle for at scheduled lease termination. The Car lease buy out figure consists of the Residual Value plus the Purchase Option Fee, if applicable. In some cases this figure may be viewed as a worst-case scenario because many leasing companies will negotiate this amount with the lessee in order to hedge potential losses associated with the sale of the vehicle through other channels.
If the vehicle depreciates significantly over the course of the lease, the car lease buy out will be low. However, if the vehicle does not depreciate much throughout the lease, but rather retains most of its value, then the car lease buy out will be much higher.
It is also possible to purchase the vehicle at any point throughout the lease for the current lease buyout. An example of why someone might want to purchase the lease while the lease is in process is if the vehicle is substantially over in mileage or has significant excess damage. In either situation, the lessor at lease-end would charge the lessee a premium. So, the lessee might decide to purchase the vehicle and either sell it or keep it for him/herself.
It is also possible to simply transfer the vehicle by finding someone to assume the lease. The process of lease assumption also allows you to get out of a lease without suffering any financial penalties. Swapalease is the Internet’s premier marketplace for lease assumptions.
Other fees associated with leasing include the security deposit, the down payment (or capitalized cost reduction), the disposition fee, excess mileage fee, excess wear fee, registration fee, taxes, monthly payment, insurance cost, early termination fee, charges for late monthly payments, and any other fees that may apply. It is important to understand which of these fees are negotiable, and which are not. These fees can vary by leasing company and/or by dealership.
These fees, along with many other leasing terms, are defined in this section. Please see the Frequently Asked Questions section of Swapalease.com for any other questions about leasing, leasing fees, and other leasing-related concerns.
Important Details
Up-front costs: Lease contracts typically require up-front costs to be paid by the lessee. These costs might include a down payment, an acquisition fee, a refundable security deposit, one month’s payment, registration fees, and/or taxes.
Monthly payment: The monthly payment is the payment made by the lessee each month to the lessor in exchange for use of the vehicle. The payments are made up of the vehicle’s depreciation over the term of the lease, interest charged by the lessor, and any taxes that may apply. The payment is negotiated up front.
Early Lease Termination: A few methods of early lease termination exist.
Return the vehicle early to the lessor: In this type of situation, the lessor will require you to pay any remaining payments along with early lease termination fees, which can cost thousands of dollars.
Voluntary repossession: There are no up-front costs, but the lessee’s credit will be severely damaged, as this is considered a form of repossession.
Lease assumption: By finding someone to assume your lease payments, you can walk away from your lease without any significant up-front costs. Click here to find our more information.
Lease end date: It is important to find out a drop-off point for your vehicle that is close to you and approved by the lessor. At the time of drop off, you will be required to pay any lease-end costs before the transaction is complete. These costs may include excess mileage fees, excess wear and tear fees, disposition fee, and any other lease-end costs. It is recommended that you have the vehicle inspected and repaired, if necessary, prior to vehicle drop-off so that you can avoid pay premium prices at the dealer.
Mileage: Most leases limit the number of miles that can be put on a Nissan lease vehicle each year. This range is typically between 10,000 to 15,000 miles per year. Extra mileage allowance can be purchased at the beginning of the lease. Otherwise, each extra mile is billed to you at a premium price at lease end. Lease-end excess mileage fees typically range from $.10 to $.20 per mile.
Excessive Wear: Lease contracts typically limit wear and tear to the vehicle over the term of the lease. The lessee will be billed for any excess wear and tear at a premium price.
NOTE: Article by Swapalease.com.
