Buying Out Your Car Lease
As the end of you lease approaches, you might want to buy the car you've leased. Luckily, selling you the car you've leased is also in the best interest of the leasing company. If you don't purchase the car, the leasing company usually takes the car to auction. The leasing company will have to pay auction fees and will most likely get a low price for the car. This situation puts you in a good position to negotiate your lease buyout.
Car Lease Buyouts, Market Values and Wholesale Values
If you decide you want to buyout your car lease, your first step is to determine the car's market value. Knowing the actual value of your car can help you decide if buying out your lease is a good deal. To figure out your car's market value check out myAutoloan.com's leasing research tools or other Internet sites. You can also call another dealer find out how much you would pay if you bought the same car from them.
After you determine your car's market value, find out your car's wholesale value by discovering what your car could be sold for at auction. Hopefully your car's residual value will be lower than its retail value.
How to Buyout Your Car Lease For a Good Price
The first thing to check is the car's residual value. It may be more than you're interested in paying. You should always negotiate for the best buyout price no matter what is listed on your original leasing contract.
Begin your negotiation armed with knowledge by researching information about your car including expected depreciation, residual value, wholesale value and the average retail price with leasing tools from a site like myAutoloan.com. Your goal is to offer the dealer a buyout price closer to the wholesale value of the car than the average retail price. Check to see if your leasing company has a dealer dedicated to lease returns. If so, deal with that person instead of the dealer who sold you the lease.
Once you've identified who to deal with and have decided what you're willing to pay for the buyout, call and make an offer. It might be accepted on the spot or it might be a starting place for negotiation. Keep in mind that you will most likely be charged a purchase option fee ranging from $300 to $900 dollars.
When is a Car Lease Buyout a Smart Option?
If your lease car has excessive damage or if you have exceeded your mileage limits you might consider a buyout to avoid paying large penalties at lease end. Buyout is also a smart option if you simply like your car, have kept it in good repair and want to keep driving it. Sometimes the residual value of your car will be less than its retail value. If this happens you could buy your car from the dealer and the resell it for a profit, making your buyout a very smart move.
Are There Different Kinds of Buyout Options?
It depends on your lease. There are two kinds of lease buyouts: a normal buyout at the end of your lease and an early buyout. A normal car lease buyout option is usually outlined in the original lease contract. Review your contract for your buyout terms and call to check on a buyout price as the end of your lease approaches. Depending on how your lease contract is written you may have an option for an early buyout. If you choose to attempt an early buyout, make sure your leasing company is not considering it an early termination, which can be very costly.