Lease Buyout: What Is It and Should You Do It?

Generally, when you lease a car, you agree on the period of time the contract will last for, and at the end of that time, you return the vehicle. You would then perhaps take out another lease on a new car or walk away. However, if you really like the car, you might be reluctant to hand the keys back. That’s when you could consider a lease buyout.

What Is a Lease Buyout?

What happens when you approach the end of your lease contract and decide you want to keep the car? You can do so with a lease buyout. The leasing company will have set the buyout price at the start of your contract. Just like buying any other car, you can pay cash or take out a loan for the purchase. A lease buyout comes with pros and cons that you would need to take into consideration.

Reasons to Consider a Lease Buyout

You Would Incur High Fees 

If you’ve gone way over the agreed-upon mileage limit, you’ll face a penalty for every mile over the limit. You might be surprised by how much a few cents per mile can add up. Similarly, fees for excess wear and tear can mount up if there’s damage to the bodywork or upholstery.

You Treated the Car Well

Alternatively, if the car has been well looked after and you’re below your mileage limit, you might want to keep it and not have the leasing company benefit from the higher price it would fetch. You might struggle to find another used car in such good condition within your budget.

You Love the Car and Can Afford It

You can become attached to a car and the memories of trips and family vacations you’ve taken. You know it’s reliable and safe, and you’re comfortable with the familiarity of your daily ride. With all that, if it still fits in your budget, a buyout could be the right thing for you.

When Not to Buy Your Leased Car

It’s Not Worth the Buyout Value

The buyout value is a prediction of what the car will be worth at the end of your lease contract. It could turn out that it’s worth less than the agreed-upon value, but you’d still have to pay that price to buy the vehicle, which in that case would make it a bad deal.

Interest Payments are Higher

You might have received a good deal on your lease payments with a favorable rate. If you need to take out a loan to buy the car, the interest rate may be higher, especially since a used car is considered a higher risk by lenders.

Read the Small Print

Whatever your reasons for considering a lease buyout, check all the terms of your lease contract to ensure it’s the best deal for you. If there are additional charges that make it less good value, you might want to walk away and look for another car.

To discuss all of your car leasing needs, contact Autoflex Leasing. We can help you find the car you’ve been looking for.