Can You Finance a Lease Buyout? Key Takeaways
- Yes, you can finance a lease buyout just like financing a used car, with loan terms typically ranging from 24 to 60 months
- Buyout loan rates in 2025 average between 5.5% and 10.5%, depending on your credit score, vehicle value, and lender terms
- Common loan requirements include a credit score of 620 or higher, steady income, and a car in good condition with a competitive buyout price
- Buying out your lease helps you avoid return fees, mileage penalties, and the hassle of finding a new car in a high-priced market
- If your buyout price is lower than your vehicle’s market value, you may instantly gain equity, and make a smarter financial move
With used car prices still high and lease return fees averaging $350 to $500, more drivers are choosing to finance their lease buyout and keep the car they already know and trust.
But here’s the big question: Can you finance your buyout, and should you?
The short answer is yes. And depending on your credit and your car’s value, it could be one of the most cost-effective moves you make this year.
In this guide, you’ll learn:
- How lease buyout financing works
- What lenders look for when you apply
- Pros and cons of financing vs paying cash
- How to compare loan terms and avoid dealership markups
- Whether a buyout is worth it based on your numbers
Want to keep your car?
How Lease Buyout Financing Works
A lease buyout loan lets you purchase your leased vehicle by spreading the cost over monthly payments, just like financing a used car.
Let’s walk through the steps:
- You request a payoff quote from your leasing company. This includes the residual value, plus any taxes, fees, or remaining lease payments (for early buyouts)
- Once you’ve settled on a lender, whether it’s your credit union or an online provider, they’ll handle the payoff directly with the leasing company after your loan is approved
- You take ownership of the car and begin making monthly payments to your lender instead of returning the vehicle to the dealer
Pro tip: The best time to explore financing is 30–60 days before your lease ends. That gives you time to compare lenders, apply for pre-approval, and avoid last-minute markups from the dealership.
Who Offers Financing for Lease Buyouts
You have more financing options than you might think, and not all of them involve the dealership.
These are your main offers for lease buyout loans and what to expect from each:
1. Credit Unions
If you’re looking for lower interest rates and flexible terms, credit unions are a strong option.
- Known for offering some of the lowest interest rates
- Often more flexible with credit requirements
- May require membership, but worth the savings
2. Banks
Traditional banks are a good choice if you prefer to work with a familiar institution.
- Offer competitive rates and longer loan terms
- Good fit if you already have an account with them
- May be stricter with credit score thresholds
3. Online Lenders
Want speed and convenience? Online lenders offer a fast, fully digital process.
- Fast pre-approval and rate comparisons
- Convenient, 100% digital process
- Helpful for shoppers who want to avoid in-person visits
4. Dealerships
Dealers may offer in-house financing, but it’s important to watch out for markups.
- Some dealers offer financing, but often at higher rates
- May try to upsell extended warranties or add fees
- Good to compare, but don’t rely solely on the dealer’s offer
5. Lease End Department
Looking for a straightforward, no-pressure experience? Lease End Department has you covered.
- Offers fast, no-markup buyout loans tailored to your credit
- 100% online with no dealership pressure
- Handles everything from payoff to plate delivery
Requirements To Qualify for a Lease Buyout Loan
Getting approved for a lease buyout loan isn’t too different from financing a used car, but there are a few key things lenders will look at before saying yes.
Here’s what you typically need to qualify:
- A decent credit score: Most lenders prefer a score of 620 or higher, though some credit unions or subprime lenders may consider lower scores at higher rates
- Proof of income: Lenders will want to see that you can make the monthly payments, usually through recent pay stubs, bank statements, or last year’s tax return
- Reasonable debt-to-income ratio: Lenders want to see that your income comfortably covers your existing debt, ideally keeping your DTI ratio below 40%–45%
- Your lease payoff amount: This includes your residual value plus any applicable taxes and fees. The lender will compare this to the car’s current market value
- Vehicle condition and mileage: While not always a dealbreaker, excessive wear or very high mileage may affect loan approval or interest rate
Pros and Cons of Financing a Buyout
Financing a lease buyout can be a smart way to keep the car you already know, but it’s not the right fit for everyone. Weighing the benefits and drawbacks can help you decide if this move makes financial sense.
Pros of Financing a Lease Buyout
Here’s what makes financing a buyout appealing for many drivers:
- Keep a car you know: No surprises. You already know the vehicle’s condition, history, and how it drives
- Avoid return fees: Skip the $300–$500 disposition fee, plus any wear-and-tear or mileage penalties
- Build ownership: Unlike leasing, every payment you make brings you closer to owning the car outright
- Spread out the cost: No need for a large lump sum. Financing breaks your buyout into manageable monthly payments
- Gain equity: If your car is worth more than your buyout price, you could build equity right away
Cons of Financing a Lease Buyout
Still, there are a few downsides to consider before moving forward:
- Higher total cost: You’ll pay interest, which adds to the overall expense compared to paying cash
- Potential overpay: If the residual value is higher than the car’s market value, buying it might not be a great deal
- Loan approval requirements: If your credit score or income doesn’t meet lender standards, you may face high rates or a loan denial
- Ongoing payments: Financing a buyout means you’re still making monthly payments, even after your lease ends
How Lease End Department Helps You Finance the Smart Way
Thinking about buying or getting out of your lease? You don’t have to navigate the numbers or paperwork alone.
At Lease End Department, we make lease buyouts simple, especially if you want to finance your next step. Whether you’re trying to avoid dealership markups, need help comparing loan options, or just want to keep the car you already love, we’re here to make it happen.
What does working with Lease End Department really look like?
- Personalized financing support: We’ll walk you through your payoff quote and find a buyout loan that fits your credit and budget
- No dealership visits: Everything, from loan documents to plate delivery, happens online, on your schedule
- No hidden fees, no pressure: Just real numbers, clear options, and a team that puts your needs first
Why Lease End Department? Because buying out your lease should be smart, stress-free, and entirely in your control.
CTA: Compare your lease and buyout options today. Contact us.
Can You Finance a Lease Buyout: FAQs
Can you finance a lease buyout with bad credit?
Yes, but your options may be more limited. Some credit unions and online lenders work with credit scores below 620, though you’ll likely face higher interest rates. Applying with a co-signer or improving your credit before applying can help secure better terms.
Is it better to buy my leased car or return it?
It depends on the car’s current value and your personal situation. If your buyout price is lower than the car’s market value, or you’ve kept it in great shape, buying can be a smart move. If it’s worth less or doesn’t meet your needs anymore, returning it might make more sense.
How long can you finance a lease buyout?
Most lease buyout loans range from 24 to 60 months, depending on the lender and your credit profile. Shorter terms typically mean higher monthly payments but less interest paid over time.
What’s the typical interest rate on a lease buyout loan?
In 2025, rates generally fall between 5.5% and 10.5%, depending on your credit score, income, and the lender. Shopping around or getting pre-approved can help you secure the most favorable rate.
Do I need to go through the dealership to finance a buyout?
No. In fact, many drivers save money by financing through a credit union, bank, or Lease End Department. Dealerships may offer convenience but often mark up rates or add extra fees.