How to Calculate a Lease Buyout

Have you fallen in love with the vehicle you’ve been leasing in the St. Marys area? The good news is that you don’t have to part with it! One of your lease return options is to purchase the vehicle, commonly called a “lease buyout.” In what’s to come, you’ll learn how to calculate a lease buyout so you can estimate how much it will cost to purchase your lease — and whether it makes financial sense to do so.

Learn How to Calculate a Car Lease Buyout in 5 Steps

Review your monthly leasing statement before teaching yourself how to calculate a lease buyout. Sometimes, the monthly statement includes a “Buyout Amount” or “Payoff Amount,” comprising the car’s residual value from the start of the lease and the total remaining payment amount. Some leasing companies also charge a car purchase fee for lease buyouts. 

If you don’t see the Buyout or Payoff Amount on your leasing statement, review these steps for how to calculate a car lease buyout:

1. Determine the vehicle’s residual value.
   This information was determined at the start of your lease and will be found on your lease contract. It reflects the vehicle’s estimated future value when the lease contract expires.
2. Determine the vehicle’s current market value.
   Use your preferred trade-in calculator to estimate your car’s current market value. 
3. Compare the residual value and the current value.
   This will help determine if buying out your lease to own the vehicle in State College is a good decision. It could be smart to purchase the car if the current market value exceeds the residual value! On the flip side, if the actual value is lower than the residual value, you may want to just turn in the lease and consider another option.
4. Account for licensing and registration fees.
   If you want to move forward with a lease buyout, certain costs of ownership should be accounted for, including the title transfer, licensing, and registration fees. Learn more about these fees on the Pennsylvania DMV website.
5. Account for sales tax.
   You should also account for your local sales tax rate when buying out a car lease. 

Lease-End Buyouts vs. Early Lease Buyouts

Lease-End Buyouts: The best time to buy out a car lease is at the end of the lease. You might manage to negotiate a better buyout deal, and there won’t be an extra fee for ending the lease early.

Early Lease Buyout: If you seek to buy out your lease near Altoona before the scheduled lease-end period, you won’t have much power to negotiate. Whether you’ve damaged the car or are close to exceeding the mileage limit, you don’t have the leverage in an early lease buyout. Plus, you’ll have to pay a fee for ending the lease early. 

Contact Us with Any Questions

Do you have additional questions about how to calculate a car lease buyout? Contact us or stop by our dealership in Dubois! No matter your situation, our team is here to help you understand your options and make the best decision to move forward.