The lingering COVID-19 pandemic has decimated many major industries. One of them is the auto industry that’s close to endangering the jobs of nearly 1.3 million Americans. Moreover, as a huge number of drivers are closing into the car lease end, the present situation due to the virus has people on edge. But the situation is not all bad. And a large number of automakers, as well as financial institutions, are coming forward to provide flexibility and support to customers as they go through these worrying times.
Most of you must have heard regarding lease extensions, deferred payments, and even penalty forgiveness. And although you must remember these options, you should also have sufficient knowledge about how you can end your car lease during COVID-19.
Here is how you can have a hassle-free car lease ending and that, too, without paying unnecessary fees:
What are your options to end car leases during the pandemic?
Considering the ongoing health crisis, many dealerships and automakers have come up with lease extensions to their customers between one and six months. Also, in some instances, automakers are prolonging the lease period of the customers who have not yet checked in as their lease is about to end. Dealers are also waiving penalties. You can get further information about this from your automaker or to ensure if there are any programs to offer relief to the people.
Automakers are taking help from the different social media platforms and publish updates on their public profiles and their social media channels regarding the steps they have taken regarding customer assistance. The main thing you must pay attention to is the fact that if you are going to extend your lease, you would have to pay for another year of registration. No matter you extend it only for a month.
If you are thinking to turn in your car, you would see some dealership’ service centers offering the customers with pick-up or drop-off. You can also ask around the local dealerships to see your available options. You can exchange your car lease for a new or even take over someone else’s car lease. This process is called car lease swapping or takeover that has grown rather popular over the years.
What can you do?
Irrespective of the fact that these times are critical, there are a couple of things you should be careful about as your date for lease-end gets nearer. Here are some of the best options that you have regarding this:
Turn in your Lease
Turning in your car lease is rather simple. But you should know that the dealership is going to inspect your vehicle in detail, calling for coordination from both ends during the current outbreak. It is better than you are there for the inspection, so if there are any queries or questions, you can answer them. Once the inspection is over, you are liable to pay the mileage overages, disposition fee, and pay for depreciation, if any.
Trading in Your Lease
Another thing that you can do is to trade in your lease and a brand new one instead. You can go to any dealership you want to. But an honest suggestion? It’s better that you go to a dealership that deals in used cars. This way, you can benefit from offers that do not come with a trade-in negotiation.
After you have received a couple of offers, compare the best offer that you have got to your residual value. The residual value is the number the car dealer sets at the start of the car lease. If you get an offer for higher, you are good as now you have the equity that you can use whichever way like. This could also be used for your new car’s down payment.
Compared to your residual value, if you get a lower offer, then you should take into account the amount you are going to owe as fees for ending the lease. So, it would be better to turn in the car and avoid paying the penalty.
And if you get an offer equal to your residual value, then it’s better that you sell your car than turn it in to avoid paying the fees.
Buy Your Leased Vehicle
You should have some strategies in place if you have decided to purchase your car once your lease is nearing its end. You are going to get a buyout price on your monthly statement. This price happens to be an amalgamation of remaining payments, associated fees, and residual value. Also, take into account any add-ons services as well, including contracts and extended warranties. Make sure that you survey and then get the best rate on your loan if you are financing.
Calculate how much you have to pay in costs for ending the lease and then look at your buyout price.
Say your fees for ending the car lease is $2500, and your buyout price is $12,000. You should buy the car and avoid paying the $2500 fee.
But if the residual value is $8000 and your buyout price remains the same, it would be a sensible decision to just turn the car in. As a result, you would pay the $2000 in fees rather than $4000 in premium.
Car lease transfer or Swapping through QuitALease Another thing that you can do is transfer your car lease to someone else. You can have someone to take over your car lease. For this, QuitALease—an online lease-swapping platform—could be of great help. Here, you can find a used car lease and then get a car lease at a much lower cost.