Your Car Lease is Ending in Calgary? Here Are Your 3 Main Options

That reminder in your calendar is getting closer: your car lease is about to end. It can feel a bit daunting, but it's really just a decision point. In Calgary, like the rest of Canada, you generally have three main paths you can take. Understanding each one will help you make a smart financial choice without the stress.

Let's break down exactly what your end-of-lease options are.

Option 1: Buy Out Your Leased Vehicle

This is exactly what it sounds like. If you've grown to love your car and don't want to part with it, you can purchase it from the leasing company.

The purchase price isn't a surprise; it's the 'residual value' that was set in your original lease agreement. To find this number, just look at your contract or call the finance company.

• Why you might do this: You know the vehicle's entire history, you've taken great care of it, and you haven't had any major issues. Plus, you avoid any potential fees for excess wear or going over your kilometre limit.
• How it works: You'll pay the residual value plus any applicable taxes and fees. Many people don't have this cash on hand, so they get a 'lease buyout loan'. This is just like a standard used car loan, and we can help arrange financing for it, even if your credit has a few bumps.
• Keep in mind: Sometimes the residual value is higher than the car's current market value. Do a quick search on sites like AutoTrader or Canadian Black Book to see what similar cars are selling for in the Calgary area. If your buyout price is fair, it's a great option.

Option 2: Return the Vehicle and Walk Away

This is the simplest option. You just hand back the keys and your lease is complete. You are then free to lease a new car, buy a different one, or go without a vehicle for a while.

However, 'simple' doesn't always mean 'free'. The dealership will perform a detailed inspection, and this is where unexpected costs can appear.

• The Process: You'll schedule a return appointment at the dealership. Before you go, make sure to clean the car thoroughly inside and out, and gather everything that came with it: both sets of keys, the owner's manual, and any accessories.
• Potential Costs to Watch For:
• Excess Kilometre Charges: Your lease had a kilometre limit (e.g., 20,000 km/year). If you went over, you'll be charged for each extra kilometre, usually somewhere between $0.10 to $0.20.
• Excess Wear and Tear: Leases allow for normal use, but significant dents, deep scratches, stained upholstery, or bald tires will cost you. The inspection is quite thorough.
• Disposition Fee: Some contracts include this fee, which covers the dealer's cost to clean, inspect, and certify the car for resale.

Option 3: Trade It In for a New Vehicle

This is a savvy move that many people don't know about, especially when used car values are high. You might actually have equity in your leased vehicle.

Here's how it works: If your car's current market value is *higher* than its residual (buyout) value, that difference is positive equity. It's money you can use.

Example: Your lease contract says the buyout price is $18,000. But due to high demand for used cars in Calgary, its actual market value is $21,000. You have $3,000 in positive equity.

• How to use it: You can 'sell' the car to the dealership for its market value. They handle the transaction, pay off the $18,000 to the leasing company for you, and you can apply the remaining $3,000 as a down payment on your next car, whether you choose to finance or lease again.
• Why it's a great option: It turns a liability into an asset. This is the best way to leverage a well-maintained, low-kilometre vehicle at the end of its term. It also allows you to bypass any disposition or wear-and-tear fees you might have faced by simply returning it.

Which Path is Right for You?

Choosing the best end-of-lease option depends entirely on your situation. Ask yourself these questions:

• Do I still love this car? If yes, and the buyout price is fair, buying it is a solid choice.
• Did I stay under my kilometre limit? If you went way over, buying it out might be cheaper than paying the penalty.
• Is the car in good shape? If it has a few dings and scratches, buying it or trading it in helps you avoid wear-and-tear fees.
• Is the buyout price lower than the market value? If so, trading it in to capture that equity is the smartest financial move.
• Am I ready for something new? If you're clean on mileage and wear, a simple return gives you a fresh start.

Whatever you decide, the key is to know your options a few months before your lease ends. This gives you time to assess your vehicle's value, review your contract, and make a decision that benefits you, not just the dealership.