How Does a Car Lease Buyout Work?

You know the difference between buying a car and leasing a car, but how does a lease buyout work? In short, the lease buyout definition is when the dealership buys you out of your contract, so you can get another deal that you’d prefer. However, there are two different types of buyouts to keep in mind: early lease buyout and lease-end buyout. Here, Wolfchase Nissan dives deeper into what a car lease buyout is and how the process works.

Option One: Lease-End Buyout

A car lease buyout occurs when you purchase your vehicle at the end of your leasing term. Let’s say you lease a used car and sign a two-year contract. Over those two years of Arlington drives and Memphis road trips, you decide that this vehicle is worth a long-term investment. Once your contract has expired, you can opt for a lease-end buyout. This is a good idea if the following apply:

• You have a low interest rate to finance your vehicle.
• Your vehicle has had minimal repairs during the term.
• There is no other vehicle you’d rather drive, and you don’t want to upgrade.

Option Two: Early Lease Buyout

In addition to the car lease buyout, you can also opt for the early lease buyout option, but it is quite a bit different. An early lease buyout occurs when you upgrade your vehicle before your contract expires. This is a more complicated option, but it can be convenient if you are in danger of breaking other lease agreements: extra mileage, vehicle damage, and more. This allows you to get out of your contract before you run up expensive penalties. However, keep in mind factors like:

• The amount you still owe on your original lease.
• The lease-end residual vehicle value.
• The value depreciation for your vehicle from damages and repairs.

How Does a Lease Buyout Work?

If you’d like to own the vehicle you’re currently leasing, a car lease buyout is the best option for you. How does a lease buyout work, exactly? Here are the beginning steps:

• Reach out to your leasing institution and ask about your lease-end options. They’ll go over how they handle the lease buyout process and if there are any fees associated with a buyout.
• If you plan on financing the buyout, apply for pre-approval. While some drivers make it a point to save and pay their car lease buyout in full, there are some car lease buyout loans available. Think financing is best for you? Apply for pre-approval with a couple of lenders to see how you qualify. You may even be able to secure financing through the dealership you leased the vehicle from.
• Negotiate the terms and finalize the buyout. You might be able to negotiate your car lease buyout down to a lower price. Once you’ve reached a number that you’re comfortable with and secure financing, all you have left to do is finalize the buyout!

Find Your Car Financing Solutions at Wolfchase Nissan

If you still have questions about what a lease buyout is and how it works, contact Wolfchase Nissan for personalized financial advice from seasoned experts on new vehicles, how to trade in a financed car, and more. We’re conveniently located in Bartlett, so don’t hesitate to reach out to us!