Tips for Buying Out Your Car Lease

Tips for Buying Out Your Car Lease

Tips for Buying Out Your Car Lease

OK, so you're at the end of your lease, and you don't want to give up your car. Just like buying a car, there is some research to be done to nail a good deal.

First and foremost, you should know the full cost of buying out your car lease. On the lease contract you signed, there should be a "purchase option price" - this should tell you the buyout cost. This fee is usually a set value from the leasing company that takes into account the value of the car at lease-end and of course a 300-500 dollar purchasing fee. When you signed on the dotted line, your monthly payments were calculated as the difference between the vehicle's sticker price and its estimated value at the end of the lease, plus a monthly financing fee. The estimated value at the end of the lease is what they call residual value. Basically, it is the expected value of the car at the end of the lease. For example, a car with a 50% residual percentage and a sticker price of $40,000 will have an estimated $20,000 value at the end of the lease.

This should give you an idea as to the cost of buying your car at lease end. Now you should work on figuring out the actual value, or market value, of your car. In order to determine how much your car is worth in the market, you're going to have to do some research. Compare what different dealers are listing your vehicle at. Be sure to take mileage and condition into account when you do so. Use online pricing websites, such as Cars.com, Edmunds.com and Kelly Blue Book for detailed pricing information. Gleaning pricing information from various sources should give you a fair estimate of your vehicle's retail value.

All you have to do now is compare the two amounts. If the residual value is lower than the actual retail value, than you're into a winner. Unfortunately, there is a good chance a car coming off a lease is a little on the high side.

Car leasing buyout tips.

There's no need to panic though, leasing companies generally know this and are usually willing to accept deals. You can knock down on the price of your leased vehicle with some smooth negotiating tactics. Put forward a price that is below your actual target and negotiate hard until you wind up near that figure. Hopefully, these car buying tips will help you succeed in this.

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