Spelling: ear·ly lease buy·out
What Is an Early Lease Buyout?
An early lease buyout is when you purchase your leased vehicle before the end of your lease term. Instead of waiting for the full lease duration, typically 24 to 36 months, you buy the car outright, ending the lease agreement early.
This option is available with most leases, but it comes with specific terms, fees, and financial implications. For some drivers, it’s a smart way to keep a vehicle they like. For others, it’s a strategy to avoid mileage penalties, wear-and-tear charges, or early return fees.
Early Lease Buyout Meaning in Car Leasing
In the context of car leasing, an early lease buyout allows the lessee to become the legal owner of the vehicle before the agreed lease term ends. To do this, you’ll need to pay the early payoff amount, which typically includes:
- The remaining monthly payments
- The vehicle’s residual value
- Any applicable buyout fees or early termination charges
- Taxes, title, and registration costs
The exact formula depends on your leasing company. Some lenders offer online tools or customer service lines to request a buyout quote.
When an Early Lease Buyout Makes Sense
An early lease buyout isn’t always the cheapest route, but in the right situation, it can help you save money or avoid larger penalties.
Scenarios where a buyout may be smart:
- You’re over your mileage limit: If you’ve exceeded your contracted mileage, buying out early could help you avoid per-mile penalties (usually $0.15–$0.30)
- You’ve damaged the vehicle: If your car has cosmetic or mechanical damage, buying it could help you avoid expensive end-of-lease wear-and-tear charges
- You love the car: If the vehicle fits your lifestyle, and you’ve maintained it well, buying it early could be more affordable than leasing or buying something else
- Its market value exceeds the payoff: If the used car market is hot and your vehicle is worth more than the early payoff amount, you could have positive equity
Example: If your early payoff quote is $19,000 and similar vehicles are selling for $22,000, you might make money by purchasing and reselling.
Things To Consider Before Buying Out Early
Before you initiate an early lease buyout, ask yourself:
- What’s the total cost, including fees and taxes?
- Do you need financing to cover the buyout?
- Is the car’s market value higher than the buyout price?
- Would waiting until lease-end cost less overall?
Pro tip: Use tools like Kelley Blue Book, Edmunds, or Carvana to check your vehicle’s current value. And always compare that against your official buyout quote.
How Lease End Department Helps
At Lease End Department, we help drivers navigate early lease buyouts by:
- Requesting your official payoff quote
- Offering pre-approval for buyout loans
- Handling title transfer and DMV paperwork
- Shipping your new license plates directly to your door
You get to skip the dealership, and the pressure that usually comes with it.
Related Terms in Early Lease Buyout
- Previous term: Depreciation
- Next term: Excess Mileage Fee
- Also related: Residual Value, Buyout Quote, Lease Transfer, Wear-and-Tear Charges