Prices for new and used cars have gone up. The buyout price for your car has already been fixed in your lease agreement so you could find yourself on the right side of a great deal. Read on to find out more about buying out a car lease.
Your Lease Buyout Price is Pre-Calculated
Back when you signed your lease, your leasing company calculated the price you would need to pay if you chose to buy the car from them. Lucky for you, the company can't change the price even if your car's current market value is much higher than the original estimate.
Here's what you need to know about the buyout price:
Car Prices Have Risen Recently
With the rise in technology, cars are now made with multiple microchips. But during the COVID-19 pandemic, many of these microchips were diverted to produce TVs and other popular in-home devices.
The shortage of microchips and general problems in the global supply chain led to rising prices for both new and used cars, so typical depreciation trends might not hold true.
Here's how to see if you've come out on top of your lease:
Look in your lease agreement for the car's residual value.
Search online or in your favorite auto magazine for cars that are the same make, model, and year as yours, or else very similar.
Compare the prices – if the current market value is higher, now could be a great time for buying out a car lease.
Be sure to include any fees and taxes in your calculations.
A Lease Buyout Right Now Offers Great Value
Cars on the open market might cost more than usual at the moment, but the price of your leased car is fixed in the agreement you have with your leasing company. This means that buying out your lease is the best way for you to secure a great deal.
Advantages of buying out your lease may include:
You'll likely pay less than if you bought the same car from a dealer or private seller in the current market.
You'll have a car you're already familiar with rather than starting over with a different vehicle, which may have hidden faults.
You won't have to worry about paying penalties related to mileage limits and general wear and tear on your own car.
You Can Buy-Out a Car Lease With an Auto Loan
Taking out a low-interest auto loan through your local credit union is a convenient way to finance your lease buyout. Whether it's your first ever auto loan or you've had one in the past, you'll find the process is simple and quick.
Advantages of financing your buyout with an auto loan include:
You can get a loan to cover all or part of the purchase price, depending on how much down payment you have.
Your car might be worth more than the amount you need to borrow, so you'll have positive equity.
Depending on the term you choose, your monthly loan payment could be similar to your lease payment so budgeting will be easy.
Eventually, you'll own your car outright with no more monthly payments!
Next Steps: Apply for an Auto Loan
If you've run the numbers and decided it makes sense to buy out your car lease, it's time to follow up on the financing. Be sure to shop around different lenders and find an auto loan that offers competitive rates and a term that suits your budget.
Once you've decided on your lender, the next steps are simple. Click below to find out exactly what to do when buying out a car lease.
How to Buy Out a Car Lease With an Auto Loan [Guide]