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What Are Lease Buyout Options?
Lease buyout options are choices a driver has to purchase their leased vehicle either at the end of the lease term or before it ends.
These options include an end-of-lease buyout or an early buyout, depending on timing, contract terms, and the car’s current market value.
Each option offers different costs and benefits tailored to your specific situation.
End-of-Lease Buyout vs. Early Lease Buyout
When you’re thinking about buying out your leased vehicle, you typically have two options.
Each comes with its own timing, costs, and benefits, and understanding the differences can help you make the smartest financial move, especially if your car is worth more than expected.
End-of-Lease Buyout
This is the most common path and usually the most straightforward. It happens when your lease ends and you decide to purchase the car instead of returning it.
Key features:
- The buyout price is usually the residual value listed in your lease contract
- No remaining lease payments, just taxes, fees, and the buyout amount
Often makes sense if:
- You’ve stayed under mileage limits
- The vehicle is in good shape
- You want to avoid shopping for a new car
- The current used car market value is higher than the residual
Example: Your residual value is $17,500, and your car’s market value is $20,000. Buying it now could save you money or even earn you equity.
Early Lease Buyout
This option lets you end your lease before the scheduled date by purchasing the car outright. It’s helpful if your circumstances have changed, or you want to avoid lease penalties.
Total cost includes:
- Residual value
- Remaining monthly payments
- Early termination fees (if applicable)
- Sales tax and DMV fees
Often makes sense if:
- You’re moving, downsizing, or changing vehicles
- Your car’s current value is higher than the buyout quote
- You want to sell the car or avoid excess mileage/damage fees
Pro tip: Not every lease contract allows early buyouts. Contact your leasing company to confirm your options before making plans.
When Each Buyout Option Makes Sense
Choosing the right lease buyout option depends on timing, vehicle condition, and your financial goals. Whether you’re nearing the end of your lease or considering an early exit, knowing when each option makes sense can save you money and stress.
End of Lease Buyout Is Best When
- You love the car and want to avoid shopping for something new
- The car is worth more than the residual value, giving you built-in equity
- You’ve taken good care of the vehicle, stayed under mileage limits, and want to keep it long-term
- You want to skip dealership pressure and transition to ownership at your own pace
Example: Your lease ends in 30 days, and your residual value is $16,000. The same model sells for $19,000. Buying it out could save you $3,000.
Early Lease Buyout Is Best When
- Your plans have changed, you’re relocating, downsizing, or no longer need the car
- You’re approaching mileage or damage penalties, and want to avoid costly fees at return
- The car’s current market value is higher than your total buyout cost, giving you potential profit
- You want to resell the vehicle or refinance it into a loan with more favorable terms
Related Terms in Lease Buyout Options
- Previous term: Lease Buyout Loan
- Next term: Lease Disposition
- Also related: Lease Equity, Lease End