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The Lease is Up--Should You Buy the Car?

Your auto lease gives you a right to buy the vehicle for a fixed price at the end of the lease. But should you? If you have less than three months remaining on a lease, now's the time to decide. So, find your lease and read on.


- Do you like the car? If it's generally performed as you liked with a minimum of unexpected cost and repair, good.

- Will it still fit your needs? If you're driving a two-seater sports car but are expecting quadruplets, you probably need a new car. But if you're driving a van and plan to remain a soccer team mom or dad, your current vehicle still fits the bill.

- What is your lease-end buying price? You'll find the buying figure in your lease's small print. Let's assume $14,000.

- What is your vehicle actually worth? Check Web sites such as Kelley Blue Book (kbb.com) and Edmunds.com Let's assume your highest wholesale value is $15,000.

- How does your vehicle's wholesale value compare with its lease value? You're a winner as long as the amount the dealer offers is more than the amount your lease says you must pay. In our example, your lease says you can buy for $14,000. You've confirmed wholesale value of $15,000. You're buying a car you know and like for $1,000 less than its wholesale value. Buy the car.

- What if wholesale value is less than the lease value? If it's a lot less, don't buy the car. For instance, your lease says you can buy it for $14,000, but its wholesale value is only $11,000. Why pay a $3,000 profit to the leasing company?

- What's the bottom line? If your lease car is a good friend, and you can buy it for no more than $1,000 over wholesale value, that's a smart buy. Your next smart decision is to finance it at Denali Alaskan Federal Credit Union.


Copyright 2008 Credit Union National Association, Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.