How to Calculate a Lease Buyout

If you want to purchase the vehicle you are leasing, you are not alone. Plenty of drivers throughout Belleville and the surrounding neighbourhoods choose this lease-end option and continue enjoying the perks their vehicles provide. So, what does buying a leased vehicle involve? Learn how to calculate a car lease buyout today with the finance team at Mercedes-Benz Kingston. If you have questions for our finance experts at any time, contact us. 

How to Calculate a Car Lease Buyout: Steps to Take

The first step regarding how to calculate a lease buyout is checking your lease agreement. These agreements include the buyout or payoff amount, which includes the residual value of the model at the beginning of your lease and the number of remaining payments. If there is a car purchase fee, that is included on the leasing statement as well. Whether there's a fee depends on the leasing company. 

You can also perform your own research. In addition to finding the vehicle's residual value on your leasing statement, also known as the vehicle's estimated future value, follow these steps: 

• Calculate the Vehicle's Current Value: Vehicles often lose value during a lease, so utilize resources such as Kelley Blue Book to determine your model's current worth. Depending on how often you have driven your vehicle in Prince Edward County and the surrounding areas, the value might not have changed significantly. For example, if the model has less than 19,000 kilometres on its odometer, the current value could be about the same as the residual value. 
• Make Comparisons: If the current vehicle's value is lower than the residual value, buying the model is probably not the best investment. However, if the current value is higher than the residual value, the purchase is recommended by our finance team. Should you still want the vehicle despite a lower current value, you have room to negotiate. 
• Account for Sales Taxes and Fees: In addition to the local sales tax, find out how much the province tax will be if you purchase your leased vehicle. You'll want to keep buyout-related fees in mind, such as licensing fees, transfer costs, and registration fees. The leasing company passes license, registration, and transfer fees to you. 

Early Lease vs. Lease-End Buyouts: Which is Right for You? 

Now that you know how to calculate a lease buyout, let's review the differences between buying a leased vehicle at the beginning or end of your lease: 

• Early Lease Buyout: Purchasing a leased vehicle at the beginning of your lease does not provide you with much negotiating power. Ending a lease early for any reason, such as too many miles on the vehicle, typically results in fees. 
• Lease-End Buyout: Buying the vehicle at the end of your lease or near the end of your lease increases the chance of a selling price you are happy with. If you can wait until your lease expires to make the purchase, do so. 

Questions About How to Calculate a Car Lease Buyout? 

Do you have any questions about this process for our finance department? Contact our dealership in Kingston today via 613-548-8600 or online. You can also stop by, as we are conveniently located near Ottawa. For more related reads, review your lease return options and our leasing vs. buying guide.