You can typically purchase the car for its predetermined residual value, which is set at the beginning of your lease. This price is non-negotiable with the leasing company. However, the final amount you pay is the residual value plus potential fees and, in some cases, state sales tax. The total cost can be surprisingly affordable if the car's current market value is higher than the residual value, making it a smart financial decision.
The most critical number is the residual value. You can find this amount clearly listed in your original lease contract. It's the leasing company's estimate of the car's worth at the end of the lease term. To get the total buyout price, you must add any purchase option fee (often $300-$500) and possibly state sales tax on the residual value.
Whether this is a good deal depends entirely on the car's current real-world market value. If the residual value is $15,000 but similar cars are selling for $18,000, you're getting instant equity. Conversely, if the market value is lower, you'd be overpaying.
Here’s a comparison of potential costs for different vehicle types, assuming a $495 purchase option fee:
| Vehicle Type | Example Residual Value | Estimated Total Buyout Cost (incl. fee) | Current Avg. Market Value | Financial Advice |
|---|
| Compact SUV (3-yr lease) | $18,000 | ~$18,495 + tax | $21,500 | Strong Buy: High equity |
| Full-Size Truck (3-yr lease) | $32,000 | ~$32,495 + tax | $35,000 | Good Deal: Positive equity |
| Midsize Sedan (3-yr lease) | $15,500 | ~$15,995 + tax | $14,800 | Consider Skipping: Negative equity |
| Luxury Sedan (3-yr lease) | $28,000 | ~$28,495 + tax | $26,000 | Weigh Options: Likely better to return |
Before deciding, you must get a payoff quote directly from your leasing company. This official document outlines the exact amount due. Then, research the car's value on sites like Kelley Blue Book (KBB) or Edmunds. If you need financing, arrange it beforehand through your bank or credit union, as dealer financing might not be the most competitive rate for a lease buyout.
