Your lease is ending. You love your car. So, why’s nobody telling you that keeping it might be the smartest money move you make this year?
Because it is. In fact, in 2024 alone, 14,235 drivers who bought out their leases saved an average of $5,328 each. That’s real money back in real pockets.
So, back to that first question: Why don’t more people do it?
Well, because most drivers don’t realize buying out a lease is easier than it looks—and right now, the math is working in your favor.
If you’re wondering whether it’s the right move for you, this guide will walk you through exactly when a lease buyout makes sense, how to find the best loan rates, and the steps to get it done without overpaying.
1. When Lease Buyout Financing Actually Makes Sense
Here’s your main money question: Is your car worth more than what you’d pay to keep it?
To find the answer, check your lease agreement for the residual value—that’s your car lease buyout price. Then, look up your car’s current market value on Kelley Blue Book.
For instance, if you’re driving a Honda Accord that’s worth $8,730 more than your buyout price, you’ve got what’s called equity. And equity is your leverage.
Then there’s another angle.
Say you’ve racked up 40,000 miles on a lease that only covered 36,000. At $0.25 per mile, you’re staring down a $1,000 overage fee when you return the car.
Buying out wipes that fee clean off the table. One driver with a Range Rover Velar avoided $800 to $2,400 in mileage penalties by financing a buyout instead of returning the keys.
The last thing you need to know is that the average lease-end mileage climbed to 37,000 miles in 2024, up 3,000 from the year before. People are simply driving more.
If that sounds like you, a buyout loan might save you thousands in penalties you didn’t budget for.
2. How to Shop for the Best Lease Buyout Loan Rates
Shopping around for the best financing options means knowing how to budget effectively for your vehicle purchase. This approach is similar to what savvy travelers do when managing their travel budgets.
The main thing for you to know here is that your leasing company will offer you financing.
Our advice? Don’t take it without shopping around first.
Credit unions consistently beat big banks on lease buyout rates, and in 2025, you’re looking at rates between 5.5% and 10.5%, depending on your credit score and loan term.
Pro tip: And don’t skip asking about prepayment penalties. Some lenders charge fees if you pay off the loan early. Others don’t. That matters if you plan to refinance or pay extra toward principal.
3. The Step-by-Step Lease Buyout Financing Process
First, call your leasing company and get your exact buyout amount in writing. This isn’t just the residual value—it includes any purchase option fees, documentation charges, and taxes.
Second, apply for loans. Most online lenders give you a decision in minutes without a hard credit pull during prequalification. You’ll need your car’s VIN, proof of income, and your lease contract handy.
Third, compare offers by total cost, not just monthly payment. A 72-month loan at 6% might look affordable at $310 per month, but you’ll pay more in interest than a 60-month loan at 5.5%. Run the numbers.
Fourth, finalize your loan and complete the paperwork. If you’re working with an online lender or credit union, the process typically takes 7 to 14 business days. After that, your lender pays off the lease directly, and you start making loan payments. The title transfer can take another 6 to 8 weeks depending on your state.
4. 3 Smart Moves That Save You Money on Lease Buyout Loans
Put cash down if you can. Even $1,000 or $2,000 upfront shrinks your loan amount and cuts your interest payments over time. You keep more money in your pocket long-term.
Also, choose the shortest loan term you can afford.
Yes, stretching to 84 months drops your monthly payment, but it also increases your total interest cost. A 48-month loan at a slightly higher monthly payment often beats a 72-month loan when you look at what you pay overall.
Finally, negotiate. If your car’s market value dropped below the residual—common with EVs right now—some leasing companies will negotiate the buyout price down rather than take the car back and lose money at auction.
It doesn’t always work, but it costs nothing to ask.
Conclusion
Now that you’ve read this article, we bet that financing that buyout might be the easiest car decision you make this year.
Now, go shop around, compare the real numbers, and don’t let anyone rush you into a bad rate.
The New Jersey Digest is a new jersey magazine that has chronicled daily life in the Garden State for over 10 years.