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Negotiating A Car Lease Buyout or Exit

Negotiating A Car Lease Buyout or Exit

Most dealerships aren't too keen to share it, but the terms of your lease are often up for negotiation. If you take the time to research the vehicle you intend to drive, you can often haggle for much better monthly payments, lower fees, and better mileage restrictions. But what about the price to buy out the car completely? Your car lease buyout amount is one of the most important parts of your lease and can be the deciding factor in taking full ownership of your vehicle.

What is a Car Lease Buyout?

What is a Car Lease Buyout?

A car lease buyout is the price set by the dealership that allows you to purchase your vehicle during or after the expiration of your lease terms. The number a buyout is set at is usually defined by its residual value. A vehicle's residual value is the amount the car will be worth once your lease is over, which is determined by several factors:

Previous Sales For That Specific Make And Model: Previous sales usually help define a car's value and are generally separated by make and model.

The Current Demand For That Vehicle: If your specific model happens to be in high demand for whatever reason, that will increase the residual value.

The Current Conditions Of the Vehicle Market: If the new and used car market is elevated due to external factors like supply chain disruptions, that can increase the final value of the vehicle.

The Age Of the Car: A car's age can be an indicator of the condition a vehicle is in, and therefore has a significant effect on its residual value.

The Mileage of the Car: While age can help you determine the level of maintenance a car has received, its mileage can be an even more important factor. Older cars that have low mileage can often be in good condition, but higher mileage cars have almost always been the victim of significant wear and tear.

The Current Vehicle Condition: Whether a car is in Excellent, Good, Fair, or Poor condition can drastically affect its residual value.

The Car's Color: Some car colors, like silver, white, and black, often resell easier and at a higher price.

The Car's Brand: More reputable car brands hold their value longer and are easier to resell than lesser-known brands.

Once your residual value is determined, dealerships will factor in fees like a car purchase fee and any remaining payments you have to make on the lease. All these numbers will combine to give you your car lease buyout amount, which you can use to take full ownership of your vehicle. You can use GoodCar's residual value calculator to determine your car's value in advance.

How Does a Lease Buyout Work?

How Does a Lease Buyout Work?

After your lease buyout amount has been determined, a lease buyout works by talking with your dealership and negotiating payment. If your lease is still active, and you have time left in your terms, you'll likely have to compensate the dealership for the remaining monthly payments. This, in addition to the buyout amount, can make the cost rather exorbitant, which leads many to lease a vehicle to take out a loan. Lease buyout loans are usually offered by banks or other lenders and, depending on your terms, can be a very cost-effective way to take ownership of a leased car.

If the buyout amount is too high, you can also just turn the leased car in. You'll pay any small fees left over and be done; this does mean you'll be without a car, so you'll either need to start a new lease, find a new or used vehicle, or get another means of transportation. You can also trade in your lease for another vehicle if the lender offers that option; this may involve some trade-in fees, and if there is time left on your lease, you may also need to cover all remaining monthly payments.

What Should I Do During a Car Lease Buyout Negotiation?

Unfortunately, most car lease buyout numbers cannot be negotiated. This is especially true at the end of a lease after all the paperwork has been signed and you've reached the conclusion of your terms. The only chance you have to negotiate your buyout would be at the beginning of your lease before your terms have been finalized.

Your dealership or leasing company will estimate the vehicle's residual value and put a number up for the buyout cost; this is rarely subject to change, and unless you go through a bank or credit union, that number isn't likely to budge. The only thing you can do is reject the terms completely and shop around, looking at other dealerships to see if they offer better buyout prices on that same vehicle. Overall, negotiating a car lease buyout is difficult or, in many cases, impossible. Lenders have little reason to lower a buyout price due to high vehicle demand and low profitability. If the vehicle has a set residual value, offering a lower buyout amount would only cost them money.

6 Ways to Get Out of a Car Lease Early

Way #1: Buyout the Lease

One option you can consider to get out of a lease early is to attempt a lease buyout: this involves purchasing the vehicle and reselling it to another dealership or private party. Most dealerships will discuss lease buyout options during initial term negotiations, with some only offering a buyout once you have reached the end of your contract. This isn't always an immutable clause in your contract, though, and you may be able to discuss a mid-lease buyout later if you find yourself growing tired of your car. We recommend you check the current market price of your vehicle through our Vehicle History Report and compare it to the amount you still owe on the lease plus the buyout price. This will tell you how much you may lose or sometimes even gain from an early buyout.


  • With this method, it's possible you end up making money instead of losing it.
  • Terms usually exist within the contract to facilitate this process, making it easier.


