A lease buyout occurs when the leasing company allows you to purchase the vehicle you're leasing before or at the end of your lease contract. If your lease agreement contains a buyout option, you can purchase the car based on its residual value rather than returning the vehicle to the auto lender and signing a new lease. The residual value of the vehicle is the estimated value of the car at the end of the lease term. The residual value determines your monthly payments throughout the lease and will also affect your lease buyout price.
Have you come to the end of your leasing period and are wondering what your next step in purchasing or leasing an automobile should be? At New Road Auto Loans, we can help you get the loan you need quickly and learn about the benefits of a lease buyout for your vehicle.
To perform a lease car buyout, you should approach the dealership that issued your current lease contract. Ideally, you should contact the dealer before your lease expiration to give you time to secure the financing to buy out the lease. They can provide the buyout price of the vehicle based on the lease payments you have made to date, the time remaining in your loan term and other factors.
Once you're given a price by your dealership, you can consider the various lease buyout options, such as paying upfront in cash versus securing a loan. For most people, a lease buyout auto loan is necessary to cover the cost of the car. If your auto lender has loan offers for new and used vehicles, it likely has a lease buyout loan option as well.
Buying out your leased car makes sense in some circumstances but isn't always the right decision. For example, many leases have a maximum mileage you're permitted to drive during the agreement term and putting excess mileage on the car may incur financial mileage penalties. Thus, if you love the car and have put significant mileage on it, buying out the vehicle may help you avoid those mileage penalties.
You can consider an auto lease buyout when:
Only get an auto lease buyout loan if you can afford to make a monthly payment based on the purchase price and interest rate on the auto loan.
There are specific documents required to apply for the loan you need for lease buyouts. The documentation you'll need to present is the same as for many other types of loans. The lender typically requires proof of identity, such as your passport or driver's license, verification of income and employment, proof of your legal address and will pull your credit score.
All of this information helps the lender determine the level of risk involved in approving your loan. It wants to see that you're in a financial position to make your payments on time and that you have a proven record of doing so.
At New Roads Auto Loans, you can apply and get an approval decision in seconds. We have a quick and simple online loan application process. The form can take less than a minute to complete. There are no hidden application fees, and we offer a preapproval decision in under a minute.
If you're considering a lease buyout auto loan, approach our team at New Roads Auto Loans. We offer loans with zero down payments and no application fees. With our "direct loan to you" model, you're in control of the buying process. Contact us today to get started.
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