 TITLE: Should You Buy Your Car When Your Lease Is Up? CONTENT: Does buying your leased car make financial sense? Ask yourself these questions to decide.\n*   **Can you afford a cash buyout or will you need a loan?** Consider your budget and use an online auto financing calculator to estimate your car payments for various loan terms and interest rates. Since the vehicle you're buying is already a few years old, try to keep your loan term as short as possible. Longer loan terms mean lower payments, but you'll pay more in interest and could even end up with negative equity—that is, owing more on your loan than the car is worth.\n*   **Is the vehicle worth buying?** To see if the car is really worth the residual value listed on the lease, use the appraisal tools on Edmunds, Kelley Blue Book, NADA and other automotive websites. Research what local dealers and private parties are asking for the same make, model and year of car. Take the average of all those prices to come up with an estimate. If the car is worth more than the residual value projected at the start of your lease, buying it could be a bargain. If it's worth less, you may not want to buy it unless you can negotiate a lower buyout price.\n*   **What's the condition of the car?** If you've taken great care of the car and had few mechanical issues, you can buy it with more confidence. Counterintuitively, it might also make financial sense to buy a leased car with dents, scratched paint, torn upholstery or similar damage. When you turn in a leased vehicle with excess wear and tear, the lessor must fix it before selling it, and you'll pay the price. By purchasing it, you'll avoid this fee. You can always repair the damage later if it bothers you.\n*   **Did you exceed your mileage limits?** Leases commonly limit the number of miles you can drive every year without penalty. This limit is typically between 10,000 and 15,000 miles, but high-mileage leases are available. At the end of the lease, you'll be charged for every additional mile driven. If you exceeded your limit by 15,000 miles on a three-year lease with a $0.25 per mile fee, you'd be on the hook for $3,750 in excess mileage when you turn in the car. Buy the car and you won't have to pay.\nAlso consider any other savings or costs from buying a leased car. For example, you'll generally pay less for registration and insurance for an older car than a newer one. However, older cars are typically more prone to mechanical problems and need more maintenance than new ones, which could mean higher repair costs. END