Supply Chain Shortages
Supply chain woes have led to chip shortages, plant shutdowns, delayed releases of new cars, and other disruptions to the automotive industry. These big-picture industry woes might make it advantageous to purchase your leased vehicle.
“If your leased car is in great condition and has a high resale value—which is likely considering used car values have been at all-time highs—it might be worth considering purchasing the car with your own cash or a lease buyout loan,” Lynch says.
Available inventory for both used and new cars is low, compared to the demand for them. And when demand outstrips supply like this, prices rise. Your leased car may be worth more than the residual price you’d have to pay to purchase it. Plus, it also means that leasing or purchasing a new or used car might be pricier now.
Your Financial Picture
Your personal finances are a big consideration as you determine the next steps when your lease ends. You’ll need to ask yourself if you can afford to purchase your leased vehicle. “It won’t be wise if you buy the car but you struggle to keep a decent budget,” Zhou says. And, take a moment to consider your credit score, too, since you’ll most likely need to qualify for a loan, he notes.
Even if you’re opting to end the lease, but will still need a car, you’ll need to consider your financial picture and what you can afford, particularly in a volatile market.
The Car’s Condition
Another factor to weigh: how well you’ve maintained the car. If you’ve never detailed the car, replenished fluids, or rotated the tires, you may be better off with a fresh start.
If the car isn’t in top-notch condition, “you might be hooked on big expenses on car maintenance and repairs moving forward,” Zhou says.