Leasing a car is a great way to try before you buy, so to speak. Often, lease payments are far more affordable than car loan payments, and you'll essentially enjoy a 1-3-year trial period before you have to decide if you want to trade it in for a newer model, opt out and look for something else, or commit to ownership.
If you've taken great care of your vehicle, you'll know it's reliable by the time you're ready to buy, and if you've beaten it up a bit or exceeded mileage restrictions, buying allows you to avoid return penalties. Even better, by the time you buy, you'll have paid off a portion of the car's value, meaning you'll take on a smaller loan than you would by purchasing the same car brand-new (like a certified pre-owned). Plus, you can still negotiate the purchase price (although you'll probably have to speak with the lease-end manager).
For those who fall in love with a lease vehicle, there are a lot of advantages to buying outright when the lease is up. The only question is: How do you go about it?
Take Your Time
If you know you love your car, it can be tempting to buy it before the lease expires, but this is a mistake for two reasons. First, there could be potential fees for early buyout, whereas waiting until your lease agreement ends might make the entire process easier and help you avoid penalties.
In addition, you want to get a car loan for the lowest amount possible, and the more payments you make under your lease agreement, the more you whittle away the price of the car. A smaller car loan equates to fewer interest payments, all things being equal.
Negotiate Like a Boss
Haggling is expected when buying a car, and you have to go in with a solid strategy to get the best price. First, try not to be over-eager. Even if you know you want the car, act as though you're undecided when the leasing company contacts you prior to the lease expiring. Hint that you'd be open to buying if the price is right.
Next, do your homework by comparison shopping lenders so you can use competitive offers as leverage. If another lender is offering better terms for financing, don't hesitate to use it as a bargaining chip to secure a lower price or a better rate. Finally, ask if the leasing company is willing to eliminate some fees, like the purchase-option fee.
If you love your lease and you want to buy, the best thing you can do is wait until your lease is up, check out financing options, and see if your leasing company is willing to drop the sticker price, offer lower interest rates, eliminate fees, or all of the above.