Yahoo Autos How Does a Volkswagen Lease Buyout Work?
Leasing a Volkswagen is a great way to discover whether you enjoy being behind the wheel of one of the automaker's stylish models. But when the lease ends, you'll have to decide how much you love driving the car and if you want to stick with the brand.
At the end of your Volkswagen lease, you'll have a few options, so it's good to prepare by learning everything you can about your choices.
After driving the car for a couple of years, you should know if you like how it feels to sit behind the wheel, whether it accelerates and brakes to your liking, and how well you like the placement of knobs and controls.
If you really enjoy driving your Volkswagen and you've kept it in good shape, you may consider buying out the lease. Before you decide to make this move, it's helpful to know how a Volkswagen lease buyout works and if it's worth it.
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Volkswagen Lease Buyout Process
Volkswagen provides a buyout option that allows you to buy your car before or at the end of your leasing term. This is perfect for you if you love your car and can't bear to part with it.
The first step to take when your Volkswagen lease ends is to decide whether you want to buy the vehicle or return it for a new Volkswagen or another brand. Once you've decided, you can schedule a free inspection with a third-party company that will assess the condition of your vehicle.
They will provide a report to the leaseholder. Volkswagen works with a company that will come to you at your workplace, local Volkswagen dealership, or home to provide a fair and accurate report of your vehicle's condition. You can make repairs to avoid incurring fees at the end of your lease, but if you're buying the vehicle, you won't need to worry about this.
Next, you'll need to make your final payment as well as any payments you may have deferred during your lease. Volkswagen allows you to roll over deferred payments if you're leasing a new car from an authorized Volkswagen dealer upon approved credit, as stated in their Lease-End Guide.
However, if you want to buy your car, the residual amount will be due at the time of turn-in. In addition, the lease buyout usually involves other costs, such as sales taxes, a purchase option fee, and a title transfer fee.
Even if you want to buy out your Volkswagen lease, you'll need to schedule a time with your dealer. They can help you complete any paperwork. To finalize your purchase, you'll need to obtain a purchase agreement package from the Volkswagen website, or you can call to get copies sent to you. The package will contain the following:
A bill of sale agreement.
An odometer disclosure statement.
A titling information page.
A checklist.
You can turn in the documents, and it will take about two to four weeks for Volkswagen to send you the title and final purchase documents. When you have the title and paperwork, you can take it to your local Department of Motor Vehicles to have the title transferred to your name.
They will send you an official title, which means you legally own the vehicle. Keep in mind that Volkswagen won't send your title to a third party, so you must be the one to buy out the lease.
Is a Lease Buyout Worth It?
A Volkswagen lease buyout can be worth it in many situations, including:
You really love your Volkswagen and don't want to give it up.
You went well over your mileage cap, and you'll have to pay a large fee.
Your Volkswagen was damaged in an accident, and you'll have to pay high fees.
Your car has a higher fair market value than its residual value.
You have the money to buy the car, and it's a good deal because you took good care of the vehicle.
There are also times when a lease buyout may not be the best option for you financially, such as:
You can buy the used car for less than it will cost to buy out the lease.
You don't have the money to pay the residual cost.
You don't qualify for financing for a lease buyout loan.
You don't like driving the car.
You prefer to drive a brand other than Volkswagen.
You want a vehicle with the latest features.
You'll want to look at the numbers to decide whether a lease buyout is right for you. Compare your car's residual value to its current fair market value, which you can find through sources such as the Kelley Blue Book. If the residual value is less than the fair market value, a buyout could be the right move.
Make sure to calculate how much you'll owe in excess wear and tear and over-mileage fees, as well as any other fees you'll be responsible for at the end of your lease. When you buy out the lease, you won't have to pay for excess wear and tear or going over your allotted miles.
Can You Negotiate a Volkswagen Lease Buyout?
It's difficult to negotiate a Volkswagen lease buyout because the vehicle's value was determined at the start of your lease. This amount was also set as the amount you would pay if you decided to buy out your lease at the end of the contract.
This is known as the residual value, and leaseholders are pretty good at estimating what the value of a car will be when its lease ends. But on the off chance they get it wrong, which can happen, you may have an opportunity to negotiate your lease buyout.
For example, if your leased car has a residual value of $20,000, this is the amount you'll pay to buy out the lease. However, if the car is only worth $18,000 when your lease ends, you may be able to negotiate the buyout price.
The larger the difference between the residual amount and the fair market value of the car, the more opportunity you have to negotiate a better price. Similarly, if your car has a higher fair market value than its residual value, it's not likely that you'll have any room to negotiate.
Another way to save money on your lease buyout is to try to negotiate fees. While you'll likely pay title transfer fees and applicable sales taxes no matter what, you could have some luck reducing the purchase option and documentation fees. Check your lease contract to make sure it lists the specific fees you're asked to pay. If not, you can question such costs and negotiate them.
Volkswagen Buyout Fees and Rates
When your Volkswagen lease ends, you'll need to look at the fees and rates that are due to help you decide which option works best for you financially. You may love your vehicle, but if it doesn't make sense financially to keep it, you may be better off leasing a new car or buying a used vehicle that's similar to the one you're leasing.
Of course, you will have to make your final payment in addition to paying the residual value of the car and any other taxes and fees.
Volkswagen doesn't let a third-party buy your lease, so you'll have to come up with the money yourself or work out another way to obtain a lease buyout loan.
If you plan to return the car, Volkswagen usually charges you a disposition fee to clean the vehicle and get it ready to sell or lease, as well as fees for any damage the car has, excess wear and tear, and any miles you racked up over your agreed-upon limit. You can usually avoid the disposition fee if you buy or lease another Volkswagen.
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