Yahoo Autos Everything You Need to Know If You're Considering a Nissan Lease Buyout
Leasing can be a convenient way of getting a nice car without overextending yourself financially. Although you don't actually own your vehicle and have certain restrictions when using it, such as the maximum number of miles you can drive every year, the advantages of leasing make it a worthwhile option. The only potential challenge is deciding what to do when the end of your leasing period draws near.
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As with many things in life, though, the more you know, the easier it is to make the right decision. There's no one-size-fits-all solution, so the best course of action generally varies from one situation to another. You may want to start another lease on a newer model or just take the car back to the dealership and ride the bus for a while. Or maybe you like the car so much that you want to pay it off and keep it forever.
This is a common occurrence among brand loyalists, and Nissan drivers are no different. The Japanese manufacturer makes some great vehicles that, like most cars that come from this region, are exceptionally reliable. Learning how a Nissan lease buyout works can help you decide if buying your vehicle at the end of its leasing period is a good idea based on your situation. In this article, we go over the options you have toward the end of your lease, including buying out your vehicle and returning it to the dealership.
Nissan Lease Buyout Process
A lease buyout involves buying your leased car at or before the end of its leasing period. The price you have to pay to own the car is its estimated value at the end of the leasing period, also called the residual value. You may also need to cover additional costs, such as any remaining monthly payments, sales taxes, and other fees. The following are the steps you can take to buy out your Nissan at the end of its leasing period:
1. Find Out Your Nissan's Current Value
Knowing how much your Nissan is worth can help you decide if it makes sense to keep it from a financial standpoint. Check your lease contract, which will stipulate the vehicle's residual value, or get a payoff quote from your leasing company. You can find your car's current market value by using an online car valuation tool, such as Kelley Blue Book.
Buying out a car for a higher price than its estimated worth on the open market is usually a needless expense, especially if you're financing your buyout. However, you may have become emotionally attached to your vehicle, which is perfectly understandable. Many people own the same cars for decades and establish strong bonds with them.
So if the asking price for the vehicle seems high, you can either ignore your accountant and buy it out anyway or take it back to your dealer and buy the exact same make and model on the open market for the right price.
2. Speak with Your Nissan Dealership or Leasing Company
After deciding to buy out your leased vehicle, contact your Nissan dealership or leasing company. It'll let you know exactly how much you must pay, including any outstanding fees and taxes. It will also explain the lease buyout process and help you with the technicalities of changing the car's title to your name.
3. Decide How You Want to Pay for Your Nissan
A major part of your Nissan lease buyout process is getting the money together for it. Unless you're willing to dip into your savings and buy the car with cash, an appropriate approach would be to finance your purchase. You could start by asking your leasing company if it'll offer you financing. Then, shop around online for additional offers, and if you get one with better rates, show it to your leasing company. It may be willing to match these better rates.
Is a Lease Buyout Worth It?
As mentioned before, loving your car is a good enough reason to keep it. Other good reasons include:
The car is worth more than its residual value: This is a no-brainer. If your car's current market value is higher than its residual value, you can resell it after the buyout for a profit.
The car is pretty beaten up: You may be tempted to get rid of your car if it's in rough shape, but this may cost you more than buying it out. Leasing companies have penalties for excess wear and tear, so buying it out, fixing it, and reselling it may be a better idea financially.
You went way over your allowed mileage: Similarly, going over the maximum mileage mentioned in your contract may lead to hefty penalties. Buying the vehicle out and reselling it on the open market may cost you less.
You know someone who wants to buy it: If you buy out the car and sell it on the open market, you may need to pay a sales tax. However, if you already know someone who wants to buy the vehicle, you can ask your local dealership for a lease pass-through, which essentially means it transfers the ownership to a third party without you having to pay sales tax on the deal.
Can You Negotiate a Nissan Lease Buyout?
The short answer is yes, you can negotiate your Nissan lease buyout. You better have good reasons, though, as your lender probably operates under tight margins. If your contract includes a negotiation option, and your Nissan is worth more than its residual value, get an estimate on its current value and gather some concrete offers from dealerships. You can use these as leverage in your negotiation. Make your lender a concrete offer, and it may accept it or meet you in the middle.
Nissan Buyout Fees and Rates
Here are some typical fees you may have to pay when buying out your Nissan, plus their likely rates:
Residual value: As mentioned earlier, the main fee is the car's estimated price at the end of your lease, called its residual value.
Purchase option charge: Some leasing contracts include a fee for buying a vehicle out, called a purchase option charge. It's usually a few hundred dollars.
Early termination fee: If you decide to buy out your Nissan before your leasing contractual period ends, you'll likely have to pay an early termination fee. The rate varies according to your leasing company and lease contract terms, but it's usually a percentage of the remaining lease payments.
Sales tax: Buying out your Nissan lease may mean paying a sales tax. The exact conditions and rates typically depend on your state laws. Local sales tax may also apply.
Title transfer and registration fees: After buying out your Nissan, you'll need to take it to your local Department of Motor Vehicles and register it under your name. This usually requires you to pay further fees and taxes.
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