So your lease is going to expire anytime soon. What should you do next?
The first thing to do is to find out the remaining value of your vehicle. At the end of the lease, the number of variables is as long as they were at the start of the lease. So there are several different factors to consider that many consumers do not realize. Customers often disregard these factors that play a major role at the end of the lease and therefore end up simply turning their vehicle into their dealer’s hand, relying completely on the leasing company.
So knowing these variables would make a lot of difference in your leasing situation. It better to understand them before handing in your vehicle to the leasing company.
Here are those variables that are important to know:
Overage in Miles
As you know you had mileage limit set in your lease contract. Your lease amount is determined by assuming that you would pay off the vehicle’s depreciation over a particular time period. The mileage is factored into your monthly lease payment. If you drive over the allowed mileage, then you have effectively reduced the value of the vehicle.
$.10 - $.25 is usually the fee charged for extra miles driven. This fee is calculated at the dealer. So if you want to calculate the amount that you owe at the end of the lease due to extra miles driven then simply multiply the number of miles that you are over with the overage fee agreed in your contract and you will get the total amount. If you want to know the actual residual value of your vehicle, then subtract this overage amount from the residual value and you will know what the vehicle is worth.
Damage to the vehicle
Another factor to affect the residual value is the damage to the car. When you return the vehicle to the dealer, it will be carefully inspected. Most of the seasoned dealers overlook a few small scratches, but will not overlook dents or anything else that must be fixed before the resale. If your vehicle has been damaged and demands repair, then you must fix it before you return the vehicle to the dealer. It is advisable to get it repaired at a local repair shop. If you decide to get it repaired from the dealers, they will charge a premium for any repair work.
It is better to get your vehicle checked out by the local body shop first and get an estimate. Then take your vehicle to the dealer and get an estimate from them for the turn in costs associated with the damage. You can now compare the two and negotiate in accordance with the local body shop’s estimate to get a lower cost from the dealer.
Excessive Wear and Tear
Though it may sound similar to the damage, you must follow the similar procedure to assess the worth of car for this section as well. Please make sure that everything is inspected when you are ready to turn in the vehicle.
Residual Value
The residual value of your leased vehicle or the estimated worth of your vehicle at lease-end is typically calculated at the beginning of your lease. The actual value of the vehicle may be higher or lower than the estimated residual value mentioned in your lease agreement. If the residual value was included in the lease contract, then you will not have to pay any more for your vehicle unless you have any excessive miles than allowed, damage or wear and tear.
So make sure that you decide and include a residual value upfront and follow out the respective rules mentioned in the contract to avoid any additional costs.
