What is a Lease Buyout?

Handing over car keys

A lease buyout is when you opt to “buy out” the vehicle before the end of the lease contract. You will have two different types of buyouts to choose from, and it’s important to know the difference. Review your options to see which works best for you, then make your way to Middletown Honda near Monroe.

Lease-End Buyout

This most common type of buyout is the lease-end buyout. It requires you to pay what the vehicle is expected to be worth by the end of the lease period. This price point will normally be agreed upon before you sign your lease contract. This choice is a good deal if:

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

One perk to a buyout is you know the condition and history of the vehicle you’ve been leasing, unlike when purchasing a different used car.

Early Lease Buyout

With an early lease buyout, you can purchase your vehicle before the end of the lease contract. Not all lease contracts allow this, so if this is something you might be interested in, make sure to speak with the dealership before signing a lease agreement. You’ll also want to consider if it is worth the long term investment for you to buy instead of lease. With this, keep in mind the history of the vehicle. Near the end of the lease, the price is determined by:

  • The lease-end residual value on your original contract
  • The amount you still owe on the lease
  • If the vehicle has depreciated quicker and is below market value, you might have to pay the difference

Many times, buyers consider this type of buyout when they’re concerned about incurring lease penalties for going over mileage, not maintaining scheduled services, or damages to the interior or exterior of the vehicle.

Couple meeting with a finance advisor

Learn More About Leasing and Buying at Middletown Honda

Now you’ve answered the question: How does a lease buyout work? You can decide if either of these options are right for you. Assess your car loan, the wear and tear, and purchase price to see if either of these buyout options are worth the investment for you. If you have any questions, the finance team at Middletown Honda is happy to answer them! And before you stop by, be sure to check out our Honda lease specials and Civic lease specials.

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