Around 90 days before your lease ends, the lender will contact you about next steps. You have four options, and they are not equally good in every situation.

Before choosing, do one piece of arithmetic.

Check for equity first

Find the residual value in your contract. That is the price you agreed to pay if you buy the car. Then check what the car is actually worth: get a real offer from a couple of dealers or online buyers, not just an online estimate.

  • Market value above residual means you have equity. That money is yours to capture, and it changes which option is best.
  • Market value below residual means the car is worth less than the agreed price. That is the lender's problem. Hand the keys back.

This is the single most valuable thing you can do at lease end, and it takes an afternoon. People routinely return cars carrying thousands in equity because nobody told them to check. Background in residual value.

Option 1: Return it

Hand the keys back and walk away.

Costs: a disposition fee, typically $350 to $500, plus any excess mileage at 15 to 30 cents a mile and any excess wear and tear.

Best when: the car is worth less than the residual, you are within your mileage, and the condition is good.

Before you do it: book the pre-return inspection. It tells you what you would be charged while you can still do something about it cheaply.

Option 2: Buy it

Purchase the car at the residual price in your contract.

Costs: the residual, plus taxes and any purchase option fee. No disposition fee, and no mileage or wear charges, because you are not returning it.

Best when: the car is worth more than the residual, you are well over your mileage, there is cosmetic damage, or you simply like the car and it has been reliable.

You do not need the cash. Lease buyout loans are a standard product. Full detail in is a lease buyout worth it.

Option 3: Trade it

Use the car as a trade toward your next one.

If there is equity, it becomes your down payment on the next vehicle. Get the equity figure in writing before discussing the new car, or it has a way of disappearing into the new deal.

If there is negative equity, it can sometimes be rolled forward, and that is usually a bad idea. Trading in while upside down explains where the line is.

You do not have to trade with the same brand. Any dealer will buy the car from the lender, and the one that gives you the best number is the one to use.

Option 4: Extend it

Many lenders will extend month to month, often up to six months, at roughly the same payment.

Best when: you are between decisions, the car you want is not available, or you need time to sort out financing. It is the cheapest way to buy yourself a few months.

Watch: whether the factory warranty has expired, because repairs become yours during an extension. Confirm the mileage terms too, as they usually keep accruing.

A timeline that avoids the rush

90 days out. Find your residual. Get real market values. Decide roughly which way you are going.

60 days out. Book the pre-return inspection if you might return it. Start looking at the next car if you are replacing it.

30 days out. Fix anything cheap that the inspection flagged. Confirm your return appointment or finalise the buyout.

Return day. Take photographs of the whole car and get a signed condition report. If a charge appears later that you disagree with, that evidence is what settles it.

The mistake to avoid

Doing nothing until the lender calls, then returning the car because it is the path of least resistance.

If the car is worth $3,000 more than the residual, returning it hands $3,000 to the lender. There is no rule requiring you to. Check the number first.

If you would like us to run the equity check and tell you honestly which option wins, send us your car and residual. It is a short conversation and it regularly finds money.