When your lease period comes to an end, you may need to decide whether to return the car or proceed to make a lease buyout. Whatever decision you make, you need to consider your budget, your expectations from the car and its price. If you’re considering a BMW car lease buyout, you have to do some thinking and calculations, before making your decision.
Depending on your contract, you may be able to buy your leased car for the buyout price (if stated in the contract) at the end or before the contract ends. Read on to find out how a lease buyout works.
How A Lease Buyout Works
Doing some research and punching your calculator will help you make a more informed decision. If a buyout option was part of your lease agreement, you have the option to buy your leased vehicle at the end of your lease.
Alternatively, you can return the car to your dealership. If you opt for a lease buyout when your lease duration is over, the price will be based on the car’s residual value. This is the amount fixed at the time the contract was signed.
It is usually based on the predicted value of the vehicle at the end of the lease. This amount may also be called the purchase option price or buyout amount.
When you reach the end of the lease, you can decide whether to take an available buyout option or return the car. If you settle for the buyout option, you’ll pay the set amount plus any additional fees.
How To Finance A Lease Buyout
Choosing a lease buyout option could be expensive. When you get the option to buy a leased car, the vehicle is most times just a few years old and its residual value, quite high.
While you can pay the lease buyout amount with cash, there are financing options you can settle for. You can apply for a BMW Financing Buyout loan to finance the transaction.
Some lenders that offer auto loans for used or new vehicles also give out loans you can use to buy out a car lease. Additionally, the dealership may be able to arrange financing for you. But, make sure to compare different shops for the best rates and terms.
What To Consider Before Buying Out Your Car Lease
An early lease buyout is a great financial decision, if the car’s market value is good enough. When deciding whether to buy out your lease, there are some factors you need to consider to determine if it’s a sound financial move. They include:
- Whether you’ll have to pay excess mileage charges
- The value of the car in its current condition
- Whether you’ll have to pay for damage and repairs
- The mechanical history of the vehicle
- Whether you can line up financing and afford the monthly payments
Summary
After basic calculations, you’ll find out that an early BMW car lease is the best option for you. However, don’t forget to compare the price of buying a used car to your lease buyout price to see which is the better deal.
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