 What
to do when truck lease is up
|
 Dear
Terry,
I have a truck that is coming up to the end of its lease. The dealership is asking me if I want to end the lease and turn it in or go into another lease with a new truck. The dealer says that if I turn in the old truck and lease a new one I don't have to give a down payment. To keep the truck I have now I would have to buy it for its value price, which is about $10,000. Are there any other options that I may have?
-- Richard E.
 Dear
Richard,
Well, you could just turn the truck in and walk home. The first
thing you have to come to grips with is that you don't own your
truck -- the leasing company does. So you are obligated to return
the vehicle at the end of the term and, if it's a closed-end lease,
walk away.
What most people do is turn in their leased vehicle,
get a new one and then continue with payments. As the dealer said,
you can also buy your truck for the "residual
price" you agreed to when it was new. The problem with that
last choice is that if you take out a loan to cover the residual
price, you'll likely end up essentially having a seven- or eight-year
loan -- the term of the lease plus the term of the subsequent loan.
You will wind up having paid an enormous amount in
interest over the life of the two transactions and, since vehicles
usually need more repairs after the fifth year, you could be faced
with both car payments and significant maintenance bills.
You can also take a look at the services that try
to match lessees with individuals who are interested in taking over
their leases, such as Swapalease.com
or LeaseTrading.com.
There are costs associated with this process, and once again your
lease agreement has to allow a lease transfer, but it is something
for you to consider in your quest to end your lease agreement.
But, unless you're over the contract or agreed-upon miles -- or
unless the trucks is not in very good shape and you'll be on the
hook for repair costs -- you'll probably be better off turning in
your vehicle and leasing a new truck.
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If you have a question for Terry, e-mail him at
Driving for Dollars.
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