  • Effort is required to sell the car; if you are looking for a quick way to get out of a car lease, this may not be the option for you. While unlikely, it's possible that you can't find a viable buyer for the car. If you are operating within a certain time frame, keeping the car on the market may test your patience.

Way #2: Transfer the Lease

Another way to get out of a car lease you can't afford is to attempt a lease transfer. This involves moving ownership of the lease to another party, who then takes over responsibility for the vehicle and associated payments. Not all lenders will approve a lease transfer, so you'll need to discuss what circumstances have led to your current situation. Read through your lease agreement carefully to find any sections relating directly to transfers and see if you qualify. If you read the agreement but still aren't sure, contact your lender and discuss your options with them.


  • Transferring a lease can be significantly cheaper than paying an early termination fee.
  • Usually, this is a much faster option than buying the lease out and selling the vehicle.


  • It's possible that a lease transfer isn't viable through your lender.
  • While not always the case, some contracts include a clause requiring the payment of a transfer fee, increasing the cost of getting out of your car lease.

Way #3: Negotiate With Dealership

Sometimes, the best way to get out of a car lease is to simply go talk with the dealership (or whatever entity you are leasing the vehicle through.) Talk with them about the issues you are having and see if you can come to a reasonable solution that works for all parties. It's possible you may be able to find a way to get out of the lease; if not, you can discuss whether they would be willing to lower your monthly payments or, even better, suspend them temporarily until your financial situation improves. While more manageable payments won't release you from your contract, it will relieve the stress a bit and give you time to figure out what to do long-term.


  • If your discussion goes well enough (and you explain your situation thoroughly to an understanding representative), you may get out of the lease at next to no cost.
  • Negotiating can often lead to far more favorable terms; while it can't always get you out of the lease, it may very well lead to much more reasonable payments.


  • Asymmetric information. The dealership always knows more about your car make/model/year demand and market situation. If you can come to this conversation prepared by exploring the goodcar.com tools such as Lease Calculator, Vehicle History Reports, and Residual Values forecast, it could greatly help you in this conversation.
  • If the dealership isn't willing to work with you, this method could result in no change to your current situation
  • It's not always beneficial to let a lender know you are in a difficult financial situation; while some representatives may be sympathetic, others may see it as a red flag that you could be at risk of defaulting on your loan

Way #4: Trade the Leased Car

If the main issue you have is with the vehicle, not the payments, trading the car may be your best course of action. Some dealerships will offer vehicle trade-ins that utilize similar lease terms, allowing you to choose a car that meets your specific needs. It's possible you may have to pay a small fee, but often, this can be rolled into the monthly payments you'll make on the new leased vehicle.


  • This option is great if your main issue isn't so much the payments as it is the vehicle itself. Assembling a list of what you want in a car, especially after driving one you don't like, can lead to a much more satisfying lease experience.
  • It's possible to get a trade credit with this method, which may even result in you gaining money on the transaction (not in your pocket, mind you, this would simply take the cost out of a new lease with the same dealer).


  • You may find yourself disliking your new vehicle, meaning you didn't find the root problem you had with the original lease.
  • If there have been any changes to your credit since your lease began, it's possible you don't qualify for a new lease at all. If you do, you may find yourself making even higher monthly payments than you are currently.

Way #5: Pay the Penalty

It's not the most attractive option, but one way to get out of a car lease is just to pay the early termination fee. Your contract will most likely include a set number for termination that will be paid upon the vehicle's return. Prepare yourself for a significant termination fee and the possibility of added costs due to changes in the vehicle's value. If the car has depreciated in value, you may end up paying more than you would by seeing your lease until the end.


  • This option will be incredibly simple; this scenario is planned for in your lease terms, and your dealership will be able to walk you through the process with ease.
  • If the car has appreciated in value, it's possible you could even make a small amount of money by leaving the lease early.


  • The vast majority of the time, you will end up paying a significant amount for your early termination fee.
  • Unless you have another way to get around, you are left without a means of transportation and less money to find a new one.

Way #6: Default on the Loan

The absolute worst option you can choose to get out of your lease is to default on your loan. Yes, this technically gets you out of your car lease, and one could argue it is the easiest way to do so. While defaulting is low effort initially, it will result in significant consequences later on. A default can destroy your credit score, making it incredibly difficult to rebuild. This will make getting loans near impossible in the future and may even lead to the repossession of personal property.


  • Although it's easy, it's not a great option.


  • Destroys your credit.
  • Will make getting another lease incredibly difficult.
  • Ethically questionable.
  • This could lead to property repossession.
  • Creditors will constantly try to contact you.
  • You won't have a car anymore.

Car Lease Frequently Asked Questions

Is it Smart to Buyout a Leased Car?

