When the Business agreement has flow away on a leased vehicle you admit the possibility of turning the van in to the leasing business or purchasing it for the residual value. Use the Kelley Blue Book or Edmunds websites to determine the wholesale and private party values of the car. If the lease payoff is significantly lower than the market value of the car, buy the car at the residual value and keep it or resell the car and keep the extra value. If the numbers are reversed, turn in the car.
The decision on which direction to take is a combination of personal preferences and financial considerations.
Financial Considerations
Call the leasing company and obtain the price to purchase the car at contract termination. This number may be the residual value in the contract or the leasing company may also offer a lower purchase price to avoid getting vehicle back. If the lease buyout value and the market value are balanced, weigh the other factors.If the vehicle is turned in to the leasing company, the lessee must pay for any excess mileage at the rate stipulated in the contract and any excess wear or damage on the vehicle. If these charges are going to be very high, it may make sense to buy out the lease and continue to use the car instead of writing a big check to the leasing company just to turn it in.
Personal Considerations
If you really like the car and the buyout value is not out of line with the market value, buy the car and continue to enjoy it. Also, if the buyout is low and you have the cash, driving a payment free car will definitely help the monthly cash flow.
Many people who lease cars do so to drive a new vehicle every few years. If the leasing company is affiliated with the car brand you may have extra financial incentives to turn in the car for a new one of the same brand. If you want to lease another car, talk to a dealer of the the new car a few weeks before the lease termination. They may be able to negotiate a better deal with the leasing company concerning the turn in cost.
