At this point you should know how you’re going to buy your leased car — with cash or a loan — and prepare to do so. With one month or less to go before your car lease ends, you should not face any early termination fees or penalties. The lessor shouldn’t charge you, say, $15, for completing the paperwork and buying your vehicle a day early. But read your contract or contact your lease provider if you have any questions.
Cash lease buyout
If you do want to buy out your lease in cash, talk directly with your lease provider who will help you arrange the transaction and transfer paperwork. If you’re debating whether to buy it outright or get a loan, consider financing half of it and getting a lease buyout loan for the other half. This would leave some of your liquid assets free either for investing or just as a cash cushion. Only financing half the car’s value would mean a better loan-to-value ratio and a potentially improved rate.
Financed lease buyout
Most auto loan approvals are good for 30 days, which is why you want to apply for them when you have about a month left to go on your lease. Apply to a few lenders of your choice, such as your local credit union, a national bank or online lender. Don’t apply to just one place — see what a few lenders offer and take the loan that best suits you
Applying may cause a temporary drop in your credit score, but multiple applications don’t hurt your score any more than one, as long as you file all applications within a two-week period. The credit reporting bureaus allow this window of time specifically so consumers can rate shop without undue penalty. Plus, the benefits of shopping around for an auto loan should outweigh any cons.
Once you have chosen the right loan offer for you, contact the lender and complete the paperwork process to secure the loan. The lender will coordinate transferring the title and all paperwork. They may send you a check to use to pay your current lender, or they may send a check to the lease provider directly.