can you refi a leased car

[DiAustin]

No, you cannot directly refinance a leased car in the traditional sense. Refinancing involves replacing your current auto loan with a new one, but when you lease, you don't have a loan; you're paying for the vehicle's depreciation during the lease term. The leasing company holds the title. However, there is a common workaround known as a lease buyout refinance. This process involves buying the car from the leasing company at its predetermined residual value and simultaneously financing that purchase with a new auto loan from a bank or credit union.

Pursuing a lease buyout refinance only makes financial sense under specific conditions. The most critical factor is the car's current market value. If the residual value in your lease contract is significantly lower than what the car is worth on the open market, you have positive equity, making a buyout attractive. Conversely, if the residual value is higher than the market value, you'd be overpaying for the car.

Key Considerations Before a Lease Buyout Refinance:

Factor	Why It Matters	Actionable Check
Residual Value vs. Market Value	Determines if you have positive or negative equity.	Get the car's current value from Kelley Blue Book (KBB) or Edmunds.
New Loan Interest Rate	Must be lower than your lease's money factor (which is essentially the interest rate) to save money.	Convert your money factor to an APR by multiplying it by 2,400 for comparison.
Fees & Taxes	Buyouts often involve purchase-option fees, sales tax, and new loan origination fees.	Contact your leasing company for a full buyout quote including all fees.
Vehicle Condition	Excessive wear and tear or mileage overages can add unexpected costs at buyout.	Review your lease agreement's wear-and-tear guidelines.

The entire process requires coordination between you, your leasing company, and your chosen lender. You must get a payoff quote from the leasing company and secure financing approval from a lender who will send the funds directly to the leasing company. This option is best for those who have grown attached to their car and have confirmed the numbers work in their favor.

[MacMaximus]

Honestly, it's not a simple refi. You're not really refinancing the lease itself. What people mean is buying the car at the end of the lease with a new loan. It’s a two-step dance: first, you exercise the purchase option in your contract, then you get a loan from a bank or credit union to pay for it. Only do this if you love the car and the buyout price is a good deal compared to its current value. Check sites like CarMax for a quick cash offer to see if you’re getting a steal.

[CollinDella]

Think of it as a financial strategy, not a simple transaction. The goal is to capture equity. If your lease's residual value is $15,000 but similar models sell for $18,000, that's $3,000 in equity you can leverage. You secure a loan for the $15,000, effectively making the car yours for less than it's worth. However, you must factor in the new loan's interest rate, taxes, and fees. This move is a calculated risk, ideal for those with strong credit who can secure a low APR, turning a lease return into a smart purchase.

[WilliamAnn]

It's possible, but it’s a paperwork-heavy process that can surprise you with costs. You have to contact your leasing company for a buyout quote, which includes the residual value plus potential fees. Then you shop for a loan, but not all lenders will finance a lease buyout. Once approved, the lender pays the leasing company, and you start making payments on the new loan. You also have to pay sales tax on the purchase price. It's a commitment, so be sure you want to keep the car long-term before starting.

[LaEmmett]

From a pure numbers perspective, comparing a lease buyout to other options is key. Let's say your lease is ending. You have three choices: return the car, buy it outright, or do a buyout refinance. The best choice depends on the numbers.

Scenario Comparison: End-of-Lease Options

Option	When It's the Best Choice	Potential Downside
Return the Vehicle	You have no equity (market value < residual) or you want a new car.	Possible mileage or wear-and-tear fees.
Buyout with Cash	You have the funds and the residual value is a fantastic deal.	Ties up a significant amount of liquid cash.
Lease Buyout Refinance	You have positive equity and can secure a low-interest loan to own it.	Added loan fees and complexity; you own a used car out of warranty.

The smart move is to run the numbers for all three scenarios. Get the official buyout price, check the car's instant cash offer online, and get pre-approved for a loan. Only then can you make the most cost-effective decision.