At the end of a lease , what happens ?

[slyjackson]

My friend asked me here at work about what happens at the end of a lease. I know that you have two options.

1. Give the car back. or 2. purchase it.

If you choose to keep the car, do you still have to go to the dealer and get the car inspected so they can "nick-pick" charge you for wear?

or -

Do you just tell Chrysler Finance/leasing that you want to purchase the car and Chrysler Finance/leasing will just send you a payment book and you just start making payments on what is stated as the value of the car at the end of the lease on your contract?

He wants to do mods on a leased 300 base. He also wants to keep the car.But he is afraid that he will get hit at the end of the lease by the dealer for charges if they see the mods on the car even though he wants to keep it and he does not want to go through the hassel of removing the grille,tint,rims and other add ons, then turn right around and put all the stuff back on after all is said and done.

[williamspeaking]

If you keep it I'm pretty sure that you just basically refinance the remaining X amount of dollars for the payoff, and are done.

[ADOGG]

His contract will have a residual value(buyout $$) If he has to finance that amount, he will either go to his ownbank/credit union or go back to the dealership. That buyout might not include sales tax, yes you have to pay on the residual value, nor any transfer-title-notary fees. If he's buying, dealer could care less what the condition is, if not then they really try to hammer you.

[RPM300C]

IF YOU ARE GOING TO BUY THE CAR...
The dealer or the lease holder cannot change the terms of the lease at the end just because you have modified the car. A lease is a legal and binding agreement that both sides have to abide by. The lease will specify the the "Residual Value" or the "Purchase Option" amount. That is the amount you will pay for the car at the end of the lease if you are going to buy it, regardless of the condition of the car.

IF YOU ARE NOT GOING TO BUY THE CAR
The lease holder can indeed charge you for modifications if they think the mods have reduced the value of the car. When you turn the car in at the end of a lease, the lease holder is going to wholesale that car at auction. They went into the lease expecting to have a known quantity at the end and a value they predict as accurately as they can. If your mods make the vehicle less desirable to the general market, they will charge you for their value and/or to remove them so they can get top buck for the car.

[Payback22]

Depends on if it is a closed-end lease or not. In this case, you must give the car back.

[kevenj]

Originally Posted by Payback22

Depends on if it is a closed-end lease or not. In this case, you must give the car back.

That's not correct; A closed end lease simply means there is a set residual amount that the car can be bought for at the end of the lease term. I don't think anyone does open end leases anymore, at least I hope not.

There's another option; If you want to buy the car, but the residual amount is higher than the car's blue book value you may be able to negotiate a lower residual amount. Of course the lease company doesn't HAVE to negotiate and if they won't then you either have to give it back or buy it for the residual amount stated on the lease. But if they believe you are prepared to turn it back in and they know it's not worth what the residual amount is, they may find it in their best interest to make you a better deal.

[mjr5150]

As kevenj stated....even if you have a pre-negotiated buyout agreement.....you can , should always try to deal for less . Truth is ...they dont want it back . It is their preference that you buy it out . If they take it back...they almost always have to dump money into it to bring it up to a legally defined minimum standards on brakes, tirewear , etc. Then they have to find a new buyer . Always offer them less than you previously agreed to...in most cases ...you have the upper hand . I lease a Jeep GC overland every three years for work . I kill it with mileage 58k in a little over two years...and always have to turn them in early (chrysler typically eats 3 months ) . The buyout on the last one was 18k .They were throwing it at me . Easily could have been had for 14k....maybe less........but I wanted a fresh one to kill . My brother bought out his wives 2002 Durango recently from a lease . Buyout was 16k .....I think . It looked like hell (they are brutal on a vehicle....BRUTAL!!) . They took it for 12k and threw in a warranty....just to get them the hell out of there . You can deal ....trust me . I am going to try on my CSRT-8.....because the buyout is 25k !!!! But I am not hopefull . It is a limited production car . Limited production color and have extremely low miles . Oh...and about 20k in it ......so far ....in mods !! Guess they'll have me over a barrel.....but i'm still gonna try . Maybe I should lend it to my brother first to give it that '' lived in look '' ....they are apparently so fond of ....LOL!!!

[devilmaycare]

Originally Posted by williamspeaking

If you keep it I'm pretty sure that you just basically refinance the remaining X amount of dollars for the payoff, and are done.

This is how it works in the UK. In recent years, I've bought a couple of cars at end of lease and the deals have been conducted over the 'phone - no inspections by anyone. The leasing firms just want to dispose of cars as fast as possible and with minimum fuss. They like to avoid having to collect, deliver to auction, pay auctioneers fees, ending up with an unknown profit.

[slyjackson]

Originally Posted by devilmaycare

This is how it works in the UK. In recent years, I've bought a couple of cars at end of lease and the deals have been conducted over the 'phone - no inspections by anyone. The leasing firms just want to dispose of cars as fast as possible and with minimum fuss. They like to avoid having to collect, deliver to auction, pay auctioneers fees, ending up with an unknown profit.

This is what I was thinking, Hopefully this is the same approach that is used here. Personally I think if he adds a grille, tints the windows and adds some rims, i don't think this would be a big deal. He could remove all three without too much of a hassle at the end if he felt uncomfortable, If he added body kits, did interior mods, exhaust mods, ect then this might be an issue. As you have said, the options of keeping the car could be handled with a phone call. He may have to go and sign some papers and give up some cash, but I did not think that it was a mandatory thing to have the dealer inspect the car if was to keep it.

[LadyInBlack]

You can also sell the vehicle from under the dealer at the end of the lease and hand over the residual amount to the dealer and pocket the rest if it's worth it. If you keep it in good shape and low miles (and I guess it depends on options)...you never know...it might be worth more than the original! That way you can put the profit towards another car.

-Lady