{"id":38783,"date":"2022-04-12T12:06:23","date_gmt":"2022-04-12T12:06:23","guid":{"rendered":" https:\/\/dev.way.com\/blog\/?p=38783"},"modified":"2022-07-11T09:39:43","modified_gmt":"2022-07-11T09:39:43","slug":"how-to-buy-out-a-car-lease","status":"publish","type":"post","link":"https:\/\/dev.way.com\/journal\/how-to-buy-out-a-car-lease\/","title":{"rendered":"How To Buy Out A Car Lease: All You Wanted To Know"},"content":{"rendered":"

Leasing a car may seem like a sound financial decision – until it’s time to return the car! If you’d rather own the car you’re driving, you can buy out a car lease or refinance it<\/a> easily. In this post, we’ve broken down everything you need to know about car lease buyouts.<\/em><\/p>\n

Not everyone likes to own a car – some of us would much rather lease one out every few years. However, there comes a point just before the return date when you start thinking “I enjoy driving this car. Should I buy out this lease instead of returning it?” Don’t worry – you’re not the first person to consider a lease buyout!<\/p>\n

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But before you do, there are some essential things to know about the process of buying out a lease. Here’s what you should keep in mind.<\/p>\n

What Is a Lease Buyout?<\/h2>\n

A lease buyout – also called a purchase option – is a clause written into your lease agreement that lets you buy the car at the end of the lease period<\/strong>. Simply put, a lease buyout allows you to become the owner of the car at the end of the lease period. The buyout amount is based on the residual value of the car (the anticipated value of the car at the end of the lease after accounting for wear and tear, depreciation, and mileage). <\/span><\/p>\n

Typically, the purchase option and buyout amount will be mentioned in the lease agreement when you first sign it.<\/span><\/p>\n

Also read:<\/strong> What is the difference between an auto loan and an auto lease?<\/a><\/p>\n

How Does a Lease Buyout Work?<\/h2>\n

All lease dealerships will mention a buyout price and the methodology for arriving at it when you are signing the agreement. When the return date of the lease is approaching, the lessor or dealership will get in touch with you to discuss buyout options. If you don’t want to exercise the option, you can always return the car to the dealership.<\/p>\n

But before you commit to buying the car, make sure that it makes financial sense. For example, imagine that the lease buyout price listed in your agreement is $15,000, and you have already exceeded the mileage limit. If you choose to return the car to the dealership, you might have to pay $1500 in excess mileage fees and $700 in wear-and-tear fees.<\/p>\n

But if the car is in a good condition and its current market value is indeed $15,000<\/strong>, it makes better sense to buy it and save yourself the $2200 in excess fees. Plus, you get the added advantage of owning a car you love!<\/p>\n

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On the other hand, let’s imagine another situation in which the buyout price is $15,000, you have no excess fees, but the current market value of the car is only $10,000<\/strong>. It doesn’t make sense to buy the car because even without the excess fees you will be overpaying by $5000<\/strong>! If you really like the car so much, you could even get a used car for $10,000 at a used car dealership – but a lease buyout will be a bad idea.<\/p>\n

The next question you may have is – “What if I don’t have the money to pay for a lease buyout?”<\/p>\n

How Can You Pay for a Lease Buyout?<\/h2>\n

Let’s face it – some of us may not have $15,000 in ready cash to cover the buyout price. However, there are many financing options you can choose to make things easier.<\/p>\n

Banks, credit unions, and other lenders offer lease buyout loans<\/strong> that offer you attractive deals. Alternately, you can also choose to refinance the car lease<\/strong><\/a> – which essentially means you take out a loan to buy the car and then pay affordable monthly installments on the car loan for a certain period.<\/p>\n

Whichever option you choose, always remember to shop around for offers from multiple lenders. That way, you needn’t settle for the first loan offer you get and can choose one with an affordable APR.<\/p>\n

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When Should You Buy Out a Car Lease?<\/h2>\n

There are broadly four considerations for when to buy out a car lease:<\/p>\n