How to Buy Out an Automobile Lease Option

If you are currently leasing a vehicle, and you realize your lease will mature soon, you are likely weighing your options. One option is to buy out the lease. This allows you to buy the car for its residual value or less so you can continue to drive it. Buying out a lease at maturity can be a confusing process, but it is one that can potentially get you a good deal on a car you are already accustomed to.

Instructions

1

Determine the residual market value of the vehicle. In most cases, the residual market value will be determined before a vehicle is leased, and will appear on your lease paperwork. This is not the price you should plan to pay--your goal should be to negotiate a price well below this amount.

2

Use a valuation service such as Edmunds or Kelley Blue Book to determine the wholesale price of the vehicle. Aim for a purchase price that is as close to the wholesale value as possible.

3

Contact the leasing company and tell the sales representative that you are interested in buying out the lease. Also tell the representative the price you want to pay. A leasing company typically loses money on a lease return, particularly if it auctions the returned vehicle, so most leasing companies will be happy to work with you.

4

Negotiate a fair price for the vehicle if the bank or leasing company does not accept your initial offer. A short negotiation can make the leasing companys decision-makers feel better about the transaction, while still saving you hundreds or thousands of dollars.

5

Arrange for payment of the negotiated price and sign any necessary paperwork. If you are paying for the car out of pocket, you will simply write the leasing company or bank a check, sign some paperwork and go on your way. If you plan to finance the buyout, you will need to fill out a loan application, allow the company to review your credit report and fill out paperwork related to your loan.