What Is a Lease Buyout?

Leasing a car has plenty of advantages over buying a vehicle outright. There’s typically a lower down payment, and many times the monthly payments are lower too. Leasing also allows you to get a new car without committing to owning it for years and years. This can be helpful if you’re trying out a new bodystyle, like switching from a sedan to an SUV or vice versa, and you aren’t 100% sure that you’ll want to stick with that decision for the long run. Once your lease’s term is up, you can simply turn the vehicle back in and buy or lease a new one.

However, sometimes you end up falling in love with your leased vehicle and want to stick with it instead of trading it back in. In that case, don’t worry. You can opt for a lease buyout. All of the money that you’ve already put toward monthly payments will apply toward the cost of buying out the vehicle, and you’ll be able to pay the rest in cash or take out an auto loan, just like you would with a new purchase. Here at Mazda of Columbia, we know that everyone’s circumstances and preferences can change over time, and we want to provide you with a wide variety of options so that you never have to settle for anything less than a deal that’s perfect for your current needs.

What Is a Lease Buyout?

A lease buyout, also known as a purchase option, is when a dealership allows you to “buy out” the vehicle. Usually, the option to buyout your vehicle is included in the terms of your lease, so you’ll know from the get-go that you have the option to buy your vehicle instead of returning it to us and switching to something new. There are two different types of buyout options if you really love your Mazda and want to stick with your particular model beyond the end of your lease. A lease-end buyout takes place at the end of the lease’s term, and an early lease buyout takes place before your initial lease has come to an end.

Even after the payments you’ve made over the months of your lease are subtracted from the vehicle’s cost, you still might end up with a price that’s too big for you to pay out of pocket. That’s perfectly fine; our finance department can work with you to seamlessly transition from monthly lease payments to monthly payments on an auto loan. The amount you pay per month may change, depending on the terms of the agreement, but the main difference will be that now you’re paying off the cost of the car with the intention of owning it outright at the end of the loan. You also will no longer have mileage limits or other requirements that were there under your lease: the vehicle will be yours to do with what you choose.

Lease-End Buyout

With a lease-end buyout, you will have to pay the residual value of the vehicle––what it is worth at the end of the lease period. This is a number that’s agreed upon before a lease agreement is signed, so you won’t be taken by surprise when you go to buyout your lease. However, note that since you’ve already agreed to a residual value when you signed the lease, this figure tends to be less negotiable than a sticker price on a new vehicle. A lease-end buyout is a good option if:

• You’re happy with the vehicle
• There’s no other vehicle at a similar price point that you’d like better
• You can get a good interest rate to finance the buyout price

Early Lease Buyout

In some circumstances, you can also purchase your leased Mazda before the end of your contract. You’ll need to look over your contract to make sure that this is an option, as not all lease deals allow an early lease buyout. If you know that you’ll have the option to buy your lease out at the end of the term, then it might not make sense to consider an early lease buyout. But there are a few circumstances where it’s worth looking into.

If you suddenly get a new job with a longer commute or decide to take a cross-country road trip, then the mileage caps on your lease agreement might no longer work for you. In that case, it can make sense to buy the car out before you put the extra mileage on it so you don’t risk having to pay fees for breaking the terms of your lease agreement. On the other hand, maybe you’ve just decided that you really love this car and want to start working toward owning it outright as soon as possible. Whatever your reasons, you can always talk to the experts in our finance department, and we can help you figure out a new arrangement that works for you.

Alternatives to Lease Buyouts

Buying out a lease isn’t for everyone. For one thing, many people decided to lease their vehicle in the first place because they prefer leasing. When your lease term ends, you always have the option to simply turn the car in and lease another vehicle. Whether you like to switch things up with a different model every few years or want to upgrade to the newest version of the same model to benefit from new features, leasing can be a great choice. You’ll never have to worry about the type of maintenance that older vehicles need, and you’ll always be up-to-date with the latest features.

You can also turn your leased vehicle in and switch to a loan on a new or used vehicle. This is a great choice if you’ve decided that you love your current model but want to get a new feature that’s come out since you started your lease or if you’ve decided that you want to upsize or downsize to a model that’s a better fit for your lifestyle. It’s best to decide what you want to do at the end of your lease agreement ahead of time so that you can research your options and feel confident in your choice by the time the end of the leasing period rolls around. Luckily, you can easily reach out to our finance department over the phone in order to discuss your options and work out a great plan well in advance.

We’re Here for You!

Whether you decide to buy your lease out, switch to a new lease, or change to an entirely different financing arrangement on a new or used car, the team here at Mazda of Columbia is happy to help. Our commitment to you doesn’t end once you’ve signed that initial lease agreement: we want to make sure that you continue to be satisfied with both your vehicle and your financing in the long run. That means we’re happy to help work with you to craft an agreement that works for your budget and driving habits.

While we’ve tried to cover a wide range of circumstances in this guide, we know that real life is complicated. If you have any questions about your unique situation, don’t hesitate to reach out to us. We are here for you, and we’re ready to go the extra mile to provide you with the highest possible level of customer service. No matter where your automotive journey takes you next, we want to be a part of the ride and make sure your experience is as smooth and stress-free as possible.