Written by Erika Carroll, First New York Senior Real Estate Loan Expert
Prepare Now for a Potential Lease Buyout
Are you near the end of your lease term? If you’re three to six months away from your lease term ending, then it’s time to start thinking about if a lease buyout is right for you.
There are several options available to you to choose from, including doing a lease buyout, buying out the car and then reselling it, transferring the lease, doing a trade-in, or extending the lease. However, not all possibilities are alike.
In this article, we’ll go over the top five benefits of a lease buyout. Ready to start pinpointing the benefits of this route? Let’s go!
What is a Lease Buyout?
A lease buyout is when you purchase your vehicle at the end of its lease. It can also be referred to as a purchase option, car lease buyout, or auto lease buyout. It’s important to know that a lease buyout may or may not be available at the end of your lease period. This way you can prepare for the next steps.
If a lease buyout isn’t available to you, you’ll need to start researching your next vehicle and any kinds of loans you may need to finance your new vehicle with an auto loan. If a lease buyout is available to you, you’ll need to speak with the organization you leased your car through to find out the lease buyout purchase price. You’ll also want to take a look at the lease agreement and lease contract. From there, you can determine your next steps.
If you’re able and willing to buy out your lease, there are some major benefits to knowing about choosing this option. We’ll discuss this more in the section below.
Top 5 Benefits of a Lease Buyout
When it comes to buying out a lease, there are some great additional perks that you’ll want to know about before you decide to purchase. I’ve rounded up the top five benefits of a lease buyout, so you have a better understanding of this choice available to you. I’ve also included some additional First New York Federal Credit Union services available to First New York Federal Credit Union (FCU) members and non-members.
Benefit 1: You Can Buy Out the Lease for Less
In today’s current market, you most likely cannot buy the same or similarly equipped vehicle for the same money as your lease buyout price. This isn’t only due to inflation and the supply chain shortage. It’s also due to the fact that dealerships or private car sellers may have increased prices for the same model and year of your lease.
Benefit 2: You Purchase a Vehicle You Know
As the first and only owner of your leased vehicle, you’ve been the only person to take care of and maintain your car. So, you know the ins and outs of your vehicle. You know how it performs in different weather and situations, and you also know the wear and tear you’ve put on it.
Plus, you don’t have to go through the whole car-buying process again! That’s a huge advantage of getting to purchase your vehicle once the lease ends.
Benefit 3: You Can Get a Lease Buyout Loan
When you buy out your lease, you have a few choices. You can either pay for the vehicle all at once with money you’ve saved up over time, or you can take out a loan to pay off the buyout price.
If you need to take out an auto loan, you should research interest rates, car loan offers, and how to apply for financing in advance. You should also know how your credit score will impact the amount you’ll have to pay throughout the loan term.
At First New York FCU, you can get a competitive auto loan rate – in fact, the rate for your 2- or 3-year-old vehicle is actually the same as it would be for a BRAND NEW one!
Benefit 4: You Can Get a New Warranty
No more factory warranty?! No problem! First New York FCU offers bumper-to-bumper extended warranties up to 125,000 miles that can be used almost anywhere in the United States with a Total Loss Refund. That, along with the option for our Easy Drive program that offers similar benefits to a lease but you actually own it, will have you reaping all the benefits of a new vehicle without that new vehicle price tag.
Benefit 5: Additional Coverage is Available
First New York FCU offers additional coverage on top of the auto loan you can take out to buy out your lease. Through our credit union, we can also fully protect your auto loan with life & disability coverage. So if anything happens to you, we’ve got your payment covered through our payment protection insurance.
Have Questions? Erika Can Help!
As First New York FCU’s Senior Real Estate Loan Expert, I can walk you through the best options for your potential lease buyout. Together, we can discuss your options and the types of loans available to you.
You can contact me directly at (518) 393-1326 ext. 1033. You can also call (518) 393-1326 and press 3 to talk to any First New York local Loan Expert or visit us online!