Your Lease Is Ending: Four Options and How to Evaluate Each

Option 1: Turn In and Walk Away

The simplest option. You return the vehicle to the dealer, pay any disposition fee (typically $300-$450), settle any excess mileage or wear-and-tear charges, and you're done. No further obligation.

This makes sense when the vehicle's market value is at or below the residual value (no equity), your mileage is within the allowance, the car has no damage beyond normal wear, and you're ready to move on to something different. The disposition fee is unavoidable in most contracts — it's the leasing company's cost to inspect, recondition, and wholesale the vehicle. Some manufacturers waive it if you lease another vehicle from the same brand, so ask before paying.

Option 2: Purchase at the Residual

Every lease contract includes a purchase option at the predetermined residual value, plus any applicable fees and taxes. This option is valuable when the vehicle's current market value exceeds the residual — meaning you have equity.

To evaluate: look up your vehicle's current retail and trade-in value on KBB, Edmunds, or Carvana's instant offer tool. Compare that to your buyout amount (residual plus purchase fee plus tax). If market value exceeds the buyout by $2,000 or more, purchasing is worth serious consideration.

Even if you don't want to keep the car, buying it and immediately selling or trading it lets you capture the equity. A vehicle with a $22,000 residual buyout and a $26,000 market value has $4,000 in equity — money that evaporates if you simply turn in the keys.

One important note: some captive lenders have restricted third-party buyouts in recent years, meaning they won't allow you to buy the vehicle and immediately sell it to Carvana or a third-party dealer. They want you to buy it personally (which means paying sales tax) and then sell it separately. Check your leasing company's current policy before planning this strategy.

Option 3: Lease a New Vehicle from the Same Brand

Re-leasing from the same manufacturer often comes with loyalty incentives that aren't available to new customers. These can include waived disposition fees on the outgoing lease, loyalty cash ($500-$1,500 applied to the new lease), and preferential money factors or residual adjustments.

The math on loyalty programs varies significantly by manufacturer and by month. Toyota and Honda tend to offer modest but consistent loyalty bonuses. BMW and Mercedes run more aggressive pull-ahead programs that let you exit your current lease 2-3 months early without penalty if you lease another vehicle from the brand.

The trap: loyalty incentives can create the illusion of a good deal on a new lease that isn't competitively priced on its own merits. A $1,000 loyalty bonus on a lease that's $40/month more expensive than a competing brand's offer costs you $440 over 36 months. Always compare the loyalty deal to the open market. The loyalty bonus is real money — but only if the underlying deal is competitive.

Option 4: Lease or Buy from a Different Brand

Sometimes the best move is to leave entirely. If the outgoing brand's current lease programs are uncompetitive, if your driving needs have changed, or if another manufacturer is running aggressive conquest incentives, switching brands may save you more than any loyalty program.

Conquest incentives are offers specifically designed to lure customers away from competing brands. They typically require proof that you currently lease or own a competitor's vehicle. These can be substantial — $1,000-$2,500 in lease cash — and they stack with other incentives.

The cost of switching is the disposition fee on your outgoing lease ($300-$450) plus the loss of any brand loyalty benefits. If the conquest deal on the new brand saves you $2,000 over the lease term, the $400 disposition fee is a minor cost of switching.

We evaluate all four options for every client approaching lease maturity. The right answer depends on the specific equity position, current incentive programs across brands, the client's driving needs going forward, and the rate environment. There's no default — each option gets a real financial comparison.

Timeline: When to Start Evaluating

Begin the evaluation 90 days before your lease maturity date. This gives you time to get the vehicle appraised, review current incentive programs, and negotiate without the pressure of an imminent turn-in deadline.

At 90 days: check your vehicle's market value against the residual buyout. If there's significant equity, start thinking about Option 2.

At 60 days: contact your leasing company about lease-end procedures, disposition fee amount, and whether any pull-ahead programs are available. Start shopping competitive lease and purchase offers.

At 30 days: schedule your pre-inspection if turning in (many leasing companies offer this — it identifies any wear-and-tear charges in advance so you can address them or get repair estimates). Finalize your decision.

The mistake most lessees make is waiting until the final week, panicking, and defaulting to whatever the dealer offers. The dealer benefits from that urgency. You don't.