How to Calculate a Lease Buyout

Man Signing Car Lease

If you’ve fallen in love with your leased vehicle and would like to buy it, our finance experts are here for you every step of the way. Chandler area drivers can learn more about how to calculate a car lease buyout with our guide below.

Is a Lease Buyout Right for You?

Whether you prefer to do your own research, or have enlisted a reputable dealership near Phoenix for help, you can take the following steps to determine the current value of your vehicle against the remaining payments on your lease:

  1. Locate the Buyout or Payoff Amount listed in your monthly leasing statement. This amount includes the residual value of your vehicle at the start of your lease, the total remaining payments, and a car purchase fee (depending on the leasing company). If you don’t have a Buyout or Payoff Amount listed anywhere, continue to the next step. If your statement includes a Buyout or Payoff Amount, skip to step 3.
  2. Determine the residual value of your vehicle. This information will be found in your lease contract. The residual value of your vehicle is its estimated future value at the time your lease contract ends.
  3. Determine the actual value of your vehicle. Your car may have decreased in value from when the lease began due to unavoidable depreciation or any wear and tear from normal driving. Or, if you’ve driven your vehicle less than 12,000 miles per year, it may not have decreased in value as much as you’d think. Using a service like the Kelley Blue Book appraisal tool or our Value Your Trade tool will help you accurately assess the current market value of your car.
  4. Compare the residual value to the actual value of your vehicle. If the actual value ends up being higher than the residual value from your lease contract, then purchasing your vehicle might be a good deal. If not, you may be able to negotiate with the dealer on a more favorable purchase price.
  5. Be sure to account for any license and registration fees. If you buy the car that you’ve been leasing, that means that certain costs of ownership are transferred from the leasing company to you. This includes title transfer costs, licensing, and registration fees. You can learn more about these fees by checking with your leasing company.
  6. Account for sales tax. When you buy out your lease, a local sales tax rate will apply. You may be able to find this information up front on your Gilbert area DMV site or your state’s government website.

Trying to find out how much you’ll pay each month if you decide to buy out your lease? Once you’ve determined if it’s a good idea to buy, you can use our simple car payment calculator to work out the rest of the details. You can even apply for financing online. If you still have questions about how to calculate your lease buyout, how to determine the current value of your vehicle, or the terms of your current lease, contact us and we will be more than happy to discuss these finer details with you.

Early Lease Buyouts vs. Lease-End Buyouts

Another important thing to consider is whether you want to end your lease early or wait until the contract is up to buy your vehicle. Here are some differences between early lease buyouts and lease-end buyouts:

  • Lease-End Buyouts: Waiting until you are at or near the end of your lease can put you in a better position to negotiate on price with your dealership. If the dealer thinks you are planning on giving your vehicle back to them, they may offer you a better deal to keep the vehicle.
  • Early Lease Buyout: Early buyouts won’t give you much wiggle room when negotiating on the purchase price of your vehicle. Whether you’re considering an early buy-out due to too much wear and tear or the danger of exceeding mileage limits, the dealer knows they have more leverage in the situation if you are trying to prematurely end your lease.

New Vehicle Leasing from Land Rover Chandler

Now that you’ve learned about how to calculate your car lease buyout, let our automotive experts help you decide what course of action is right for you. If you’re looking to trade in your current lease for a new luxury vehicle instead, browse our new vehicle inventory online today and contact us to arrange a Tempe area test drive. Already found what you want? Shop online from the comfort of your own home. We look forward to serving you.

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