# End of Car Lease Financing Options



## ions (Mar 23, 2012)

Hello Members,

My car lease is up in mid June and the buy out cost is $10,600. I am undecided if I will buy it or return it, but suppose I buy it, what are my options for financing this purchase? Will the dealer offer me financing? Will the bank offer me a car loan?

I currently have an Unsecured line of credit at 6% I can use to finance the purchase. Is this my best option if I decide to buy it?


Thank you.


----------



## sags (May 15, 2010)

The dealer will offer financing options, but likely the interest rate will be higher than the line of credit, as it is considered "used car" financing.

But, it would be a fixed rate for the term.................as opposed to a floating rate, in case interest rates creep upwards.

As a used car, you will have to pay for a safety check, e test, and taxes on the purchase.

It is probably best to visit your dealer's finance department to find out the rates.


----------



## ions (Mar 23, 2012)

Thank you sags. 

Environmental Test and Safety check on a 4 year old car with 70,000 KM?

I presume the tax I will have to pay is HST?

Thanks.


----------



## sags (May 15, 2010)

Yea, it seems dumb for an almost new car...........but that's the way it is in Ontario at least.

HST for sure...........don't know about air conditioning levy etc.

If they try to sell you a third party warranty............read the fine print carefully.


----------



## ions (Mar 23, 2012)

Thank you sags


----------



## Phoenix (Jun 6, 2009)

How you finance the buyout is up to you. 
The dealer will try to get you to lease another car as there is more money in it for them.
If you decide to buy out, be wary of an "administrative Fee" charge by the dealer ($500.00???). You may be able to sidestep this fee by dealing directly with the finance company.
I would recommend that you start the process with the dealer early (in April), so that you know what your options and costs will be.


----------



## ions (Mar 23, 2012)

Thanks Phoenix.

I will go to the dealership in a few weeks to get an oil change and will talk to them about a buyout. 

Thanks for the heads up about the hidden fees.


----------



## ions (Mar 23, 2012)

I was at the dealership today and decided I want to purchase the car once the lease is expired. 

The "administrative fee" is around $500 but I was told this cost is not for the financing setup but rather for changing ownership.

They offered me 4.99% on an open 5 year term loan.

I wanted to know if this is a good rate for a car loan.

Thank you.


----------



## praire_guy (Sep 8, 2011)

Don't pay the fee. It costs the dealership to auction off the car so you are doing them a favor. 

If your not happy with the buyout price, write down your vin and buy it yourself at auction.


----------



## ions (Mar 23, 2012)

Praire_guy. Are you saying to return the car and then try to buy it myself at auction? 

1) I thought I cannot buy at auction only licensed dealers can.

2) My buyout price is $10,600 but according to the dealership the car is worth $13,500 because of how well I kept it and the low 67K km. If I return it it will cost more at auction than my buyout price I believe.

Thanks


----------

