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Lease End Financing: What It Means & How it Works

Lease End Financing: What It Means & How it Works

Spelling: lease end financ·ing 

What Is Lease End Financing? 

Lease end financing is a loan you use to purchase your leased car at the end of the lease term. Instead of paying the full buyout amount upfront in cash, you finance it, just as you would when buying a car from a dealership. 

This option is ideal for drivers who want to keep the vehicle they’ve been leasing but don’t want to make a large one-time payment. 

How Lease-End Financing Works 

Here’s how the process typically goes: 

  1. You request a buyout quote from your leasing company 
  1. You apply for financing based on that payoff amount 
  1. Once approved, the lender pays the leasing company 
  1. You take full ownership of the car and begin making monthly loan payments 

Unlike the lease, where you’re paying for depreciation, this loan is structured to pay off the full purchase price over time, usually 24 to 72 months. 

When To Consider Lease-End Financing 

Lease-end financing can be a smart move if: 

  • You’ve taken great care of your leased car and want to keep it 
  • The buyout price is lower than the car’s current market value 
  • You want to avoid new vehicle pricing or dealership markups 
  • You’re over your mileage limit or facing wear-and-tear fees 
  • You prefer financing over a large cash outlay 

What Lease-End Financing Covers 

Your financing amount typically includes: 

  • The residual value listed in your lease contract 
  • Applicable taxes and fees 
  • In some cases, minor charges like a purchase option fee or DMV/title costs 

Pro tip: Ask your lender or provider (like the Lease End Department) whether these costs can be rolled into the loan or must be paid upfront. 

Example Scenario 

Let’s say your lease is ending, and your buyout price is $17,500. You don’t have the full amount in cash, so you apply for a 48-month lease-end financing loan with a 5.9% APR. 

Your monthly payment comes out to around $410. You now own the car and avoid the $650 wear-and-tear fees you’d face if returning it. 

Advantages of Lease-End Financing 

  • Lower upfront cost compared to paying cash 
  • No dealership visits if you use an online service 
  • Pre-approval flexibility lets you shop for rates or compare lenders 
  • Ownership equity, you’re building value, not just renting 
  • Keeps a car you know and trust with no surprises 

How To Apply for Lease-End Financing 

You can: 

  • Apply through your bank or credit union 
  • Use a specialized service like Lease End Department for a guided process 
  • Get pre-approved online so you know your rate before the lease ends 

Pro tip: Getting pre-approved 30–60 days before your lease ends helps avoid delays and gives you room to compare offers. 

Related Terms in Lease End Financing 

  • Previous term: Lease End 
  • Next term: Lessee 
  • Also related: Lease Buyout, Residual Value, Buyout Loan, DMV Title Transfer 

Need lease-end financing? Lease End Department can help you get pre-approved, compare offers, and complete your title and registration, without ever setting foot in a dealership. 

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