How to Calculate a Lease Buyout

For those New London drivers who have been leasing their vehicle and considering buying it, you might be asking how to calculate a lease buyout. Luckily, you’ve come to the right place.

In the following guide, the Westbrook Honda finance center staff will spotlight how to calculate your car lease buyout. If you have additional questions, contact us online or call 860-399-9300.

Buying Out Your Lease: Is it Worth It?

So, before answering how to calculate your lease buyout, it’s important to understand why you should do this. You might notice the Buyout Amount or Payoff Amount listed in your monthly leasing statement. 

This buyout amount will include the residual value of your vehicle at the lease’s start, your total remaining payments, and possibly a car purchase fee. If you don’t have this value listed on your forms or prefer doing your research, follow these steps for how to calculate your car lease buyout:

1. Determine Your Vehicle’s Residual Value: This information can be found in your lease contract, as it’s calculated at the start of your lease. Such a value is the estimated future vehicle value by the time your lease contract ends. 
2. Determine Your Vehicle’s Actual Value: Your model might have decreased in value from when the lease first began, due to depreciation or the average wear and tear of Branford driving. For those who don’t drive too often, your vehicle might not have depreciated as much as you expect. You can use the Kelley Blue Book trade tool to assess your vehicle’s current market value. 
3. Compare Residual Value vs. Actual Value: If your actual value is higher than the residual value from your lease contract, purchasing the vehicle outright is a great deal. If not, it’s best to try negotiating with the dealer on your purchase price.
4. Take Account of License and Registration Fees: For those who decide to buy a car that you’ve been leasing, this means certain ownership costs are transferred from the leasing company to you. This includes title transfer costs, licensing, and registration fees. 
5. Account For Sales Tax: Review the local sales tax rate when buying out your vehicle in the Middletown area.

Rely on Westbrook Honda for More Automotive Tips

Now that you know how to calculate a lease buyout, turn to Westbrook Honda for additional auto finance tips. Don’t forget to check out the rest of our car-buying tips section to learn about multiple topics. 

Whether it’s refinancing a car loan or debating used vs. certified pre-owned models, we have the expertise and knowledge to help you. For the best car dealership in the New London area, turn to Westbrook Honda today!