Lease Buyout Calculator

The Lease Buyout Calculator helps you answer one question at the end of a car lease: should you buy the car, or hand it back? It adds up your true out-the-door buyout cost — the residual (buyout) price, the purchase-option fee, and sales tax — then compares that total to the car's current market value. The result shows your instant equity, a clear Great-Buy-to-Overpriced verdict, your break-even market value, and, if you plan to borrow, the monthly payment on a buyout loan.

What is a Lease Buyout?

A lease buyout is the option to purchase the vehicle you have been leasing instead of returning it. Your lease contract sets a fixed residual value — the pre-agreed price to buy the car at lease end. If that residual is lower than what the car is actually worth on the open market, buying it can hand you thousands of dollars in instant equity. If it is higher, returning the car is usually the smarter move. This calculator focuses on the lease-end buyout (buying at the natural end of the lease), which is the most common and most favourable time to buy.

Lease Buyout Formula

Working out whether a buyout is worth it takes two short steps: total your all-in cost, then compare it to market value.

A positive equity figure means the car is worth more than you would pay, so buying it puts money in your pocket. A negative figure means you would overpay. As a quick rule of thumb, a buyout that comes to under about 90% of market value is a great deal, and anything well above 100% is overpriced.

Lease Buyout Decision Guide

Why Compare Buyout Cost to Market Value?

Lease residual values are set at the start of the lease, years before it ends, based on a forecast of what the car will be worth. Real-world markets rarely match that forecast exactly. When used-car prices run hot, your fixed residual can be well below the car's true value — a built-in discount. When prices fall, the residual can end up above market value, meaning the same car is cheaper to buy from a dealer than to buy out of your own lease. Checking the two side by side is the only way to know which situation you are in.

What Affects a Lease Buyout Decision?

How to Use This Calculator

1. Enter your buyout price: Use the residual (buyout) amount from your lease contract, and add the purchase-option fee and your local sales tax rate.
2. Enter the market value: Look up your car's current value in a pricing guide such as Kelley Blue Book or Edmunds, using the retail or private-party figure.
3. Add financing (optional): If you plan to take out a loan, enter a down payment, APR, and term to see the estimated monthly payment.
4. Review the verdict: See your total buyout cost, instant equity, the gauge verdict, and break-even market value, then decide whether to buy or return the car.

Frequently Asked Questions

What is a lease buyout?

A lease buyout is when you purchase the vehicle you have been leasing instead of returning it. At lease end you pay the residual (buyout) price set in your contract, plus a purchase-option fee and any sales tax, to own the car outright.

How do I know if a lease buyout is worth it?

Compare your total buyout cost to the car's current market value. If the buyout costs less than the car is worth, buying gives you instant equity and is usually a good deal. If it costs more than market value, you are overpaying and it is often smarter to return the car or negotiate.

How is the total buyout cost calculated?

Total buyout cost equals the residual (buyout) price plus the purchase-option fee plus sales tax. In most U.S. states the sales tax is charged on the buyout price, so the formula is: Buyout Cost = Buyout Price + Purchase Fee + (Buyout Price × Tax Rate).

Do I pay sales tax on a lease buyout?

In most U.S. states yes, you pay sales tax on the buyout (residual) price when you purchase the vehicle. The exact rate depends on your state and county. A few states handle lease taxes differently, so check your local rules and set the tax rate accordingly.

What is a good buyout price compared to market value?

A buyout that comes to under about 90 percent of the car's market value is a great deal with real equity. Around 98 to 103 percent of market value is a fair, neutral price. Much above market value means you are overpaying and should negotiate or walk away.

Can I finance a lease buyout?

Yes. Many banks and credit unions offer lease-buyout loans. You can put money down and finance the rest over a term of your choice. This calculator estimates the monthly payment when you enter a down payment, APR, and loan term.

Additional Resources

• Lease - Wikipedia
• Residual Value - Wikipedia