If you are currently under a car lease, you will inevitably have decisions to make. Recently, a client went through an unfortunate experience where they ordered a new car only to come to find out that in today's environment the car was unable to be delivered. The new car dealer returned the deposit and now the buyer had a decision to make.
The buyer had extended the existing car lease on the vehicle they owned; they went month to month. When they made the decision to buy out the lease vs. shopping for another new car, the buyer naturally called the financial company to request buyout number; the client had a good idea of the amount since it was on the monthly invoice. Unbeknownst to the buyer and because they went month-to-month (month 38), the financial company said they voided the original contract. Therefore, the residual had gone up substantially – market value! The original residual dollar amount was $31,000. Because they voided their contract, the new value was $51,000 to buy out the vehicle. Obviously, this was a complete shock to the buyer. Not wanting to pay the extraordinary amount on his current vehicle, the buyer began a frantic search for a new vehicle, again. This decision cost the buyer $20,000.
The moral of the story is to make sure that you are aware of your current lease situation and have a plan for your end of lease term on current vehicle. It's imperative you decide what to do while you are still under the original contract. You should also know what options you have while in your contract before changing the original contract. This will allow you to make good financial decisions and avoid substantial costs or penalties.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Example is for illustrative purposes only and not representative of any specific situation.