Renting a car is a great idea for many reasons. Not only is it cheaper than buying a comparable car, but you get to drive something new every few years. If you decide to lease your car, it is important to know what options you will have when the contract comes to an end. Some people feel like their only option is to return the car to the leasing company and re-lease it again. Of course, that’s not true.
Here are several options to consider when your car rental agreement ends:
1. Return the vehicle to the lessor and leave
With this option, you can take the car to the dealership that leased it to you and drive away for good. For those who didn’t like their car, this is the number one option.
Note: When you do this, your car will be inspected with a fine-tooth comb for any damage. You will be charged for anything that is not considered “normal wear and tear”. This is one of the main disadvantages of renting a vehicle and returning it when the original contract expires. Also, don’t forget the “excess mileage” fee.
2. Extend the rental contract
Have you fallen in love with your car, as well as the rental services concept? If so, you may be able to extend the contract on your current vehicle. To do this, you must contact the lessor to discuss the details of the agreement. In most cases, you should be able to agree to an extended term for at least the price you paid.
3. Buy the vehicle
If your lease is coming to an end and you don’t want to get rid of your car, you have the option of buying it from the lessor. The redemption price should have been presented to you when you signed your initial contract. If you want to own your car, rather than extend the lease, you can either pay cash or arrange for financing.
Example: A few years ago, I rented a car whose purchase price was around 22,000 euros. After three years of paying on the lease, I was offered a buyout price of 12,500 euros. Although I declined that offer and chose to leave, had I decided to purchase the vehicle, the monthly payment would have been about the same as the previous lease. The main benefit of buying was that title would pass to me, as opposed to the leasing company retaining ownership.
Before making the decision to buy your vehicle, compare the Kelley Blue Book price to the buyback price. This will give you a better idea of the type of deal you can get.
4. Let your old rental agreement expire and start a new rental agreement
As stated in the introductory paragraph, this solution is very common because many tenants think it is their only option. If you enjoy the benefits of renting a car and are ready to start again, this is the option you should consider. Typically, you will return your old car to the rental services company and choose another one from the lot. The main thing to remember is that you will need to negotiate a new lease agreement for your new vehicle. In other words, you are not extending your past agreement.
5. Exchange your lease with someone else, before your contract ends
It’s a relatively new idea, but one that’s gaining a lot of traction. Thanks to it, you can get rid of your lease before it expires without having to pay any fees.
If your car rental services contract is coming to an end in the near future, expect to receive documents from your dealer or rental services company that detail the above options as well as any others that are currently on offer. All of these options should be seriously considered, as they each serve a different need based on your financial situation and personal preferences.
What route have you decided to take in the past when your lease expired?
