What Is a Lease Buyout?

If you love the new Mazda you’ve been leasing for the past couple of years in Hartford, you have the option for a car lease buyout. You have other options, too, like returning the leased vehicle to our dealership and paying any remaining fees. When you opt for a car lease buyout, you can negotiate for auto loan financing to purchase the vehicle and make it your own. Read our guide about how a lease buyout works from Liberty Mazda near Manchester.

What Is a Lease Buyout Option? 

The definition of a lease buyout is when a dealership allows you to purchase a vehicle at or before the end of a lease contract. The buyout is based on the price of its remaining value. For example, you lease a new vehicle worth $30,000. The value at the time of the buyout is $26,500. The amount of the auto loan would be $26,500, minus any down payment. 

There are two different types of car lease buyout options to choose from. It’s important to know the differences between the two to see which one is better for your situation in Hamden.  

Lease-End Buyout

A lease buyout is what’s most common at the end of the lease. The lease-end buyout requires you to pay what the vehicle is expected to be worth by the end of the lease period. Normally, this price point is agreed upon before you sign the lease agreement. 

A lease buyout is what you may prefer at the end of the lease if you meet these criteria:

• You’re happy with the vehicle for your drives in Milford and beyond.
• There have been little to no repairs since you’ve had the car.
• There’s no other vehicle, at a similar price point, that you’d like better.
• You can get a good interest rate to finance the buyout price.

Another perk is knowing the condition and history of the vehicle you’ve been leasing. This is not the case if you buy a used vehicle that has a different owner before heading to the dealership.

Early Car Lease Buyout

A definition of a lease buyout with this option is that you purchase the vehicle before the end of your lease contract. Not all lease contracts allow this. Check beforehand if this is a choice for you.  Also, think about whether the long-term investment is worth it versus leasing again. Near the end of the lease, the price you’ll pay with an auto loan is determined by: 

• The lease-end residual value on your original contract
• The amount you still owe on the lease
• If the vehicle has depreciated quicker and is below market value, you might have to pay the difference

Think about this type of car lease buyout when you’re concerned about lease penalties like going over mileage, not maintaining scheduled services, or damages to the interior or exterior of the vehicle.

How Does a Lease Buyout Work? 

You’ll need to know the steps of how a lease buyout works if you believe it’s a good option for you. 

• First, go over your finances to see if you can handle taking on longer-term payments. The definition of a lease buyout means you’ll shift to a different payment that you make every month. 

• Speak to your leasing institution. When you’re nearing the end of your lease, reach out to the institution you’re leasing with to inquire about your options. They can tell you more about how a lease buyout works with them, including whether there are any fees associated with facilitating a buyout. 

• If you’ll be financing the buyout, apply for pre-approval. You can buy your vehicle outright with cash or apply for financing. Go with the auto financing terms that most meet your financial situation. Often, you can secure financing through the same dealership you had your lease with. However, feel free to get multiple offers, including from your own bank or credit union.
• Negotiate and finalize the car lease buyout. There may be room to negotiate your car lease buyout down to a lower price. Once you’ve settled on a price you feel comfortable with and secured your financing, sign the papers to become an automobile owner!

Learn More How a Lease Buyout Works at Liberty Mazda

Want more information about how a lease buyout works? Interested in leasing one of our new vehicles? Contact us or call 860-249-8990 to speak to our team or to schedule a test drive. We’re happy to help in any way we can!