Whether it is smart to buyout a leased car depends on several factors:

The Buyout Price: If the buyout price that's been set is higher than your budget allows for, or you just believe the vehicle isn't worth the price after driving it for a couple of years, you may not want to purchase it. If the price seems fair, you have the money, and you enjoy driving the car, then buying out the lease could be your best option.

The Car's Current Market Value: If the car's current market value is lower than the buyout price, it would not be wise to buy the car out. You can try talking to your leasing company about the buyout price if this scenario happens, but again, negotiating a buyout price can be an uphill battle.

The Time Remaining on Your Lease: If there is significant time left on your lease, you will likely have to pay the remainder in full before you can take full ownership of the car. If your lease is close to concluding, a lease buyout could be a wise choice.

The Current Market Conditions: If the car market is elevated, and your terms were set when it wasn't as hot, a lease buyout is a very smart decision. Since this number was set earlier and isn't usually subject to change, the amount you'll have to pay is likely lower than the car's value.

What Should I Do Before Leasing a Car?

Before leasing a new or used car or moving forward with any vehicle purchase, you'll want to do significant research. The best way to do this is by getting a vehicle history report. Be sure to use GoodCar's Car Lease Calculator and Car Loan Calculator before leasing or buying any vehicle. These comprehensive reports can provide you with multiple details about your car, including:

  • Accident history
  • Manufacturing origin
  • Whether it's been stolen or used in a crime
  • List of recalls
  • Vehicle value & residual values.

Can You Negotiate the Residual Value at the End of a Lease?

While it can occasionally be possible to negotiate a residual value at the end of your lease terms, most residual values are predetermined by lenders and dealers. Certain market factors or changes in the vehicle’s demand may make negotiations a higher likelihood, but it usually isn't something you want to bet on. Make sure to check what residual value a dealership sets at the beginning of your lease terms, and prepare to pay the buyout amount in full if you decide you want to keep the vehicle for good.

How is Lease Buyout Amount Calculated?

Your lease buyout amount is usually calculated by combining the residual value of the car at the beginning of your lease with the total remaining payments and any associated fees. Your buyout amount will be listed on your lease terms and usually with your monthly statement. Other factors can affect the lease buyout amount, like the car's condition, the current vehicle market, and what the demand is for that particular make, model, and year.

Can You Get Out of a Car Lease Without a Penalty?

Buying out your car lease or trading in your vehicle are two ways to get out of car lease without a penalty. Discuss with your dealership what your options are for a fee-free lease exit; otherwise, be prepared to pay your pre-agreed upon early termination fee.

Does a Lease Buyout Hurt Credit?

As long as you make your payments on time and do not default on your lease, a lease buyout should have no effect on your credit. You may need to take out a loan to get the funds required to buy out your lease; this can have a negative impact on your credit if you fail to pay the loan in full. Make sure to make all payments regularly and completely to ensure your credit score remains high.

How Can I Get Out of My Car Lease Without Ruining My Credit?

The main way that getting out of a car lease can affect your credit is by defaulting. As long as you discuss a legitimate lease exit with your dealership and follow a set procedure, your credit should remain unharmed. If you cease payments, however, your credit score will almost certainly significantly drop.

Is it Better to Buyout a Lease Early?

Usually, it isn't better to buy out a lease early due to the agreement made within your lease terms. Many dealerships or lenders require compensation for any remaining monthly payments in full, which can make an early lease buyout unnecessarily expensive. Unless you have a significant surplus in your budget, it's generally better to finish out your terms and make reasonable monthly payments.

Can You Get Out of a Car Lease Without a Penalty?

Buying out your car lease or trading in your vehicle are two ways to get out of car lease without a penalty. Discuss with your dealership what your options are for a fee-free lease exit; otherwise, be prepared to pay your pre-agreed upon early termination fee. 

Where Can I Research A Vehicle I Want to Lease?

The best way to negotiate better lease terms is to do extensive research on any vehicle you are considering for lease. Vehicle history reports are an efficient and comprehensive method of finding this information; these reports can provide you with essential details about a car you want to lease, including:

  • Title Records
  • Junk/Salvage Records
  • Insurer "Total Loss" Records
  • Pricing
  • Sales History
  • Problem Checks
  • Auto Specs
  • Location History
  • NHTSA Crash Test Ratings
  • NHTSA Recalls
  • Awards and Accolades
  • Manufacturer Information

For even more information, you can use invaluable tools like GoodCar Lease Calculator and GoodCar Loan calculators. GoodCar provides the best lease calculator and loan calculator on the market, allowing you to figure out your monthly payments before your lease terms are finalized. That way, you can ensure you are getting the most financially sound plan possible and staying within your budget.