Yes, you can typically buy the car when your lease is up. This process is called a lease buyout. Your lease agreement includes a residual value, which is the car's predicted worth at the end of the lease term and is your predetermined purchase price. The first step is to contact your leasing company well before your lease expires to express your intent to buy and request a buyout quote.
Before deciding, it's crucial to compare the residual value to the car's current market value. If the residual value is lower than what similar models are selling for, buying your leased car is a financially smart move. You've also driven the car since new, so you know its full maintenance and accident history.
The buyout process involves securing financing, either through the leasing company, your bank, or a credit union. You'll then pay the residual value plus any applicable sales tax, title, and registration fees. Be aware that some leasing companies may charge a purchase option fee, typically a few hundred dollars.
| Consideration | Key Data Points & Factors |
|---|
| Residual Value vs. Market Value | Compare your buyout price to valuations from Kelley Blue Book (KBB) or Edmunds. A difference of $1,500-$3,000 in your favor makes a buyout attractive. |
| Vehicle Condition | You avoid excess wear-and-tear charges by purchasing. Minor dings or slightly worn tires become irrelevant. |
| Mileage | High mileage on a leased car can incur penalties, but if you buy it, those overage fees are waived. |
| Purchase Option Fee | This fee can range from $0 to $495, depending on the leasing company. Always ask for a full breakdown of costs. |
| Third-Party Buyout Restrictions | Some lenders (like Ally, Chrysler Capital) prohibit third-party buyouts, meaning you must finance directly with them or pay cash. |
Ultimately, a lease buyout is an excellent option if you love the car and the numbers make sense, providing a path to ownership without the hassle of shopping for a new vehicle.
