A Guide To Lease-End Options

by Jim Peplinski   Posted on Friday, October 18, 2019

Lease Your Fleet

Letting go – it’s one of the hardest things to do in a relationship. When you’ve travelled a lot of roads together, honouring your commitment while racking up the miles and investing the time for necessary maintenance needed to keep things running smooth, making the decision to say goodbye can be hard. Yes, we’re talking about vehicles here. And how you handle your lease-end options depends on the expertise and offering of the company handling your vehicle leasing.

When you’ve contracted a Canadian leasing company to handle your fleet leasing, you have the advantage of working with an ally who can steer you in the right direction. Your final move will be determined in part by the type of lease that you signed in the beginning, whether that’s an open-end lease or a close-end lease, The advantage of a open-ended lease is that you’ve got options: buy the vehicle, return the vehicle, continue with the lease, or sell the vehicle to a third party. Not all leasing companies offer the same options. It is important to make sure your leasing company offers you the right options. Having flexiblilty in your lease end options is a significant advantage for commercial fleets of all sizes.

Any time there is positive equity in the vehicle and the value of the vehicle surpasses what it costs to buy it, buying or remarketing can be a good option. You can always remarket or sell the vehicle for a profit and apply that money to leasing another vehicle. You can also return the car to the company that leased you the car in the first place. However, in a closed end lease the dealership or vehicle leasing company will reap the benefit of any equity. Only if you opt for an open-ended lease will you receive a cheque for the equity.

Continuing the vehicle lease will extend the payments until such time as the balance is paid or you want out of the vehicle. The outstanding balance will decrease and the depreciation on the vehicle will continue, letting you decide on your terms when and how you want to end the lease.

What is the best option? It really depends on the type of lease you had, the condition of the vehicle and the market value of the leased vehicle. To help you decide the best course of action for your business, talk to a great Canadian leasing company. Call Jim Peplinski Leasing.

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