Businesswomen Shaking Hands In Conference Room Royalty Free Image 1667569619

Can You Negotiate a Car Lease Buyout?

Leasing a car is a great way to get into a brand new model every few years. If you fall in love with your lease, you can decide to buy the car at the end of the lease period.

But if you’re getting ready to buy your vehicle at the end of your lease, know that there’s probably little room for negotiation. Negotiating a car lease buyout is often much more difficult than negotiating the cost of a new or used vehicle.

However, that doesn’t mean it’s impossible to get a better deal with a lease. In this article, we’ll share some strategies to help you potentially negotiate a car lease buyout with your lender.

Can you negotiate the price of a lease?

You can negotiate the price of a lease, but it’s not easy. At the beginning of your lease agreement, the lender has already calculated the residual value of the car (the value after the lease ends), and that amount usually never changes.

Car salesmen are leasing experts and they know exactly how much a particular make and model is worth after it comes off the lease. If they negotiate the price too much, they don’t make any money.

In addition, the auto industry is still recovering from the global shortage of semiconductor chips that led to low inventory levels for new cars, high demand for used vehicles and severely inflated sticker prices.

Therefore, it really isn’t in the merchant’s best interest to accept a lower buyout fee. If you can get a lower price, don’t expect to shave a lot of money off the residual value.

When can you buy out a lease?

There are two times when you can buy out a car lease: At the end of the lease and while the lease is still active. Each option has its advantages and disadvantages. Here’s what you need to know about buying out your lease early versus at the end of the lease term.

End-of-lease buyout

A typical car lease with a buyout option occurs at the end of the lease term. If you want to buy the car, you pay the residual value, which is determined at the beginning of your lease.

You can either buy the car outright for the residual value or finance that amount with a loan. If the car market has changed significantly since your lease began, the dealer may be more willing to negotiate the purchase price at the end of the lease.

Early Lease Buyout

If you decide that you absolutely love your leased car and you want to buy it before your termination date, consider an early buyout. This option has some advantages. You no longer have to make rental payments and you won’t be held to mileage limits.

However, buying out a lease early can be expensive. You usually have to pay the remaining balance of your rent payments, plus penalty fees for breaking the lease early.

How to negotiate a rental car buyout

As your lease termination date approaches, you will need to decide what you want to do with the vehicle. If you want to buy out of your contract instead of leasing or buying another car, you’ll want to start the negotiation process before the term ends. Here are some tips for negotiating your rental car buyout.

Do your research

If you want to negotiate a car lease buyout, you need to do your research. First, you should review your contract to see if it is even possible to make an agreement with your lender or dealer, as not all financial institutions write a car lease that includes a negotiation option.

If your contract does allow negotiation, check your vehicle’s current market value. Then compare that figure with your hire purchase price. If the car’s market value is less than the salvage value, it is probably worth negotiating a better purchase price with the dealer.

Compare competitor offers

When you rent a car, you don’t have to return it to the dealer where you got it. If you want to negotiate a car rental buyout, it’s a good idea to get several offers from different dealers in the area.

Knowing how much the competition is willing to pay can give you leverage when negotiating with your rental company.

Contact Your Leasing Bank

You can always start by negotiating a car lease buyout with your dealer. However, if you have secured financing through another company, that lender may not be the sole determiner of the hire purchase price.

If this is the case, contact your lending company directly to see if they are willing to work with you.

Get pre-approved for a car loan

Having a pre-approval letter from a car lender is another way to potentially entice the lease provider to give you a better deal.

Knowing that you have cash available to complete the lease quickly and seamlessly is an advantage for your leasing company.

Make an offer

Once you have done your research and a pre-approval letter for your car loan, it’s time to approach the subject of negotiations with your leasing agent. If you have a strong case for why the finance manager should lower the buyout price, you can get closer to the price you hope to pay.

Don’t forget to contact the lender well in advance of your vehicle’s lease return date. When the dealer can count on a sale, they may be more willing to work with you on price.

Related Posts