What is a Lease Buyout?

Woman reading a car purchase contract

Are you considering leasing and wondering, “What is a lease buyout?” Simply put, the lease buyout definition is when the dealership offers you the option to “buy out” the vehicle before the end of the lease contract. It’s important to explore your options, as there are two different types of buyout options to choose from. Take a look at the different types to see which works best for you, then make your way to Mercedes-Benz of Louisville near Elizabethtown to learn more about your leasing options!

Option 1: Lease-End Buyout

The lease-end buyout is the most common option Clarksville drivers take advantage of, and requires you to pay what the vehicle is expected to be worth by the end of the lease period. This price point is usually discussed and agreed upon before you sign the lease agreement. This choice is a great option if:

  • There’s no other vehicle at a similar price point that you’d like better.
  • You’re happy with the vehicle.
  • There have been little to no repairs since you’ve had the car.
  • You can get a good interest rate to finance the buyout price.

Knowing the condition and history of the vehicle you’ve been leasing is an additional perk of doing a lease buyout, unlike purchasing a different used car.

Option 2: Early Lease Buyout

In an early lease buyout, you can purchase your vehicle before the end of the lease contract. It’s important to note though, that not all lease contracts allow this, so be sure to check with your dealership beforehand. When considering an early lease buyout, you’ll also want to be sure it’s worth the long-term investment to buy instead of lease. In this case, you’ll want to take into consideration the condition and history of your vehicle. Once you near the end of the lease, the vehicle price is determined by:

  • The amount you still owe on the lease.
  • The lease-end residual value on the original contract.
  • You may have to pay the difference if the vehicle has depreciated quicker and is below market value.

Usually, buyers consider this early buyout option when they’re concerned about lease penalties like going over mileage, damages to the interior or exterior of the vehicle, or not maintaining scheduled services.

Learn More About Leasing at Mercedes-Benz of Louisville

Now that you’ve answered the question, “How does a lease buyout work,” you’re armed with the knowledge you need to make the best decision. Weigh these two car lease buyout options, making sure to assess your car loan, the wear and tear, and purchase price to see if this investment is worth it for you. If you have any leasing questions or want to know what is a good car loan rate, feel free to reach out to our finance department today!

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