5 reasons why you might want to buy your leased car

The average closed-end lease comes with two 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.

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 36,000 miles — 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 of a few hundred dollars, being just a few miles over the limit may not make buying your car worthwhile.

On the other hand, if you only drove your car a few thousand miles, 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 check 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.

Compare car loans to buy your leased car

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Name	Product	Filter Values	Minimum credit score	APR	Loan term	Requirements
PenFed Auto Loans			Varies	Starting at 1.79%	3 to 7 years	Active membership with PenFed	Low APR car loans from a well-known credit union.	Go to site More Info	Compare	loading Fetching your data...
Carvana			No minimum credit score	3.9% to 27.9%	Varies	18+ years old, annual income of $4,000+, no active bankruptcies	Get pre-qualified for used car financing and receive competitive, personalized rates.	Go to site More Info	Compare	loading Fetching your data...
car.Loan.com Car Loans			300	Varies by network lender	Varies by lender	Must be a US citizen with a current US address and employed full-time or have guaranteed fixed income.	Apply with a simple online application to get paired with a local auto lender. No credit and bad credit accepted.	Go to site More Info	Compare	loading Fetching your data...
CarsDirect auto loans			No minimum credit score	Varies by network lender	Varies by network lender	Must provide proof of income, proof of residence, and proof of insurance.	Save time and effort with this lending service specializing in beginner-friendly or subprime car loan.	Go to site More Info	Compare	loading Fetching your data...
Auto Credit Express Car Loans			300	Varies	Varies	Must be employed full-time or have guaranteed fixed income of at least $1,500/month and be a current resident of the US or Canada.	Get connected with an auto lender near you, even if you have bad credit.	Go to site More Info	Compare	loading Fetching your data...
Monevo Auto Loans			500	3.99% to 35.99%	3 months to 12 years	Credit score of 500+, legal US resident and ages 18+.	Quickly compare multiple online lenders with competitive rates depending on your credit.	Go to site More Info	Compare	loading Fetching your data...
LendingTree			Good to excellent credit	Starting at 0.99%	Varies by lender	18+ years old, good to excellent credit, US citizen	Compare multiple financing options for auto refinance, new car purchase, used car purchase and lease buy out.	More Info	Compare	loading Fetching your data...
myAutoloan.com Car Loans			550	Starting at 1.89%		550+ credit score, no open bankruptcies, $24,000+ annual income, US citizen or permanent resident, 18+ years old	Get up to four offers in minutes through one simple application. Multiple financing types available including new cars, used cars and refinancing.	Go to site More Info	Compare	loading Fetching your data...

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Bottom line

Whether you’re seriously over your mileage limit or simply fell in love with your leased set of wheels, buying out your car lease can come with a few benefits. Doing your research on sites like Kelley Blue Book and Edmunds can help inform negotiations and ensure you get a competitive price.

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

Frequently asked questions

• Are there any fees associated with buying out a car lease?

  Yes. The main fee you should be aware of is the purchase option charge, which is typically a few hundred dollars. But since you’ll have to pay a disposition fee if you choose to return your car, the cost may balance out — or lean in your favor.

• Am I able to buy out my lease early?

  Yes, but it can be expensive. The price the leasing company sets is determined by the residual value of your car as well as your remaining payments.

  Plus, many lease contracts include an early termination fee as well. Depending on the leasing company, it may be more cost effective to wait until your contract ends to purchase your car.

• Can I finance a lease buyout at a bank?

  Yes, many banks like Bank of America and PNC Bank offer lease buyout options as part of their suite of car loans.