What Is A Lease Buy Out?

person holding a pen filling out paperwork

Whether you’ve been leasing for months or you’re just getting ready to start a new adventure, you’ve almost certainly been thinking about car lease buyouts and your other lease-end options. What is a lease buyout, anyway, and how does a lease buyout work? Although the process will vary depending on where you’re at in your contract, a lease buyout allows you to purchase and own the vehicle that you’ve been leasing.

Generally, the price of buying out a car lease is non-negotiable. The lease-end buyout price will be determined at the time that you sign your contract, and the cost of an early lease buyout will be calculated based on several factors, including any remaining time left of your lease. Before you commit, do some research and determine the actual market value of your vehicle. If it’s worth more than expected, buying out your car lease can be a very smart option! If not, you’re probably be better off with a different model.


If you’re anything like many of the drivers near South Jersey, NJ and Mount Laurel, NJ, you may fall in love with your leased Cadillac at some point during your contract’s term. That’s true even if you decide to lease used! If you’re ready for ownership, you don’t have to start from scratch.

A lease-end buyout allows you to pay the vehicle’s price and bring it home for good. This price is determined by what the vehicle is expected to be worth at the end of the lease period, but it is usually determined at the time when your lease contract begins. That makes it a good deal if:

  • You’ve stayed within your mileage limit
  • You’ve avoided accidents and breakdowns
  • You want to be really familiar with the car you buy
  • Its value has held up well, compared to expectations
  • The vehicle is in good condition and has been properly maintained
  • Maintenance costs will stay within your budget
  • Independent research supports your decision

Starting a lease buyout is simple enough, but trading in a financed car isn’t quite so easy. Make sure it’s the right path before you make the switch from a lease agreement to a loan. As with any other auto loan, choosing to buy out your lease will require you to choose between in-house financing and out-of-house alternatives. Our financing team is here to help you make the right call, whether you’re still on the fence about buying our your lease or you’re ready to move forward today.


If your leasing contract allows for an early lease buyout, there are several circumstances in which it may be the right path forward:

  • Most of the time, drivers consider an early lease buyout when the penalties accrued during the leasing period would cause financial hardship upon the contract’s end. 
  • Virtually all leasing contracts include mileage limits and service requirements, and you’ll have to pay if they aren’t met.
  • Have you caused significant damage to the vehicle’s interior or exterior? Don’t be surprised if you’re penalized.

How does a lease buyout work if you’re starting the process early? First off, you’ll pay the vehicle’s agreed-upon expected value along with whatever you still owe on the lease. You may also have to pay a penalty for opting out of the contract early. In cases where rapid depreciation has occurred, you may end up paying more than the vehicle’s actually worth, so be sure to do your research carefully.


If you really want to understand the lease buyout definition, you’ll also need to know the basic differences between financing and leasing. Have more questions after you’re finished? Need to know the credit score needed to finance a car? Our finance team would be happy to help you answer them. Here’s what you can do right now:

  • If you still can’t answer the question, “How does a lease buyout work?” reach out to our team for specifics.
  • What is a lease buyout going to cost you? If you can’t find your contract or you’re thinking of executing an early buyout, contact us for pricing specifics.
  • If you’re ready to get started with buying out your lease, apply for financing and get approved to move forward.

Still researching your options? Start browsing our car buying tips online, and feel free to give us a call! We’d love to be a resource for you, no matter which way you decide to go.