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How to Calculate a Car Lease Buyout

Hands Doing Calculations with Calculator

 

Sometimes you fall in love with the car you’re leasing. If you’ve decided to buy out your lease, the team at Sam Leman Mazda is here to help you learn how to calculate a lease buyout. Explore how much you’d be paying for the vehicle you’ve used during your Normal commutes. Don’t hesitate to contact us if you have any questions!

 

 

Is it Worth Buying Out Your Lease?

The “Buyout Amount” or “Payoff Amount” may be listed on your monthly statement. This amount covers the residual value of the vehicle, the remaining payments due, and any car purchasing fees that apply. If that information isn’t listed, or you prefer to learn what goes into the process, here’s how to calculate lease buyout:

  1. Determine the residual value of the vehicle: This amount is calculated at the beginning of the lease and covers the estimated future value of the vehicle at the time that the lease contract ends. This information can be found on your lease contract.
  2. Determine the actual value of the vehicle: To learn how to calculate your car lease buyout, use our trade-in value tool or a service like Kelley Blue Books to determine your vehicle’s current value as it allows you to factor in unavoidable depreciation or any wear and tear gathered from driving around Springfield. If you’ve accumulated less than the typical 12,000 miles per year during your trips, it may not have depreciated as much as you think.
  3. Compare the residual value and the actual value: You may find that the actual value is higher than the residual value listed on your lease contract. This means purchasing the vehicle might be a good deal. If the situation is reversed, you may be able to negotiate with the dealer for a better purchase price.
  4. Account for license and registration fees: While you’ve discovered the bigger cost, learning how to calculate car lease buyouts should also factor in fees from the state DMV. This includes title transfer costs, licensing, and registration fees. Learn what fees are associated by exploring the DMV site, and check with the leasing company to see if they have any fees associated with a buyout.
  5. Account for sales tax. There is also a local sales tax that comes with the purchase of a vehicle. Learn more about the tax rate from the DMV or government site and factor that into your buyout cost.

Lease-End Buyouts vs. Early Lease Buyouts

Now that you have an idea of how to calculate a lease buyout, your situation can vary depending on if it’s an early buyout or at the end of the lease:

  • Lease-End Buyouts: You may be able to negotiate a better buyout offer when you’re at or near the end of your lease. Instead of having to sell the vehicle back to the dealership, they may offer a better deal when you want to keep the vehicle for your Morton commutes.
  • Early Lease Buyout: If you’re not close to the end of your lease, you’ll have less wiggle room when trying to negotiate a purchase price. From too much wear or tear to the possibility of exceeding mileage limits, the dealer has more leverage with drivers who are prematurely ending their lease.

Explore Your Financing Options with Sam Leman Mazda!

If you have any questions about how to calculate a lease buyout or your other financing options, the team at our Bloomington finance center is here to help! Continue preparing for the car buying process with our payment calculator.

 

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