What Is a Lease Buyout?

The end of your lease is coming up. What should you do? You have two options. You can return the vehicle and settle any remaining balance, or you can negotiate a car lease buyout. So what is a lease buyout? This is when a dealership allows you to buy the vehicle at or before the end of the lease contract for the price of its remaining value. Learn more about the different types of car lease buyout options as well as what will work best for you with our finance team at Big Star Buick GMC near Houston today.

Lease-End Buyout

A lease-end buyout is the most common type of lease buyout. This requires you to pay what the vehicle is expected to be worth at the end of your lease period. Normally, this price point is agreed upon before you sign the lease agreement so you’ll already know the remaining balance. This can be a good deal 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
• You can get a good interest rate to finance the buyout price

Another benefit to this is knowing the condition of the vehicle you’ve been leasing unlike when you purchase a different used model.

Early Lease Buyout

When you choose this option, you can purchase the vehicle before the end of the lease contract. Not all lease contracts will allow this, so you’ll want to double check beforehand if this option is available to you. Before you consider an early lease buyout, you’ll also want to make sure it’s worth the long term investment to buy instead of lease. Near the end of the lease, the price will be determined by:

• The lease-end residual value on your original contract
• The amount you still owe on the lease
• If the vehicle has depreciated quicker and is below market value, you might have to pay the difference

How Does a Lease Buyout Work? 

If your end goal is to own your vehicle and you think a car lease buyout is a good option for you, you’ll want to know how a lease buyout works. Here are the steps you’ll want to take:

• 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 Channelview 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 how 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 Big Star Buick GMC

Have more questions about how a lease buyout works or what the best option for you is? Contact our team at Big Star Buick GMC near Crosby and we can help you decide.