Lease-end Buy-out: What you need to know at the end of your lease
Your options at lease-end
Your lease-end options depend on the terms and conditions of the lease agreement that you signed in the beginning of your lease. For example, your lease agreement should specify if
- the vehicle can be returned at the end of the lease with no further obligation, except any damage and excess mileage charges or any other requirements set by the lease agreement; or
- you can exercise your right to purchase the vehicle, often based on an agreed upon residual value or amount.
If you purchase at lease-end
A lease-end buy-out is considered a separate motor vehicle transaction. When you purchase the vehicle after the lease ends, the dealer is required to declare the vehicle meets the minimum requirements under the law, including safety.
A vehicle inspection is not mandated, so it is up to the dealer to choose how to meet this requirement. It can be through the review of past services records, a recent warranty inspection, a provincial Private Vehicle Inspection (PVI), or other means.
Lease-end inspection fees
When a lease-end inspection is done, your lease documents should clearly state who is responsible for any lease-end inspection fees and repairs. A dealer may not say you must pay for a lease-end inspection, unless you agreed to it at the time of signing the lease. You should question a dealer if they:
- Want to charge an inspection fee, even if a warranty inspection has been completed very recently
- State that you must pay for repairs when you are not required to
- Require you to have an inspection done at that dealership (unless the lease documents require this)
- Charge you a higher than normal price for an inspection. As a helpful guide, call ahead and check with the dealer’s service department on the regular cost of a safety inspection for your vehicle.
Helpful tips
- Read the front and back of any agreement carefully and understand all the terms and conditions. Ask questions if anything is unclear
- Know your lease-end options prior to signing a lease agreement
- Consider any possible penalties and/or charges that may be added if you opt out of the lease early, exceed kilometre limits, or need repairs beyond normal wear and tear
Resources
Know How Leases End
Dealer Obligations
VSA Buying Guide
If you have any questions, please contact
VSA Consumer Services.
NOTE: This is to provide general information and is not intended to be legal advice.
