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How a lease buyout is priced
At the end of the lease the buyout price is the residual on your contract plus a purchase option fee, and sales tax in most states. Before the end, it is roughly the remaining payments plus the residual, minus unearned rent charge; your leasing company quotes the exact payoff.
A worked example
An end-of-lease buyout with a $23,200 residual, a $350 purchase option fee and 6% tax on the residual:
- Buyout before tax: $23,550
- Tax: $1,392
- Total: $24,942, or $493.88 a month financed at 7% for 60 months
When buying your lease makes sense
If the car is worth more than the buyout, buying it (or selling it to a dealer) captures that equity. Check what dealers would pay before you decide, and avoid mileage and wear charges if you are over.