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What Is a Lease Buyout?

Leasing Stamp of Approval

When your car lease is about to end, you have two options: return the vehicle to the dealership and settle any remaining fees or negotiate a car lease buyout. But what is a lease buyout, and how does it work? Check out the lease buyout definition below to find an option that suits you best. Then head over to Badger Truck & Auto Group near Chicago.

Lease-End Buyout

The lease-end option is the most commonly selected one and requires you to pay the expected value of the vehicle at the end of the lease period. Usually, this price is agreed upon before signing the lease agreement. This choice is a wise decision 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

Additionally, when you buy your leased vehicle at the end, you know its condition and history as opposed to buying a different car. That’s a win! 

Early Lease Buyout

If you are leasing a vehicle and want to purchase it before the lease contract period ends, you may have that option. However, not all lease agreements allow it, so it is essential to check beforehand. Keep in mind when nearing the end of a lease, that the price of the vehicle is determined by its history, but also:

  • 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

Before considering an early lease buyout, it is important to assess whether it is a wise long-term investment. Buying instead of leasing may not always be a financially sound decision, but it is completely up to you and what you feel comfortable with. 

How Does a Lease Buyout Work? 

The basic lease buyout definition is when a dealership allows you to purchase a vehicle at or before the end of a lease contract for the price of its remaining value. If your goal is to own your vehicle and you think a car lease buyout is a good option for your budget and finances, how does a lease buyout work? Here are the beginning steps you can take:

  • Speak to your leasing company. As you approach the end of your lease, it’s a good idea to contact the leasing institution to learn more about your options. You can ask them about the process of purchasing your leased car from them, and they can provide you with information about any fees that may be involved.
  • If you’ll be financing the buyout, apply for pre-approval. Some drivers in Madison pay for their car’s lease buyout in full or use car lease buyout loans. Apply for pre-approval with a few lenders to see how you qualify for financing. You can secure financing through the same dealership or explore other options.
  • Negotiate and finalize the buyout. Many people don’t know this, but it’s actually possible to negotiate a lower price for your car lease buyout. Once you’ve agreed on a comfortable price and secured financing, finalizing the buyout should be easy!

Get Your Lease Buyout Options at Badger Truck & Auto Group

Since we’ve answered the question: how does a lease buyout work and what is a lease buyout, you can confidently decide which option works best for your Waukesha lifestyle! However, if you have any questions about the lease buyout definition, contact our finance department online. 

Still on the fence about whether you want to keep your vehicle long-term? Check out our new vehicle inventory to see if anything catches your eye. 

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