Buying your leased car involves contacting the leasing company to get the official payoff amount, comparing that price to the car's current market value, and securing financing if you aren't paying cash. The process is generally straightforward, but your decision should hinge on whether the residual value (the pre-determined purchase price in your lease contract) is a good deal compared to similar used cars. If the residual value is lower than the market price, you have positive equity and buying is a smart financial move.
The first step is to review your lease agreement for the purchase option clause, which details the residual value and any purchase option fee. Then, you must get an official payoff quote from the leasing company, as it will include the residual value plus any remaining payments and fees. It's critical to independently assess the car's worth using resources like Kelley Blue Book (KBB) or Edmunds. This comparison tells you if you're getting a fair price.
| Key Consideration | Data Point / Action |
|---|
| Typical Purchase Option Fee | Ranges from $300 to $500 |
| Average Used Car Loan APR (Good Credit) | Approximately 6.5% - 8.5% (as of 2024) |
| Recommended Vehicle History Report | Carfax or AutoCheck |
| Residual Value vs. Market Value | Buy if residual is at or below market value |
| Third-Party Pre-Purchase Inspection Cost | $100 - $200 |
| Timeframe to Purchase After Lease End | Usually 10-30 days, check your contract |
Before finalizing the purchase, get a pre-purchase inspection from an independent mechanic. You know the car's service history, but a professional can identify hidden wear and tear. Finally, secure financing through your bank, credit union, or the leasing company's finance arm. Once funded, the leasing company will handle the title transfer to you. Remember, you are responsible for sales tax and registration fees, which are typically processed through your local DMV.
