It sounds simple enough, you lease a car, make your payments and at the end of the lease can buy out the contract for the agreed-upon price. Or, you can turn it in and buy a new one. Did you know, though, that you have other options?
What Is a Lease Buyout?
A buyout price is set by the leasing company (not the dealer) at the beginning of your contract. The buyout option can be an attractive opportunity for you to continue driving a car you’ve come to love. A lease contract always includes a buyout figure, or the amount you can expect to pay if you want to keep your vehicle. That figure is based on how much the leasing company expects your car to depreciate over the course of the lease, typically three years.
What You Pay for a Lease Buyout
If you’d like to keep your car, keeping its market value up is important. Of course, if the market value is high above the residual value, you’ll score a great deal by buying it. But there are other considerations and money-related factors to keep in mind:
- Depending on how high your end-of-lease fees are, a lease buyout could still be a good deal, even if the residual value is lower.
- After three years it can be worthwhile to invest in a vehicle that has been used by you alone. You know its condition and how well it’s been maintained.
- Have you racked up the miles? Leasing companies limit the number of miles a car can be driven (often 12,000 per year) and use that figure to determine the vehicle’s residual value. If you exceed the number, keeping the car instead of paying a penalty could be worth it.
The Bottom Line
The cost of buying a leased car can be well worth the investment, especially if you’re ready to move into car ownership. If you’re currently leasing a car you love, it’s in good shape and you can get a good buyout deal, this might be the best solution for you. At Valley Automall, we have a wide selection of new vehicles available to lease. Stop by today to take one for a test drive and talk to our financing department about all of your options. We look forward to meeting you and answering any questions you have about leasing a new car.