Quick Facts About Buying Out Your Car Lease
- If the value of the vehicle is higher than the buyout amount, it may be wise to consider a lease buyback if you’re financially able to do so.
- Before you decide, research the current value of your vehicle and weigh all financial costs associated with a buyout and a new loan.
- Consider buying the car if the current value is higher than the lease buyback amount.
If your vehicle’s market value is higher than the buyout price in your contract, you could save money and avoid lease-end penalties. But before you decide, compare the buyout cost to the car’s current value, factor in financing options, and consider the car’s condition. In today’s tight used-car market, a lease buyout can be a smart move — if the math works in your favor. We’ll tell you what you need to know.
- What Is a Lease Buyout?
- Should I Buy My Leased Car?
- How to Buy Out a Lease on a Car
- When to Avoid a Lease Buyout
- Can I Sell My Car Immediately After Buying Out Its Lease?
What Is a Lease Buyout?
A lease buyout is the cost to purchase your leased car at lease end. It’s based on the car’s residual value, plus any remaining payments and fees.
At the beginning of your lease, the leasing company uses a formula that forecasts the car’s estimated resale value at the end of the lease. This residual value takes into account expected economic conditions, reliability records, and other factors.
Should I Buy My Leased Car?
If your lease purchase option price is lower than the car’s market value, it’s usually a smart move. Used car values have yet to return to pre-pandemic levels, and although inventory rose slightly at the end of 2025, supply is expected to remain tight into 2026. That works in your favor if your buyout price is at or below market value.
Still, there are other factors to consider, such as your budget, the car’s condition, and more. Ask yourself the following questions:
- Did you stay within the mileage limit allowed in the lease?
- Is the car in great working condition?
- Can you afford to buy the car?
“Buying out your lease can be smart if returning the car means paying more for its replacement,” said Chris Hardesty, Autotrader’s senior advice editor.
Pros and Cons of Buying Out the Lease
As with any purchase, there are pros and cons. Keep this in mind when evaluating if a buyout is right for you.
| Pros | Cons |
| Known history. You are already familiar with the vehicle’s condition and maintenance history. | The math doesn’t add up. If the car is worth less than the buyout price in the lease, it’s not worth the loss. |
| Potentially cheaper. It costs less than buying a new car and may even be less than a used car. | Future car problems. It may not be worth buying the leased car if it has had many recalls or reliability issues. |
| Cuts your losses. It may help you out of a bind if you exceeded your lease miles or had excess wear and tear. | Financing. High interest rates could make financing a car loan for the buyout expensive. |
How to Buy Out a Lease on a Car
Here are the steps to take to buy your car at the end of the lease.
1. Check Your Lease Agreement
The first step is to check the terms of your lease agreement or ask your lessor to see what you must pay to buy the car out of its lease terms. This information is typically available online by logging into the account where you make your monthly payments. However, making a phone call to the lessor can also be helpful.
When checking, ask about any associated fees or an early termination charge. Contact the lessor directly to determine exactly what you will owe, in case you have any doubts.
2. Research the Value of Your Vehicle
Using the car valuation tool from our sister site, Kelley Blue Book, calculate the approximate value of your leased vehicle. You’ll want to note your car’s current mileage and its current condition. Be sure to include any optional equipment the vehicle has. If available, refer to the original window sticker that came with the car.
Now, the math is simple. Is your car worth more than the buyout? If so, it may make a lot of sense to buy it. For instance, if the buyout value is $25,000, but the car now shows a trade-in value of $30,000, you would be $5,000 ahead.
3. Determine Your Financing Options
If you can pay cash to buy out your car lease, you’re lucky. But many drivers don’t have the cash to spend on the lease buyout. You can, however, shop for a loan to buy out your lease, just as you would for a regular used car loan. Analysts expect used car loan interest rates to ease in 2026, which could make financing a buyout more affordable.
4. Negotiate the Buyout
There are several situations where you may want to negotiate a buyout of your leased vehicle.
| Situation | Should I negotiate? |
| High-demand vehicle? | While the residual value is fixed and non-negotiable, it’s possible to get better terms for buying out your lease. For example, if a used vehicle is in high demand, a dealership may be willing to negotiate fees, financing options, and other contract terms with you and the lessor. You may be able to end the lease early without penalty, and the dealership can arrange a new lease or purchase, typically with the condition that the buyout car is in excellent condition. |
| Exceeded the lease miles? | You may want to end the lease early because you’re over your mileage cap. In that case, check for some strategies in our article: I’m Way Over My Car Lease Miles, What Do I Do? Strategies include negotiating a buyout. |
| Accident or damage? | It’s also possible to negotiate the end of the lease if the car is totaled or has damage that could cause you excess charges. In this case, you may need to work with your car insurance provider, and if the accident or damage was not your fault, the other driver’s insurer. Just be sure to include any required fees to end the lease as part of the negotiation. |
| Car value decreased? | In some cases, you may choose to negotiate the lease buyout if you truly want to purchase it, but the value of your leased vehicle is lower than the buyback amount specified in the lease. For example, some electric cars have seen significant price and value reductions. Of course, you can walk away. However, if the buyout price can be made right and you like the vehicle, why not try? |
| Car value increased? | If the value of your car is higher than your lease agreement buyout price, the math works in your favor. It is worth considering purchasing the vehicle. However, the only negotiation power you hold is to request lower financing on the loan, presuming your good credit allows you to do so. You could also ask that any fees be waived for the purchase. |
5. Sign the Paperwork
Once you negotiate the buyout, if it works in your favor, sign the paperwork and drive away in your car.
When to Avoid a Lease Buyout?
It may be best to turn in the keys and walk away from the leased car if the math doesn’t work in your favor. Be sure you factor today’s higher loan interest rates into your calculations.
A more complex decision might involve looking at the car’s reliability history. A manufacturer’s warranty likely covered your leased car, but that may not extend much — if at all — beyond the end of the lease. “You might be inheriting problems that you now have to pay to fix along with your monthly car payment,” Hardesty explained.
You may want to turn in the car if it has had frequent mechanical or electrical problems or if you were involved in an accident that resulted in major damage repairs that could affect your vehicle’s long-term value.
Can I Sell My Car Immediately After Buying Out Its Lease?
Some drivers may see dollar signs when they find out their leased car is worth thousands more than the lease buyback price. However, you’ll want to do a little local research first. And yes, if you buy out a car you lease, you can sell it. However, you could encounter speed bumps.
“Many states and counties have laws that prohibit anyone without a dealer’s license from purchasing a car to sell it immediately,” Hardesty explained. “This means you will likely need to pay to register the car and obtain new license plates.”
Timing is another issue. “The effort and time it may take to do that may be enough to put the brakes on your plans to turn the car into an immediate profit-maker,” Hardesty said. “Still, once it is your car, you’re free to keep or dispose of it as you see fit.”
If selling privately, check out Autotrader’s Private Seller Exchange. Otherwise, a dealership can work with you to buy the car out of its lease, allowing you to immediately trade it in to them. In that case, you may only own it on paper for a few moments. That could give your replacement car shopping budget the boost it needs.
In short, you can sell your car after a buyout, but expect paperwork, registration costs, and possible delays before turning a profit.
Editor’s Note: We have updated this article since its initial publication. Renee Valdes contributed to the report.
