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5 reasons why you might want to buy your leased car

Avoid the pesky fees and added charges that come with returning your leased vehicle to the dealership.

The average closed-end lease comes with 2 options when your term is up: Return your car or buy it from the leasing company. While the buyout price may be set at the beginning of your contract, it’s still something you can typically negotiate — and you might want to if you find yourself in any of the following situations.

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1. You’ve fallen in love with the car

If you can’t imagine driving any other car and you’re ready for a larger commitment, then buying out your lease may be the right choice. This helps you avoid the hassle of shopping around for another car and potential issues that could come with purchasing a used car you’re not familiar with.

2. The car has sustained some damage

Regularly driving your car will inevitably lead to mild damage — and your lease likely already accounted for this. But if you’ve racked up more than a few minor scrapes and dings, you could face several penalty fees for excess wear and tear. Buying your leased vehicle means you can skip paying fees to have the car fixed and sold to another buyer by the dealership.

3. You’re over — or under — the mileage limit

Going over your lease’s mileage limit — typically no more than 20,000 km — can result in large fees. Buying your vehicle avoids them entirely, as well as disposition fees and other charges that come with returning the car to the leasing company. But you’ll have to balance this out. Since many leases come with a buyout fee generally ranging from $500-$1,000, being just a few kilometres over the limit may not make buying your car worthwhile.

On the other hand, if you only drove your car a few thousand kilometres, you’ll practically be handing the leasing company your money if you choose to return the car. Buying out the lease means you can sell the car yourself and benefit from its added value. You may also have the option of returning the car and receiving a cheque from the leasing company for the difference between its actual value and estimated residual value. But you can typically turn a larger profit if you sell the car yourself.

4. You already found someone who wants to buy the car

If you have a friend who wants to buy your car, you can always purchase it from your leasing company and sell it to them. However, you’ll be on the hook for sales tax. To avoid this, you can also contact a local dealership to see if they’re willing to do a lease pass-through, in which the dealership buys your car first and then immediately sells it to your friend. The dealer will turn a quick profit, plus it saves you from paying sales tax and makes the transfer process easier.

5. You can negotiate a lower buyout price

Leasing companies will sometimes offer a lower buyout price to avoid having to pay for shipping and auction fees after you return your car. But just because it’s less than what’s on your original contract doesn’t mean it’s a good deal — you’ll still want to negotiate further to get the lowest possible buyout price. The closer you can get to the wholesale value of the car, the better.

What happens at the end of a car lease?

Compare car loans to buy your leased car

Name Product Min. Loan Amount Interest Rate Loan Term Min. Credit Score Requirements
CarsFast Car Loans
$500
4.90% to 29.90%
12-96 months
300
Min. income of $1,800 /month, 3+ months employed
Browse thousands of vehicles from dealers across Canada and get matched with financing that meets your needs. Apply online to purchase a new or used vehicle and get the vehicle delivered to your door.
Loans Canada Car Loans
$500
0% to 29.99%
3-96 months
300
Min. income of $1,800 /month, 3+ months employed
Get access to financing from multiple lenders across Canada through a single application with Loans Canada. Bad credit, CERB and EI borrowers are considered.
Car Loans Canada
$7,500
3.99% to 29.95%
12-84 months
300
Min. income of $2,000 /month, 3+ months employed
Search thousands of vehicles online, including $0 down options, from dealers across the country and get matched with affordable financing options. Auto loans are also available to those with bad credit, consumer proposals and bankruptcies to help rebuild credit.
Coast Capital Car Loan
$10,000
Varies
18-84 months
650
Able to service debt payment of $300/month
Finance or lease both new and used vehicles with competitive rates and flexible terms from one of Canada's largest credit unions. No credit union membership required for this product.
Canadian Auto News
$7,500
3.99% to 29.95%
12-84 months
300
Min. income of $2,000 /month, 3+ months employed
Answer a few simple questions to get matched with affordable financing options. Auto loans are also available to those with bad credit, consumer proposals and bankruptcies to help rebuild credit.
LoanConnect Car Loans
$500
9.90% to 46.96%
3-120 months
550
No min. income requirement
Get access to 25+ lenders through LoanConnect's brokerage. Receive pre-approval in as fast as 60 seconds and get your funds in as little as 24 hours.
Canada Auto Finance
$500
4.90%-29.95%
3-96 months
300
Min. income of $1,500 /month, 3+ months employed
Canada Auto Finance is a broker that connects borrowers with partnered local lenders. Financing for a new or used car is available for borrowers with bad credit, no credit, CERB, EI or bankruptcy.
Carloans411 Car Loans
$500
1.90% to 19.99%
Up to 72 months
300
Min. income of $1,600 /month, 3+ months employed
Get connected with suitable lenders through CarLoans411. Finance your next car, van or truck with loans available in amounts from $500 to $50,000. Check eligibility for this loan through LoanConnect.
Fairstone Secured Personal Loan
$5,000
19.99% to 23.99%
36-120 months
560
Established credit history and own your home
Fairstone offers secured personal loans up to $50,000.
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Bottom line

Whether you’re seriously over your mileage limit or simply can’t bear the thought of parting with your leased set of wheels, buying out your car lease can come with a few benefits. Doing your research on sites like the Canadian Black Book and autoTrader.ca can help inform negotiations and ensure that you get a competitive price.

When you’re ready to commit, compare your car loan options to help you finance your buyout.

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