From Car and Driver · Ashley Donohoe · · 2m
Car Lease Buyout Math Check
Calculate if buying out your car lease makes financial sense before the end of your lease term.
In brief
Calculate if buying out your car lease makes financial sense before the end of your lease term. Buying out a car lease may save money if the car's market value exceeds the buyout price. Originally reported by Car and Driver.
Quick answers
- What Is a Lease Buyout?
- A lease buyout lets you purchase your leased vehicle before or when the lease term ends.
- When Is Buyout Worth It?
- Buying out the lease may save money if the car's market value exceeds the buyout price.
- What is the key takeaway from Car Lease Buyout Math Check?
- Buying out a car lease may save money if the car's market value exceeds the buyout price.
What Is a Lease Buyout?
A lease buyout lets you purchase your leased vehicle before or when the lease term ends.
Lease-End Buyout Option
You can buy the vehicle at lease end if you like your car and don't want to hassle with starting a new lease.
Early Lease Buyout Option
Purchasing before lease end may incur early termination fees but avoids wear and tear costs.
Calculate Residual Value
The residual value is the vehicle's expected worth at lease end and is stated in your lease agreement.
Check Market Value
Use the Car and Driver car value calculator to find your vehicle's current market worth based on location, make, model, age, and condition.
Compare Values
If market value exceeds residual value, buying out the lease may make financial sense.
Add Taxes and Fees
Plan for local and state used car sales taxes, licensing, registration fees, and potential purchase option fees.
Shop for Financing
Contact banks or credit unions for competitive lease buyout loans with lower interest rates if you have good credit.
Negotiate Buyout Price
Ask leasing companies to waive purchase option fees or offer financing discounts if you negotiate.
Wait for Leasing Company Contact
Let your leasing company make the first move by waiting for their contact within 90 days before lease expiration.
When Is Buyout Worth It?
Buying out the lease may save money if the car's market value exceeds the buyout price.
Final Decision
Read your lease terms to ensure buyout eligibility and fees before proceeding with the purchase.
Financial Check
If market value is higher than buyout price, buying out the lease may be financially beneficial.
The big picture
Buying out a car lease may save money if the car's market value exceeds the buyout price.
