You do typically pay more in finance charges depending on how long you finance for at the end of the lease unless you got a killer deal on the lease up front.
That's getting harder to get, for an Edge or MKX. When you lease, your are contracting for the full amount of the car and paying back only the deprecation. Finance companies used to base the payments on this estimated amount until gas prices caused SUV's to deprecate faster, leaving them to take the car back and sell at a loss. To offset this possibility, they usually charge an additional percent or so on SUV's and the like, for possible accelerated deprecation. Sometimes you can get a better deal near year end to clear the lot, but it's always prudent to run the numbers just to be sure.
The other advantage to doing that is if you don't like the vehicle or just decide not to keep it you can walk away. Or if the market drops and the buyout is too high you can walk away
Actually, walk away after the settlement by all parties involved.
There's a hidden cost at the termination that most people never consider. All leases have a clause that reads that you will return the car in the same shape that you rented it, minus normal wear and tear.
Normal wear and tear does NOT include door dings, wheel rash, scratches, windshield chips, etc. You, as the lessor are responsible for repairing all of these; whatever wasn't there when it was new. If you don't the dealer or finance company will send the car to a body shop and have everything fixed, on YOUR dime. (And consider how much a new wheel costs). You could easily spend and extra $500 or more at turn-in time.
And the inspection by your dealer is not the last word. You rented from a finance company and they have the last word. After you turn it in and walked away, you can still get a bill from your finance company for something they found and was not fixed by the dealer. And you will pay because it is in tbe contract.
You must consider all the costs when you rent, usually you get by in laying out less money each month (renting advantage), but the cost interest of renting is much higher. Add the up front costs of contract creation and several other hidden costs (sometimes added in by the dealer to run the paper, etc.), and you may be laying out more than you think.
Keeping the car at the end of the lease is the same as buying it on the lot. However you do know all of its previous history and may be able to avoid having to lay out $$ for dings, etc. It all comes down on how long do you intend to keep the car.
Edited by enigma-2, 17 May 2017 - 02:48 PM.