What Is a Lease Buyout?

2022 Chevy Equinox RS Parked

When you purchase the vehicle you’ve been leasing, you’re executing a car lease buyout. Still, there’s more to this story. What is a lease buyout exactly—and more importantly, how does a lease buyout work? We’ve covered everything you need to know about early lease buyouts, lease-end buyouts, and the reasons why Carmel-area buyers may decide to buy out a lease.

Lease-End Buyouts vs. Early Lease Buyouts

Because there are two basic ways to buy out a lease, there’s no single lease buyout definition. The main distinction between the two types has to do with timing. An early lease buyout takes place when you buy the vehicle before your contract draws to a close. A lease-end buyout, in contrast, occurs on the day when you would otherwise have returned the vehicle to the dealership.

A vehicle’s buyout price is generally based on its expected depreciation over the leasing term—although you may be able to negotiate. In any case, you can usually find the lease-end buyout price listed in your contract. If you buy your lease out early, you’ll usually need to pay the buyout price plus whatever amount of your contract remains unpaid. There may also be early termination fees.

For this reason, early lease buyouts can be expensive. In fact, an early lease buyout is really only a good option if returning the vehicle would require you to pay significant fees for damage, wear and tear, or other issues.

A lease-end buyout is often a much happier affair. If you love the vehicle you’ve been leasing, and there isn’t another car that you’d like to drive more, you can choose to purchase it for a previously agreed-upon price at the end of your leasing term. This option is a little like buying a used vehicle that has only had a single owner—and since you’re the only person who has been behind the wheel, you’ll know exactly what you’re paying for.

Still not sure if you should buy the vehicle or start another lease? We can help with that too.

How Does a Lease Buyout Work?

The precise terms of a lease buyout may vary depending on where you leased the vehicle from, so we highly recommend that you start the lease buyout process by speaking with the company that has drawn up the contract. You can ask any questions on your mind and get a much better sense of what you’ll have to pay.

How does a lease buyout work? If you can’t afford to pay cash for the vehicle, you’ll want to get pre-approved for financing before you initiate the process. Moreover, since you may be able to negotiate your lease buyout price, it’s a good idea to find out how much similar cars are selling for in Indianapolis and Westfield.

When you’re ready, contact your local dealership’s lease return center and let them know that you’d like to proceed with a lease buyout. You’ll stop in, finalize the buyout price, and drive home in the vehicle that you love.

Learn More at Penske Chevrolet

Our Indianapolis dealership is easy to reach from anywhere near Noblesville, and we can help you initiate your lease buyout today. Take advantage of our other financing and insurance tips and get in touch with us at your convenience.

 

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