mellowcmb

iTrader: (1)

Since this is my first experience in leasing a car, I just wanted to ask the experts a few questions. Forgive me for appearing really ignorant, but to be honest, I am when it comes to leasing. So my question is: What happens at the end of the lease? From my understanding, I have to come up with $15,500 (the car's value) if I want to purchase the car at the end of the 5 year lease. What if I decide to change cars? Will the $15,500 be credited into the new car if I decide not to stay with the RX 330? Any info would help my knowledge greatly!! Thanks guys.

Mellow

RX330inFL

Mellow,

Yes, at the end of the lease you would need to come up with $15.5K, plus tax (remember, you are only paying taxes currently on the amount of the car you are using up and not the whole amount), tag, title, etc. This $15.5K is not money you have earned, so no you do not get any credit towards a new car. You still owe that amount if you want the car. However, if the car is worth more than $15.5K, you have some equity to work with.

A number of things you can do at the end of the lease:

1. Drive the car to the dealer and walk away. This is good if the value of the car is less than the residual value assigned to the lease.

2. Buy the car. If you still like the car or if the value of the car is worth more than the residual you can buy it and sell if you want or keep and drive.

3. Trade it in. Sounds funny, but if the car has a high resale value and worth more than the residual then you can talk to the dealer (any dealer) about trading it on a new car.

If your deal is with Lexus Financial, for example, you can go online and see what your buy-out of the lease is at any time. Very similar to a standard loan with the exception of at the end of the term you still do not own the car.

At the end of the lease if the car needs new tires, body or paint work, has high mileage above the lease mileage numbers or similar you may be charged for these repairs or extra wear and tear. If you buy the car at the end of the lease these are usually waived.

Hope this helps.

RX330inFL