Lease Buyout 101: What You Need To Know
How To Buy A Leased Car
The best car for tomorrow might be the one you drive today! Why? Because you already know your vehicle, its history and maintenance, and best of all, you’ve already paid for the bulk of depreciation through the lease. It just might make sense to consider buying your leased car once it comes off lease – and you might even be able to lower your monthly payment even more!
Let’s Recap Market Changes From Three Short Years Ago
Here’s why it might shock you when you go back to the dealer to lease a new car and see how much higher your monthly payment will be:
- Interest rates are higher. Your lease has a “money factor” which is what you pay for “borrowing” the money in the lease. Today, that money factor will be higher than three years ago – and that alone could add $100 or more to your new monthly lease payment.
- New vehicle prices have increased. Higher priced vehicles mean higher lease payments usually. Some people try to extend out the term longer than you want the vehicle just to afford the payment, but this is never a good idea.
- Lease end vehicle values are likely lower. Many manufacturers are reducing leasing in their portfolios – and one way to do that is to lower the lease end vehicle values so leasing is less attractive to consumers. That also drives up the monthly payment in a lease; you’ll be paying more to amortize the lease each month.
Should I Buy My Leased Car?
Although it’s a used car, it’s still relatively new and likely has low miles. You’ve driven it and you know how good it still is (assuming that’s the case). And you’ve probably have done all the required maintenance.
But here’s the best part – it’s likely relatively cheap to buy versus a similar new car, often by about half! Think about that for a second. Where else can you purchase a car you know well – and one that’s nearly the same as a new vehicle – for half price? You can’t – other than your leased vehicle!
How to Buy Your Leased Car- Step by Step
Every consumer vehicle lease in the USA is considered a “closed end” lease. That means you have the option to do one of two things at lease end: 1) return your vehicle to the leasing company; or 2) purchase your vehicle at the stated value in the lease plus any fees or taxes (if applicable).
If you think you want to purchase your car at lease end, simply determine the “lease buyout” price. Typically you can get the lease buyout price from your lease contract (or through your online account with your leasing company). Your lease buyout price is the amount you can buy your car for. You can either pay cash or get a new loan to buy the car. Your new loan can be from any financing source (you do not need to use your current leasing company). FiWize has a great loan for lease buyout purchases, and we might even be able to lower your monthly payment from what you pay today!
- First, get your lease buyout price from your current lease contract.
- Next, request a quick lease buyout quote through FiWize (call us or click “Get My Quote” below). There is no impact to your credit score to get a quote with FiWize and there is no obligation to continue with a loan. Plus, we don’t send your information to multiple banks (we don’t like that either).
- We’ll quickly provide you a lease buyout loan quote so you can decide if you like the payment terms and want to buy your car. If you have questions, call us. We’ll walk through the details with you so you understand how it all works.
- If you decide to pursue the offer through FiWize, we’ll make it as easy and pain free as possible. We’ll even manage the contract paperwork process for your new loan. Plus, we’ll work directly with your current leasing company on the close out of your lease obligation. This is just the way FiWize rolls! You can continue to drive your car the entire time.
Have more questions? Call us, we’ll be happy to explain the details.