You Can Buy Out a Car Lease
If you’ve been leasing a car and you really hate to part with it as you come to the end of the lease term, you can usually purchase the vehicle. The advantage here is that you’re very familiar with the car and may find it can provide many more years of good service to you, the buyer. Let’s take a look at how you can make your leased car your next vehicle purchase.
1. Revisit the paperwork. You’ll need to review your lease paperwork to understand the requirements for buying your leased car. Look for the section in your lease agreement that spells out details about lease buyback. A buy out amount might be listed, but most likely that amount is determined at end of the lease term.
2. Contact the dealer. Call up the car dealership where you arranged the lease and ask for a lease buyout amount for your car. You may be asked to supply certain information including the miles on the odometer and the car’s general overall condition. Your information will be verified later when you bring the car in for dealer inspection.
3. Check the blue book value. Your dealer may have one price in mind, but you may discover that the car is being overvalued. Check Kelley Blue Book to find the car’s current value and use that amount as your negotiating price for the car. For example, if the dealer wants you to pay $10,500 for the vehicle and KBB says that it is worth $9,200, you’ll want to negotiate a price closer to the KBB value. Once you settle on the price, then you’re ready to move to the next step.
4. Arrange private financing. Contact your bank or credit union and explain that you’re interested in a car loan for a vehicle you have been leasing, but are now buying. You’ll be quoted terms based on a used car. If the terms are acceptable then apply for a loan. If not, shop elsewhere. Skip this step if you plan to pay cash for your car. Call your insurance company to arrange coverage.
5. Visit your dealer. Conclude the lease agreement with your dealer. Pay residuals owed and give cash or the loan check to the dealer. Once all paperwork has been signed, then you’re the owner of your previously leased vehicle. If you paid cash for the vehicle, then you’ll receive the title in the mail. Otherwise, your lender will get the title and will have a lien on your car until you pay it off.
6. Go to the DMV. Visit your state’s department of motor vehicle to register your car and to obtain tags. You’ll need to show proof of automotive insurance. Pay the applicable fees.
You’ll find it difficult to get a good deal on a leased vehicle if the car is in demand or if you have low miles. Consider walking away from the deal if the gap between what the dealer wants for the car and what you’re willing to pay for it is too broad to span.