Understanding Lease Buyouts

Based on the original terms of your lease agreement, buying out your leased car may a great option. There are certain nuances to each lease deal, and there are certain things you need to understand before agreeing to a lease buyout to ensure that 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 see if a buyout is your best move. Once you determine if that is a good choice, you need to investigate if the price you are going 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 cars value provided to you years before the actual date when the information was required and needed to be 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. You can always try to negotiate the buyout rate of your vehicle, however if the company will not negotiate, you need to decide if you are willing to pay the price they are demanding.

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 on your car because you are over on mileage, think twice. Not only will the amount you owe on your list most likely be significantly higher than you originally calculated, but it will probably be more cost effective topay mileage fees at lease-end than to buy out a lease early. Also make sure that you have a good auto loan rate to save more on your buyout. Buying a leased car also has an advantage in that you know how your car was treated prior to purchasing it at the end of your lease term.