What is a Lease Buyout?

For decades, automotive leasing has been a go-to method for securing financing and getting into a new vehicle – but what happens at the end of a lease? Luckily, there’s a couple options available to you when your vehicle lease is coming to an end. These options include returning the vehicle to the dealership, or negotiating an automotive lease buyout – of which there are a couple variations. 

Learn about your lease buyout options and get a hold of Mercedes-Benz of Princeton if you have any additional questions. It’s easier than ever to get a hold of us online, all you have to do is fill out this easy online form!

Lease-End Buyout

Most commonly known and used is the lease-end buyout. It’s a fairly simple concept, requiring drivers to pay what the vehicle is expected to be worth when the lease ends. This price is agreed upon before the initial lease agreement is signed. It’s an excellent choice if: 

• You’re happy with the vehicle
• 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
• There have been little to no repairs since you’ve had the car

Early Lease Buyout

An early lease buyout is pretty self-explanatory. It simply involves buying out the lease before the end of the lease term. Not all leasing contracts allow this option, however, so it’s important to discuss this option before signing the lease. Also, it’s important to make sure this outright purchase is worth the long-term investment instead of leasing. When the lease is coming to an end, 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

How Does a Lease Buyout Work? 

How does a lease buyout work? It’s a reasonable question to ask. It’s an excellent option if your goal is to own your leased vehicle eventually. Here are the steps you can take to achieve that goal:

• Speak to Your Lease Provider: Before your lease comes to an end, contact the institution you’re leasing with to ask about your early buyout options.
• Financing the Buyout? While some people will save up for a lease buyout, others may opt to finance their buyout cost. Save time by pre-applying for financing to cover these costs.
• Negotiate and finalize the buyout. Sometimes there’s even room to negotiate your car lease buyout down to a lower price.

Learn More Financing Tips at Mercedes-Benz of Princeton!

How does a lease buyout work? Now you know, which means it’s time to take the next step! Visit our sanitary and modern showroom, just a quick drive from Princeton. Our team of professionals is ready and waiting to help you with any finance questions you may have!