Lease End and Termination

Typical Lease End Options:

a) Turn the vehicle in to the dealership. At this point the business manager contacts the leasing company to get your buyout before taxes. Usually the used car manager then appraises the vehicle to find out its appraised value and record Km's and general condition. If you are within Km's and find that the vehicle is worth less than the appraised value its a good option to just turn the vehicle in.

b) Trade your vehicle in for a new one. Again the leasing company is contacted and the vehicle appraised. Its important to find out what your buyout is and what the appraised value is of your vehicle. You can usually roll over any equity that you may have built up in your lease to the new vehicle. This may give you a lower finance or lease payment on your new vehicle.

c) Buy the Vehicle out. Once you decide this the business manager simple gets your buyout amount and adds the necessary taxes (in B.C. 7% gst and pst). You either cut him a check or finance the buyout through the dealership or finance company.

Early Termination.....you can cancel your lease early but may incur a fee. A number of conditions will apply when determining the early buyout fee. These conditions would include: market conditions, how early you are terminating, km's on vehicle and present manufacture rebates or lease rates.

If you are canceling your lease early in its term and the manufacture has a large year end rebate on the same vehicle you may find yourself paying a large fee. If you sign a 20,000Km year lease and decide to terminate half way through and have 53,000 Km's you will also find you have a large fee to pay.

With an early termination of a lease you still have a few options. You can trade the vehicle in at the dealer. You may find yourself backward (owe more than the vehicle is worth). You can sell the vehicle privately and pay out the contract. Don't forget you have taxes to pay on the buyout of the lease. It is also possible to find someone to take over your lease. They will have to qualify through the leasing company.

Leasing and their Km's.... if you sign a 24,000Km year lease and at the end of the lease you have 107,000Km you could be paying for excess Km's.  If the lease stipulates 10 cents for Km's over 24,000 per\year you would pay $3,500.  This is based on the fact that the more Km's on a vehicle the less it is worth. Basically, if you go over your Km's the vehicle has depreciated more with the higher Km's

If you purchased more Km's than you used your vehicle is worth more and you should recover some of the costs. The vehicle is worth more because it has less Km's and the lease was based on high Km's.

Back to Leasing