A happy couple taking their key for their new car from the dealer.

How Does A Lease Buyout Work?

Miranda Crace5-minute read
UPDATED: June 01, 2024


At the end of a car lease, you’ll typically return your leased vehicle to the dealership. However, if you like the car and wish to own it, you may be able to purchase the vehicle through a lease buyout.

There’s a lot to consider before committing to a lease buyout, though, including loan options, costs and the pros and cons of buying out the lease. To assist you with your decision, we’ve broken down the lease buyout process below and provided other information that you may find helpful.

What Is A Lease Buyout?

A lease buyout, or purchase option, is when a dealership allows you the opportunity to buy a leased vehicle at the end of your lease term, as opposed to turning the car back in. Not every lease agreement allows buyouts, but those that do have a certain process to follow before the vehicle is completely yours.

Getting a personal loan has never been easier.

The Rocket LoansSM application process makes borrowing simple.

How To Buy Out A Car Lease

If you decide you want to keep your leased vehicle, follow these steps to complete your buyout.

1. Review Your Lease Agreement

When you first leased your vehicle, you should’ve received a lease agreement or contract stipulating purchase option requirements. This agreement should detail how close to the end of the lease a buyout is permitted – typically 3 months or closer to the end of the lease. Early lease buyout fees or charges may be involved, so make sure to read carefully before contacting your dealership or leasing company.

2. Determine The Buyout Price

Buyout prices on leased vehicles are set at your lease signing and included in your lease agreement. This estimate is the predicted residual value of your vehicle at the end of the lease. If you can’t find the buyout price on your lease contract, reach out to your leasing company for this information.

3. Assess Your Vehicle’s Value

It’s possible your car’s market value is less than the listed buyout price, so it may be worth looking into this. You may be able to use your findings to negotiate your final purchase price as well as your prequalified loan amount if you seek financing.

4. Let Your Leasing Company Know

The auto lease buyout process really begins after you contact your leasing company and indicate your plan to buy the vehicle. From here, you can try to secure financing through the company or request information needed to finance through other lenders.

5. Apply For Financing

You can purchase your leased vehicle with cash if you have enough on hand, but you’ll otherwise need to secure some financing. Your dealership or leasing company may offer financing options, or you can go through a bank, credit union or online lender. Compare your lending options and interest rates before choosing a lender.

6. Follow Through With The Lease Buyout Process

Once you’ve acquired financing and agreed on a fair buyout price with the leasing company, you’ll sign another agreement or contract. Once that’s done and the transaction is complete, the vehicle is yours to own.

Lease Buyout Loan Options

Buying your leased vehicle can be cheaper than buying a new or used car, but it can still cost tens of thousands of dollars. Acquiring a lease buyout loan will depend largely on your credit score and choice of lender, as will your lease buyout loan rates.

Next up are some common buyout loan options to consider when shopping around and comparing deals.

Dealership Or Leasing Company Financing

You may be able to finance your lease buyout through your vehicle’s leasing company or dealership. However, the annual percentage rate (APR) on dealer and lessor financing is often higher than you’ll find elsewhere, so make sure to shop around and compare offers. If you can find a better deal with another lender, it’s possible your dealer or lessor will offer to match it.

Auto Loan

More often than not, you can secure better auto loan rates and terms by going with a financing institution besides your vehicle’s leasing company or dealership. Interest rates and fees may be higher with a lease buyout loan since your leased vehicle is technically a used car.

Personal Loan

A personal loan can be used for many types of purchases and used in place of an auto or lease buyout loan. Personal loans are typically unsecured – unlike a car loan where your vehicle secures the loan as collateral – and your credit score acts as your main qualifier.

Getting a personal loan requires a prequalification process, followed by a full application and approval period. Approval and funding can take 1 – 7 business days. Some lending platforms, including Rocket Loans℠, can offer same-day funding under certain conditions.1

Pros And Cons Of Buying Out A Car Lease

Even if a lease buyout seems like a great deal upfront, there’s a lot to consider before you make that final decision. Here are some benefits and drawbacks to buying out a car lease.


  • Your leased vehicle’s buyout amount may be lower than the current market value for that same car.
  • The dealer may not charge you for wear and tear or exceeding the mileage limit.
  • You won’t have to shop for a new vehicle.


  • You’ll overpay for the vehicle if the purchase price is higher than the vehicle’s market value.
  • Lease buyout loans can come with high interest rates and fees.
  • Wear, tear and mileage could affect the vehicle’s resale value.

It's Time To Achieve More:

Discover a personalized approach to borrowing with Rocket Loans.

When To Buy Out Your Car Lease

In the end, whether to buy out your auto lease is entirely your choice. Ask yourself these questions when making your decision:

  • Do I like the vehicle I’ve leased, and do I want to continue driving it?
  • Would I be getting a great deal with the vehicle’s residual value?
  • Would I owe significant fees on wear, tear and mileage if I returned the vehicle to the dealer?
  • Can I afford the monthly payments on a lease buyout loan?

If you can answer “yes” to most or all of these questions, a lease buyout may be the right option for you. Otherwise, your best option may be to turn the vehicle back in to the dealership or leasing company, pay any fees and charges you owe and begin looking for your next vehicle.

Final Thoughts

A lease buyout can be a great opportunity to purchase a vehicle at a good price, especially if you really like your leased car or vehicle. Consider the benefits of buying out your lease before you begin the process, and compare financing options to ensure you land the best deal possible. If a lease buyout is your best option, you could soon own your vehicle at a reasonable cost.

Considering lease buyout loan options? Start a personal loan application today with Rocket Loans to see rates and terms.

1Same day funding is available for clients completing the loan process and signing the Promissory Note by 1:00 p.m. ET on a business day. Also note, the ACH credit will be submitted to your bank the same business day. This may result in same day funding, but results may vary, and your bank may have rules that limit our ability to credit your account. We are not responsible for delays that may occur due to an incorrect routing number, an incorrect account number or errors of your financial institution.

Getting a personal loan has never been easier.

The Rocket LoansSM application process makes borrowing simple.

Miranda Crace

Miranda Crace is a Senior Section Editor for the Rocket Companies, bringing a wealth of knowledge about mortgages, personal finance, real estate, and personal loans for over 10 years.