If you’re considering a lease buyout, you have some thinking and math to do before making your decision. Depending on your contract, you may be able to purchase your leased car for the buyout price — which should be noted in your contract — by the time or before the contract is up. Just like when buying a used car, you can usually finance the transaction or pay cash. But how do you know when a lease buyout makes sense?
Doing a bit of research and running the numbers can help you make a more informed decision. Most importantly, having the right bank financing contacts and connections can make the biggest difference for your pockets.
If a buyout option was part of your lease agreement, you typically have the option to buy your leased vehicle at the end of your lease term. The alternative is to return the car to the dealership. The car dealership option is almost always a financial mistake as you will pay a premium for this.
What To Consider Before Buying Out Your Lease
If you love your car, buying out the lease may seem attractive. That said, it may not make financial sense if the numbers don’t work out.
When deciding whether to buy out your lease, you should consider a number of factors to determine if it’s a sound financial move like:
– The value of the car in its current condition.
– The mechanical history of the car.
– The value of the car in it’s current condition.
– Whether you’ll have to pay excess mileage charges.
– Whether you’ll have to pay reconditioning or excess wear-and-tear charges.
– Whether you can line up financing and afford the monthly payments.
Depending on your situation, a lease buyout could make sense for you. Or you may want to turn it in and lease a new car. Running the numbers with an auto loan calculator could help you decide.
Don’t forget to compare buying a used car to your lease buyout price to see if you can get a better deal on a similar used vehicle elsewhere. While you won’t have the comfort of knowing the vehicle’s past like you would with a lease buyout, you may be able to save some money.
