What Is a Lease Buyout?

2022 Jeep Grand Cherokee 4xe

 

When you’re nearing the end of your car lease, you are left with two options. You can return the vehicle to the dealership and pay off the remaining fees, or you can negotiate a car lease buyout. What is a lease buyout? The basic lease buyout definition is pretty straightforward: the dealership allows you to purchase a vehicle at or before the end of a lease contract for the price of its remaining value.

 

 

So, how does a lease buyout work? There are two different types of car lease buyout options to consider, and it’s important to know your options. Take a look at the different types to see which works best for you, then make your way to CH Urness Motor Company in The Dalles.

Lease-End Buyout Definition

This is the most common option for Hood River drivers. A car lease buyout at the end of the lease requires you to pay what the vehicle is expected to be worth by the end of the lease period. This price point is agreed upon before you sign the lease agreement. This is a great option if you’re happy with the vehicle, there have been little to no repairs since you’ve had the car, there’s no other vehicle at a similar price point that you’d like better, or if you can secure a good interest rate to finance the buyout price.

Another perk of buying your own leased vehicle is that you’ll already know its condition and history, unlike when purchasing a used car from another driver.

Early Lease Buyout Definition

You can purchase your vehicle before the end of the lease contract with this option. Not all lease contracts allow this, so you’ll have to check your lease agreement to see if this is an option for you. Before considering an early car lease buyout, you’ll also want to be sure it’s worth the long term investment to buy instead of lease. Near the end of the lease, the price is determined by:

  • The lease-end residual value on your original contract.
  • The amount you still owe on the lease.
  • Whether the vehicle has depreciated quicker and is below market value. (In this instance, you may have to pay the difference.)

Most times, buyers consider this buyout option when concerned about lease penalties for going over mileage limits, not maintaining scheduled services, or damages to the interior or exterior of the vehicle.

How Does a Lease Buyout Work? 

If your ultimate goal is to own your vehicle, it’s time to consider how it’ll affect your finances and learn the details of how a lease buyout works. Here’s how to get started:

  • Speak to your leasing institution. When you’re nearing the end of your lease, reach out to the institution you’re leasing with to inquire about your options. They can tell you more about how a car lease buyout works with them, including whether there are any fees associated with facilitating a buyout. 
  • If you’ll be financing the buyout, apply for pre-approval. Some Goldendale, WA drivers choose to pay for their car lease buyout in full if they’ve been saving for it, but there are also car lease buyout loans available. If you plan to finance your lease buyout, now is a good time to apply for pre-approval with a few lenders to see if you qualify. Often, you can secure financing through the same dealership you had your lease with, but you can explore your own options, too.
  • Negotiate and finalize the buyout. There may be room to negotiate your car lease buyout down to a lower price. Once you’ve settled on a price you feel comfortable with and secured your financing, all that’s left to do is finalize the buyout! 

Learn More at CH Urness Motor Company

A lease buyout definition is when a dealership allows you to purchase a vehicle at or before the end of a lease contract for the price of its remaining value. Now, you can simply choose the option that works best for your Portland life. Between the two car lease buyout options, assess your car loan, the wear and tear, and purchase price to see if this investment is worth it for you. If you have any questions, feel free to contact us!

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