You might be able to buy a car from a lessee. The process is more complicated than a private-sale purchase, as the lessee doesn't actually own the vehicle. During a lease, a bank owns the vehicle and the lessee only pays for depreciation. Banks differ on lease-purchase options, but you'll probably have to purchase the vehicle directly from the bank.
Bank Contact
Call the lender directly to find out if you can purchase the leased vehicle. Depending on state rules, the bank might not be able to sell you the car. If not, you'll have to purchase the vehicle from the lessee after he buys it himself from the leasing bank. Check with the bank and your state's motor vehicle department to determine tax rules, as the lessee might have to pay taxes when purchasing the vehicle from the bank. Depending on vehicle tax rates in your area, the lessee might have to pay thousands in addition to the lease buyout amount. Otherwise, obtain a buyout amount from the bank and arrange to make payment directly to the lender, not the lessee.
Time Frame
The purchase process may take time, depending on your state's title rules and the bank's process for releasing titles. If the lessee has to purchase the vehicle from the bank, he may have to wait several weeks before he receives the vehicle's title. Or, if you make payment directly to the bank, the process can take just as long. Before you agree to a purchase, find out how long it will take to receive the vehicle's title. Otherwise, you might find yourself without a car.
Lease Purchase Price Versus Market Value
Purchasing a leased vehicle isn't always cost effective. The bank's purchase price is usually a predetermined amount calculated at the time of the original lease. The bank may have calculated the future value incorrectly or the market might have changed, reducing the present value of the car. Use online appraisal guides, such as Edmunds.com or the Kelley Blue Book website, to determine if the bank's purchase price is more than the vehicle's private or resale value. Also check the cost of the same vehicle as a brand new option, as interest rates and rebates might save you money.
Another Option
Consider assuming the lessee's contract. If there's still time left on the lease and the bank allows lease assumptions, you can take over the remaining lease and decide if you want to purchase the car at the end of the term. This might prove an ideal option if the lessee would otherwise have to purchase the vehicle before he could sell it to you. At the end of the lease, you can return the vehicle and walk away, or purchase it for the buyout amount. You must have good to excellent credit to assume someone's lease.
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