What is a Lease Buyout?

Man and Woman Signing Contract

If you love your leased car and don’t want to give it up, a car lease buyout may be right for you. So what is a lease buyout, and when is it the right choice for Holmdel drivers? A lease buyout allows you to purchase your leased vehicle by paying off the difference between the amount you paid over the lease term and the car’s estimated market value.

If that sounds like it could work for you, keep reading for the answer to your next logical question: “How does a lease buyout work?” In this guide from the Ray Catena Lexus of Freehold finance team, we’ll provide a detailed lease buyout definition to help you decide between lease-end buyout and early lease buyout options.

Lease-End Buyout

How does a lease buyout work? You have two primary car lease buyout options: wait until the end of your lease (lease-end buyout), or buy out your leased vehicle before the lease term is up. The majority of Colts Neck drivers choose lease-end buyout. So how does a lease buyout work when you buy out at the end of the term? Simply put, you pay the difference between what you’ve already paid on the car and its estimated value at lease-end. Lease-end buyout is probably the right choice for you if:

  • You love your car, and there’s no other similarly-priced model you’d rather be driving.
  • Your car has never needed major repairs or sustained significant damage.
  • Your credit score earns you a low interest rate to finance the buyout price.

Early Lease Buyout

A car lease buyout is kind of like buying a used car… from yourself. But in this scenario, you know everything there is to know about the vehicle’s condition! If you’re wondering what a lease buyout is called when you buy out before the lease ends, you’ve probably already guessed that it’s called an early lease buyout. 

If you don’t wait until the end of the term, then how does a lease buyout work? For many Old Bridge drivers, early lease termination fees mean that lease-end buyout isn’t worth it. However, buying out early maybe your best bet if:

  • You’re concerned that lease penalties may apply because you’ve exceeded mileage limits or haven’t kept up with your specific vehicle’s maintenance schedule.
  • Your car has exterior or interior damage that may trigger lease penalties.
  • Your vehicle has depreciated more quickly than expected and is now worth less than the estimated market value.

Negotiate Your Car Lease Buyout at Ray Catena Lexus of Freehold

Now that you have a lease-end vs. early lease buyout definition, we’re here to help you decide which is best for your situation. Contact us for car-buying advice from our experienced auto finance experts, or visit us in Freehold today!

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