Car Lease Purchase Options
If your lease is up, you can purchase it for the amount stated in your contract; the buyout amount is listed as the last payment. You can finance through the bank you leased from or from a lender of your choice.
If you went over your mileage and are concerned about lease-end fees, you can also trade your lease toward another car purchase.
You can finance through any bank you want, or have the original leasing bank finance the balance due. You don’t have to finance the entire amount if you want to put money down toward the purchase price.
Most states only charge tax on the payments you make, so you can expect to pay taxes on the finance amount, as well. Keep this in mind when you finance; you can put the tax amount down or include it in your loan. However, you will pay interest on your tax amount, so avoid financing it if possible.
Check rates before deciding where to finance your lease balance. Leasing banks, such as NMAC (Nissan Motor Acceptance Corporation), GMAC (General Motors Acceptance Corporation) or other manufacturer banks, are not the most competitive for rates when it comes to used-car purchases.
You may fare better with a local bank or a credit union. Call banks to check used-car rates before deciding where to apply. Your interest rate can save you thousands throughout the term of your loan depending on how much you borrow.
Trade the Vehicle
You can let a dealership purchase your vehicle by trading the car toward another purchase; you do not have to finance the amount due. If you are concerned with lease-end fees, you can avoid them by allowing the dealer to purchase your vehicle from the bank.
If you owe more than the vehicle’s value, you can put money down toward a new purchase or carry it over. If you owe less than the balance due, you will have a credit go toward your new loan.
Your vehicle’s lease-end value was determined at the beginning of your lease. This amount is a guess based on future market values and lease-end mileage. Also, people typically pay more to purchase a lease because of lack of negotiating in the beginning of the contract. Many buyers focus on monthly payment and not overall sales price.
Before deciding to purchase your lease, make sure your value is correct. Check the vehicle’s value at Edmunds.com or the Kelley Blue Book website. You may fare better walking away from the lease if the value is not correct.