Yahoo Autos Here's How To Buyout Your Jeep After Your Lease Ends
A Jeep lease buyout allows you to purchase your leased vehicle. You can do this through the dealership or obtain a buyout loan from an external lender. Exploring your car's value and your lease buyout options can help you prepare before your vehicle is due back at the dealership.
In this article, you'll learn everything you need to know about the Jeep lease buyout process, including how to determine your car's value and a few negotiation tips. You'll also discover what fees and costs you can expect during the buyout procedure.
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Jeep Lease Buyout Process
A Jeep lease buyout allows you to purchase your vehicle at the end of your lease agreement. The process includes the following steps:
Decide When to Buy Out Your Lease
You can buy out your Jeep lease in the middle or end of your lease agreement. An early lease buyout occurs before your lease ends. A lease-end buyout occurs at the end of your agreement, usually before the turn-in appointment. While most leasing companies allow both options, an early buyout can incur extra fees.
Do Your Research
Before contacting your leaseholder to discuss buyout choices, you'll want to understand your vehicle's worth. Find out how much similar Jeep vehicles are selling for in your area, including their year, make, model, and condition.
Chrysler recommends considering your lease buyout options at least 90 days in advance. They list your options at the end of your current lease term as follows:
Lease a new vehicle.
Purchase a new vehicle.
Purchase your current vehicle.
Chrysler also suggests you schedule a pre-inspection approximately 60 days before the end of your lease agreement to avoid any trade-in hassles. This can give you a better idea of your vehicle's overall condition and value, which can help with negotiations. The great thing about the pre-inspection process is that it's free if you schedule an appointment directly through Chrysler.
Contact Your Leaseholder
You'll want to contact your Jeep leaseholder (The Chrysler Group) to discuss your buyout options. Let Chrysler know you're considering buying out your current lease. Some lenders may contact you a few months before your lease ends to discuss your options. However, if you haven't heard from Chrysler within 60 days before the close of your agreement, it may be worth initiating the conversation.
Decide on an Offer Price
Determining your car's market value can help you negotiate with Chrysler to find the best buyout price. You can use Kelley Blue Book to determine the current market value of your Jeep.
Be sure to also factor in mileage, wear and tear, and the vehicle's overall condition. You'll also want to compare the buyout purchase price with the cost of buying or leasing a similar car.
Determine Financing
You'll need to determine how to pay for your lease buyout. Chrysler may offer to finance, but comparing rates from other lending institutions is also a good idea. Interest rates and monthly payments on your buyout loan will vary depending on your credit score, income, and down payment amount.
Remember that changing financing could result in your monthly payments increasing or decreasing. While staying with Chrysler may result in similar monthly payments, you can expect higher financing rates. However, if you opt for a new lender, and your credit score is lower or you have a small down payment, your monthly payments may rise.
Complete the Necessary Paperwork
Chrysler requires that you complete a Leased Odometer Disclosure Notice and Statement when buying out a lease through them. You can download and print this form on the Chrysler website or contact your dealer for a copy. You'll need to send the form signed by you and a Chrysler Capital representative to the Fort Worth, Texas, central office.
Identify a Backup Option
At the end of your lease term, you and Chrysler may not agree on a fair price. This is why having a backup choice is beneficial. Plan for a lease buyout or an alternative vehicle buying or leasing option at least 30 days before your lease ends. If you need more time, you may also have the option to extend your contract at the end of the agreement.
Is a Lease Buyout Worth It?
Buying out your Jeep lease may be worth it, especially if its value is higher than the buyout price. Completing a few calculations can help determine whether a lease buyout on your Jeep is worth it.
Compare the residual value of your Jeep against its market price. Residual value refers to the value of your vehicle at the end of its lease. Market value is the car's retail value or the price you could likely get if you were to sell it in your area today.
If your vehicle's market value is lower than its residual one, a lease buyout may not be the best option, because this means you owe more than it's worth. You may be able to obtain a new lease or Jeep at a more affordable rate. Jeeps with premature wear and tear, high mileage, or a history of accidents may not be worth buying out because of their lower values.
However, a lease buyout may be a good financial decision if your Jeep's market value exceeds its residual value. This means that your vehicle is worth more than what you owe.
A lease buyout releases you from your lease contract and gives you ownership of your Jeep. Once you own it, you're no longer subject to premature wear and tear or excess mileage fees. However, you may also lose coverage for basic maintenance or repairs, so you'll also want to factor this into your costs.
A lease buyout may be worth it if:
You like your Jeep and don't want to buy a new car.
You have exceeded your mileage allowance on your Jeep.
You have used significantly fewer miles than allocated.
Your vehicle is worth more than its buyout price.
Excess wear and tear or damage to your Jeep will incur expensive fines at turn-in.
Can You Negotiate a Jeep Lease Buyout?
Yes, you can negotiate a Jeep lease buyout. Your leaseholder doesn't have to agree to your offer, but it could still help you secure a better deal. Chrysler will consider a few factors, such as:
The overall condition of your vehicle.
Your car's residual value.
How much the dealer could lease or sell your Jeep for after the trade-in.
Whether or not you're current with your lease payments.
Even if Chrysler isn't willing to negotiate a lower buyout price, choosing a lease buyout loan through a lender with lower interest rates could help you save.
Negotiations on lease buyouts typically depend on the value of the trade-in. Most leases last two to three years, enough time for a vehicle's value to depreciate. Additional factors, such as the number of miles on the vehicle and whether you were involved in any accidents, also affect how fast its value decreases.
Jeep Buyout Fees and Rates
A Jeep buyout may incur some fees. Understanding the expected costs can help you decide if it's the right financial decision for you. The easiest way to calculate your buyout cost is to review the buyout amount on your lease statement. Some lenders may also charge a lease buyout fee. However, you'll also likely save on some fees.
For example, most dealers include a disposition fee, which is a cleaning and replacement charge that prepares your lease for sale or lease after you return it. You can avoid paying this fee if you purchase your Jeep lease. If you use a loan to fund your lease buyout, you'll also be subject to financing fees and down payment requirements.
A Jeep lease buyout can be a great decision if your vehicle has maintained its value over the life of the lease and you still enjoy it. Deciding whether it's a good idea requires calculating the value of your car and its buyout price. A lease buyout allows you to purchase a vehicle you have already been driving without having to deal with the hassle of buying or leasing a new car.
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