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5 reasons why you might want to buy your leased car

And avoid those pesky disposition fees that come with returning it to the dealership.

Updated

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

Data indicated here is updated regularly
Name Product Filter Values Minimum credit score APR Loan term Requirements
Carvana
No minimum credit score
3.9% to 27.9%
1 to 6 years
18+ years old, annual income of $4,000+, no active bankruptcies
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.
CarsDirect auto loans
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.
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.
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.
LightStream Auto Loans
Good to excellent credit
Competitive
2 to 7 years
Good or excellent credit, enough income or assets to afford a new loan, US citizen or permanent resident, 18+ years old
Quick car loans from $5,000 to $100,000 with competitive rates for borrowers with strong credit.
LendingTree
Good to excellent credit
Starting at 3.09%
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.
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Compare up to 4 providers

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.

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