Are you leasing a car but wish you could keep it for yourself? Based on the original terms of your lease agreement, buying out your leased car instead of returning it to the dealer may a great option. There are nuances to each individual lease deal, including specific things you need to understand before agreeing to a lease buyout to ensure you get the most out of your arrangement.
Assessing Your Lease Prior to a Buyout
Well before the end of your lease agreement occurs, you should compare all the lease-end options you originally contracted for to determine whether a buyout is your best move. If you decide it’s a good choice, investigate if the price you are asked to pay for your vehicle is a fair one.
Typically, the end-of-lease buyout is based on the residual value that was determined by the lease provider at the beginning of your arrangement. The residual value was an estimate of your car’s value, provided to you years before the actual date of sale when the information needed to price the car could be completely accurate. Spend the time to research the Blue Book value of your vehicle and check car dealers and classified ads to see how much people are selling similar vehicles for.
If you find you are expected to pay much more than the car is actually worth, you can always try to negotiate the buyout rate of your vehicle. However, if the company will not negotiate, you will either have to pay the price they are demanding or simply find a new car.
Never Negotiate Mileage Fees Prior to a Buyout
If you fall in love with your car early on in the lease or think you should propose an early buyout because you are over on mileage limits, think twice. Not only will the amount you owe on your list most likely be significantly higher than you originally calculated, but it is usually much more cost effective to pay mileage fees at lease-end than to buy out early.
Lease Buyout Loans
Just like when buying a brand new car, purchasing your vehicle though a buyout may require more cash than you have on hand. Lease buyout loans exist especially for this situation. You can borrow the money you need to purchase your leased car and pay it back over time. As always, make sure you obtain a low auto loan rate, which will help you to save even more on your buyout.