There are multiple reasons why you may be considering buying out your leased car before the lease is up. Maybe you want to get out of the lease, but don’t want to pay steep early-termination fees, so instead you’re planning on buying the car and then immediately selling it. Perhaps you’ve gone over your mileage allowance, so you want to buy out the lease to avoid paying per-mile overage fees. Or you could just really like the car and decide that you want to keep it.
With most lease contracts, you can negotiate an early buyout to purchase the car. Some lease contracts won’t allow you to buyout the lease if you are in the first few or last few months of the lease. If that’s the case, you can wait those few months either way and then buyout the lease when they’re up.
An early buyout on a lease is a bit more complex than buying it out at the end of the lease term. There is a predetermined purchase price for buying out your leased car at the end of the lease, but that doesn’t necessarily mean you can buy it for that price if you do an early buyout. The dealer may decide they want to renegotiate the amount. The dealer will most likely want you to pay the remainder of your lease’s value for your early buyout. You’ll essentially end up paying the same amount as if you waited until the end of the lease for the buyout, unless you or the dealer renegotiates the amount. You’ll just own the car earlier than you would if you waited until the end of the lease term to buy it out. The dealer probably won’t allow you to renegotiate the price since you’re the one requesting the early buyout. Unfortunately for you, they have most of the leverage in this situation.
Keep in mind that if you want to buy out your lease early because you went over your mileage allowance, you may not need to do an early buyout. You can wait until the end of the lease term to buy it out then and still avoid those overage charges.
If you choose to buy out your leased car, whether you do it early or at the end of the lease term, you will need cash to pay for the purchase or financing. It’s smart to look around at your financing options before you start working on the buyout. You may be able to obtain an auto loan through the dealer that issued you the lease, but you should check with some banks and credit unions, as well, just in case they have lower interest rates available.
Make sure to check whether you have equity in your leased car before deciding to buy it out. If the car has held its value, buying it could be a good decision, as it will be worth more than you pay for it. However, if the car has dropped quite a bit in value, you could be upside down on it, in which case you may want to reconsider a buyout.
When thinking about an early buyout, the best thing to do is look at your lease contract to get an idea of how much you will need to pay. Then you can check out your financing options and decide if a buyout is the right decision for you. Remember that you can buy it out at the end of the term, too, so there isn’t a rush.