Tips and recommendations 

Do you owe money at the end of a car lease?

Leia Doyle

Do you owe money at the end of a car lease?

When your car lease ends, you may think you’re even with the dealer. But you’ll often find you still owe money because of what’s called a disposition fee. This fee, which typically runs $300 to $400, covers the dealer’s costs of putting the vehicle back onto the market to sell as a used car.

How do you value a car at the end of a lease?

Multiply the MSRP by the residual value percentage rate. For instance, if the car’s MSRP is $22,000 and the residual value is 50 percent, then 22,000 x 0.5 = 11,000. At the end of the lease, the residual value in the car is $11,000.

What happens to a totaled leased car?

If your leased car was totaled and you were at fault, you’ll need to file a claim against your personal collision or comprehensive coverage. Your insurance will typically pay out the current value of your car. As discussed previously, this does not release you from the obligations of your lease agreement.

What happens if someone hit my leased car?

No, an accident does not affect a car lease. You still owe the leasing company for the value of the vehicle when an accident occurs. You may also have gap insurance that pays the difference if you total a leased car, and you suddenly owe the leasing company for the entire value of the vehicle.

How can I get my car after a total loss?

Steps to Getting a New Car After a Total Loss

  1. Promptly report the claim.
  2. Inquire about a replacement vehicle.
  3. Tow the vehicle to a preferred auto body shop.
  4. Find your paperwork.
  5. Get loan details on the payoff amount for your car.
  6. Research how much your car is worth.
  7. Submit documents as they’re made available to you.

Who pays for damage on a leased car?

If your car gets totaled, your insurance typically pays you for the current, actual value of the vehicle. However, you still owe the leasing company for the remaining payments under the lease. For example, consider you’re in an accident in your leased vehicle. The current value of the vehicle is $5,000.