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What is a Lease Buyout?

Couple sitting at sales desk at dealership

 

If you’ve ever bought a vehicle from a dealer, you’ve probably heard the term “lease buyout” but what does it mean? The 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. Below, we go into more detail on questions like, “What is a lease buyout?” and “Wow does a lease buyout work?” We want our Larchmont and Bronxville customers to have all the informaton they need to make the best possible decision.

Car-Lease Buyout

There are different types of car lease buyouts, so it’s important to know the differences. See below to get a better idea how lease-end and early lease buyouts differ.

Lease-End Buyout

This option is the most common. The lease-end buyout requires you to pay what the vehicle is expected to be worth by the end of the lease period. Normally, this price point is agreed upon before you sign the lease agreement. This choice is a good deal 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

Another perk is knowing the condition and history of the vehicle you’ve been leasing, unlike when purchasing a different used car.

Early Lease Buyout

When it comes to an early lease buyout, you’re able to purchase your vehicle before the end of the lease contract. While this isn’t always an available option, you can contact our New Rochelle dealer to learn more about it.

Not all lease contracts allow early lease buyout, so be sure to check beforehand to see if this might be an option for you. Before considering an early lease buyout, you’ll also want to be sure it’s worth the long-term investment to buy instead of lease (buying vs leasing page). With this, keep in mind the history of the vehicle. Near the end of the lease, the price is determined by:

  • 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

Most times, buyers consider this buyout when concerned about lease penalties like going over mileage, not maintaining scheduled services, or damages to the interior or exterior of the vehicle.

How Does a Lease Buyout Work?

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 institution. When you’re nearing the end of your lease, reach out to the institution you’re leasing with to inquire about your options. They can tell you more about how a car lease buyout works with them, including whether there are any fees associated with facilitating a buyout.
  • If you’ll be financing the buyout, apply for pre-approval. Some Mamaroneck drivers choose to pay for their car lease buyout in full if they’ve been saving for it, but there are also car lease buyout loans available. If you plan to finance your lease buyout, now is a good time to apply for pre-approval with a few lenders to see how you qualify.
  • Negotiate and finalize the buyout. There may be room to negotiate your car lease buyout down to a lower price. Once you’ve settled on a price you feel comfortable with and secured your financing, all that’s left to do is finalize the buyout!

Learn More at Mercedes-Benz of New Rochelle

So if you’re looking to make a few changes, we can help you figure out what leasing option is right for you. Take a look at our new vehicle inventory, visit our finance center, or contact us and we’ll get you started on this new journey!

 

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