What Is a Lease Buyout?

Signing Finance Documents for Car
 

When your car lease is coming to an end in Martinsville, you can either return the vehicle to the dealership and settle any remaining fees or you can negotiate a car lease buyout. What is a lease buyout? The basic lease buyout definition is when a dealership allows you to purchase a car at or before the end of a lease contract for the price of its remaining value. Learn about the two different types of car lease buyout options below before finalizing your lease at Gunter Nissan of Martinsville!

 

 

Lease-End Buyout

This is the most common option among Danville drivers. 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. This choice is a good deal if:

  • You’re happy with the vehicle
  • 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 advantage is knowing the condition and history of the vehicle you’ve been leasing, unlike when purchasing a different used car, where you’d have to know what to look for. Think of it as a long-term test drive, so you’d definitely know if you love the car by the end of your lease!

Early Lease Buyout

What about if you know before the end of your lease that this is a car that you can see yourself owning? Then, you can consider buying your car before the end of the lease contract. Not all lease contracts allow this, so you’ll want to make sure that this is an option for you in Roanoke. As you’re considering an early lease buyout, you’ll also want to be sure it’s worth the long-term investment to buy instead of lease. Towards the end of the lease, the price 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

Most times, buyers consider this buyout if they’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?

If you’ve considered every aspect and believe that a car lease buyout is a good option for your budget and finances, then you might be wondering “How does a lease buyout work?” You can expect it to go something like this:

  • 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 car 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. Some drivers choose to pay for their car lease buyout in full if they’ve been saving for it, but there are also car lease buyout loans available. If you plan to finance your lease buyout, now would be a good time to apply for pre-approval with a few lenders to see how you qualify. Often, you can secure financing through the same dealership you had your lease with, but you can shop around all of your options, too.
  • Negotiate and finalize the buyout. It might be possible 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, all that’s left to do is finalize the buyout and own the car for good.

Learn All About Car Financing from Gunter Nissan of Martinsville

Now that you know all about the lease buyout definition, discover more about auto financing in the Ridgeway area from Gunter Nissan of Martinsville. Contact us at any time for more information and we’d love to provide you with our handy resources!

 

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Gunter Nissan of Martinsville 36.6295882, -79.8601893.