What is a Lease Buyout?

The image illustrates the process of transitioning from a car lease to a lease buyout option.

By: Kim Gallagher

Jun 3, 2025

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6 minute read

Summary

A lease buyout allows you to buy the vehicle you’re leasing instead of returning it. Learn how a lease buyout works and the pros and cons.

In this article:

A lease buyout is when you have the ability, based on your contract with a dealership, to purchase your vehicle when the lease expires instead of returning it. Sometimes, you can even ask about a buyout before your lease is up.

If a lease buyout is an option, you may purchase the vehicle for the amount you agreed to in your contract, although some additional fees are to be expected.1 It’s helpful to consider a number of factors before you make a final decision, including the steps involved, the overall cost of the buyout, and whether you can negotiate. Go into the process armed with the right information, and you’ll be able to make the best decision for you.

How does a lease buyout work?

The lease buyout process includes a number of steps. Start by confirming the terms of your original lease and knowing your car’s market value, then look into how you might pay for the car. It may be helpful to refresh your knowledge of how car loans work and the key steps to take before you buy a car. Generally, the process will look something like this:

Step 1: Check your lease agreement

Review the contract you signed when you leased your car. This document should provide important information about any potential buyout options.

Step 2: Find out the buyout amount

Verify the agreed-upon buyout amount in the lease. If it’s not listed, contact the dealership and ask about the amount to help you make the best decision.

Step 3: Evaluate the car’s market value

Do some research on the car’s worth and current market value or residual value (what it’s worth at the end of the lease). It’s helpful to have these numbers in mind while you decide whether it’s a good financial decision to own the car.

You may want to rethink your decision if the market value is very low or less than what you would be paying for the buyout. You could also shop around to see if other dealerships are offering a better price on the same or similar make and model.

It might also be helpful to consider your budget and figure out how owning a car and all of its costs (maintenance and repairs) match your financial goals.

Step 4: Notify the leasing company

Contact the leasing company or dealership to let them know you are interested in moving forward with a lease buyout. If a buyout is part of your contract, the seller should be able to start the process.

Step 5: Secure financing or prepare the funds

You’ll need to secure financing or prepare your own funds to pay the residual value and any additional fees associated with the buyout payment. You can finance your car purchase through OneMain in two ways. If you qualify for a personal loan, you can use those funds to buy the car. Or if your dealer is part of the OneMain auto network, they can check to see if you qualify for a OneMain Auto Loan.

If a personal loan seems like a better fit, have your documents ready and consider what you can do to improve your chances of being approved.

Step 6: Complete the transaction

You’ll need to complete the following to seal the deal of your lease buyout:

  • You and the dealership will sign all required documents.
  • Submit your buyout payment in full.
  • The dealership will transfer the car's title to you.

Can you negotiate a lease buyout?

While you might be able to negotiate a lease buyout, there are some limitations to be aware of, depending on your agreement.

If the price of the lease buyout is set in your agreement, it may not be possible to negotiate a lower purchase price.

The vehicle’s current market value and condition might also be an important factor for the dealership to consider. If the car’s market value is lower than the residual value, you may have a better shot at negotiating a lease buyout since the dealer will have to put more work into leasing or selling the vehicle to someone else.2

Pros and cons of buying out a lease

There are a number of pros and cons to a lease buyout you may want to consider:

Pros

  • Convenient: It’s more convenient to keep a car you are comfortable with and used to driving.

  • Time-saving: You won’t need to spend additional time or energy shopping for a new car to purchase or lease.

  • Cost-effective: You might score a good deal if the buyout amount is less than the market value of the car.

  • Fewer fees: You may not have to pay additional fees the lessor typically charges for wear and tear and mileage since you’ll own the car.

Cons

  • Cost concerns: Depending on the terms of your lease agreement, you may find it cheaper to buy a similar car than to buy the vehicle you’re currently leasing. The stated buyout amount, often nonnegotiable, may be more than the vehicle’s market value.

  • Taking on debt: You might need to take out a loan or dip into your savings to finance a lease buyout, which may or may not work with your other financial goals.

  • Ongoing upkeep: If the vehicle isn’t in great condition, has high mileage, or requires ongoing maintenance, repairs, and insurance that will cost you a lot of additional money, it may not be the best investment.

Should you consider a lease buyout?

A lease buyout could make sense, depending on your personal situation. Here are a few common scenarios to consider:

  • Fits your budget: You can afford any additional costs associated with your lease buyout agreement, such as taxes and fees, as well as the ongoing maintenance of the car, in addition to your other monthly expenses.

  • Good market value: You’re satisfied with the car’s current market value (its estimated worth) compared to how much you are paying for the lease buyout, as well as the car’s resale value.

  • Loan repayment: You have the ability to repay the loan in full if you need to finance the lease buyout.

  • Convenience: You don’t want to switch to a new car, start a new lease, or purchase a different vehicle elsewhere.

Drive your decision in the right direction

It’s important to evaluate whether a lease buyout makes sense with your short-and-long-term financial goals and overall needs. Carefully consider the steps involved in a lease buyout from start to finish, calculate the numbers and compare your options before you make a final decision.

Sources:

1 https://www.caranddriver.com/auto-loans/a44064032/what-is-lease-buyout/

2 https://www.caranddriver.com/auto-loans/a41867067/can-you-negotiate-car-lease-buyout/

This article is for general education and informational purposes, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any purpose and is not intended to be and does not constitute financial, legal, tax, or any other advice. Parties (other than sponsored partners of OneMain Financial (OMF)) referenced in the article are not sponsors of, do not endorse, and are not otherwise affiliated with OMF.

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