It is possible to pay off a vehicle lease early in Canada, depending on who the lease is with. Most leases in Canada have a “buyout” or “residual” at the end of the term. In most cases this buyout will need to be paid before the client owns the vehicle completely. When you purchase a vehicle with a lease the vehicle is dual owned until the vehicle is paid in full. Unlike a finance contract, the lender who leases you the vehicle will be named on the registration as a lessor, as well as the purchaser. On a car loan Canada only the purchaser is listed on the registration. In both cases the lien holder will be listed on the Insurance. In both cases full coverage will be required when insuring the purchased vehicle.
Back to the early buyout statement on a lease. Their are many lease companies popping up in Canada for car loans. Some of these lease companies have early buyout options. One company that leases vehicles, Finance Today(www.financetoday.ca) has an early buyout option. This means that you can buyout the complete lease early with no penalty for doing so. When you buyout the lease early you would save on interest and lease admin fees. Most leases in Canada will have lease fees attached to the lease, but all leases calculate these fees differently. In the case of the company above, the fees are calculated monthly and therefore will only be paid up until the lease in paid out in full. With Finance Today their is also an option to not have a “buyout” at the end of the term. This means that once the full term is reached and all regular payments are made, then the vehicle becomes owned by the LESSEE, with no additional monies owed at that time.
Long story short, “Yes”, a lease can be paid out early, depending on who the lease is with.
Just my 2 Cents
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