What Fees Do I Have To Pay When My Lease Ends?
Your car lease agreement likely requires you to pay a fee or two at the end of your car lease. These fees are related to what you choose to do when your lease ends. If you hand your leased vehicle back to the leasing company, you will likely pay one fee, and if you purchase your leased car, you will probably pay a different one. Here are three end of lease fees you may have to pay.
Three End of Car Lease Fees
Early termination charge – Your leasing company does not want you to end your lease early, so if you do, you will have to pay an early termination charge. Sometimes, people wish to end their lease early to purchase their lease vehicles. However, to buy your leased vehicle before it reaches the end of its term, you will usually have to be in the last six months of your lease, and even then it may be wisest to wait until your lease reaches its term.
Purchase option charge – In most leasing arrangements, you have the option to buy your leased vehicle for its residual value at the end of your lease. Usually, you will have to pay a purchase option charge of a few hundred dollars to exercise this option. However, you should consider a number of factors to know if it is worth for you to pay this fee to buy your car, such as the car’s market value or if it has excess mileage or damage. Know that if you choose to buy your leased car, you can often roll this fee into your car loan.
Disposition fee – The vehicle disposition fee is the charge to return your leased vehicle at the end of your lease. Your leasing company charges this fee to pay the expenses it incurs to resell the vehicle. The disposition fee is usually non-negotiable at the beginning of the lease and will not increase or decrease during lease period. One of the benefits of buying your leased vehicle is that you do not pay a disposition fee.
These fees may not weigh heavily on what you chose to do at the end of your lease because, unfortunately, you will likely have to pay one of them when your lease ends. Still, it is good to be aware of these fees, especially if you are nearing the end of your lease and did not realize such fees could be coming. So, check your car lease agreement to see what sort of fees you will have to pay.
If you want to purchase your leased car but are unsure of where to begin (or even if you are making the right choice), apply with IFS today and your dedicated Finance Advisor will consult with you on solutions that work for your financial situation.