Love Your Lease

 
 

Love your Lease?

Considering a lease buyout? Unity Catholic Federal Credit Union can help you keep driving the car you love.

How a lease buyout works

Understanding your lease agreement is most important! If a buyout option was part of your lease agreement, typically you will have the option to buy your leased vehicle at the end of the lease term. If you opt for a lease buyout when the lease is up, the price of the vehicle will be based on the vehicle'sresidual value—the purchase amount set at lease signing, based on the predicted value of the vehicle at the end of the lease.

An example of a good lease buyout

The buyout price listed in your contract is $14,500. If you return the car to the dealership, you would have to pay, per your contract, $1,250 in excess mileage fees and $850 in excess wear-and-tear charges. But the car is in great mechanical condition currently valued at $14,500 just as predicted, even after considering the excess mileage and wear-and-tear. You love the car and are able to finance the buyout with affordable payments.

An example of a bad lease buyout

The buyout price is the same at $14,500. You followed the lease terms exactly. Had no excess mileage charges or excess wear-and-tear. While the car is in excellent condition, its appraised value is only $10,000 in its current condition. Even if you love the car, taking advantage of a lease buyout in this situation may not be ideal. You could likely buy a similar car in similar condition for $10,000 elsewhere. If you did complete the buyout, you’d be paying $4,500 over the value of the car just to keep it.

What to consider before buying out your lease 

Consider these factors when determining if it’s a sound financial move. 

  • The value of the car in its current condition 

  • The mechanical history of the car 

  • Whether you’ll have to pay excess mileage charges 

  • Whether you’ll have to pay reconditioning or excess wear-and-tear charges 

Bottom line 

Depending on your situation, a lease buyout could make sense. Running the numbers with our Auto Loan Specialist at Unity Catholic Federal Credit Union could help you keep driving the car you love! Right now receive an extra 0.25%** of your qualifying rate when you buy out your lease with Unity Catholic Federal Credit Union. Rates are as low as 1.74%APR* and enjoy 90 days till 1st payment 

Fine Print *APR = Annual Percentage Rate, the rate of 1.74% includes the**maximum discount of 1% off qualified rate on lease vehicle buyout. Estimated payment for $1,000 financed for 48 months at 1.74%APR is $22.00. A $100 document preparation fee may be financed. Offer and rate may vary depending on individual credit history. All loans subject to credit approval. Interest will begin to accrue during the deferral period. Deferring your payment will result in your having to pay higher total finance charges. All UCFCU programs, rates, terms and conditions are subject to change at any time without notice. No prepayment penalties apply. This credit union is federally insured by the National Credit Union Administration. Additional insurance of $250K available through ESI. 01/01-03/31/22

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