A lease buyout calculator compares the price your lease lets you buy the car for, plus fees and tax, with what the car is worth on the market today. Formula: Cost to buy = residual + fees and tax; equity = market value − cost to buy. With an $18,000 residual, $900 of fees and tax, and a $21,000 market value, the buyout costs $18,900 and leaves $2,100 of equity.
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How to use the lease buyout calculator
- Enter the residual or purchase-option price from your lease, or the payoff quote from the leasing company.
- Enter buyout fees and sales tax: purchase-option fee, title, registration and tax.
- Enter what the car is worth today. Use several real offers or listings for the same model, mileage and condition.
The lease buyout calculator shows the cost to buy, the market value and the equity. A negative number means you would pay more than the car is worth.
What formula does the lease buyout calculator use?
Cost to buy = residual + fees and tax. Equity = market value − cost to buy. That is all. The math is easy; the hard part is getting accurate numbers for each input.
The CFPB explains that the residual value is the estimated value of the car at the end of the lease and is what you will pay if your lease includes a purchase option. Federal lease disclosures must also state whether you have a purchase option and the price.
Lease buyout calculator worked example
Results from the lease buyout calculator:
| Lease | Cost to buy | Market value | Equity |
|---|---|---|---|
| $18,000 residual, $900 fees | $18,900 | $21,000 | $2,100 |
| $15,200 residual, $800 fees | $16,000 | $19,500 | $3,500 |
| $24,500 residual, $1,400 fees | $25,900 | $23,000 | −$2,900 |
The first two cars are worth more than the buyout, so buying keeps that equity. The third is worth less, so turning it in may make more sense, after you count any wear-and-tear and excess-mileage charges you would owe at return.
When a lease buyout makes sense
A buyout tends to work when the car is in good shape, you know its history, and the equity is positive. It can also make sense if you are well over your mileage limit, because buying the car usually avoids the per-mile charge you would pay on return. The CFPB notes that most leases limit you to 10,000 to 15,000 miles a year.
It tends not to work when the car is worth less than the buyout and you have no mileage or damage charges. In that case you can return it and shop for something else. Rerun the lease buyout calculator if your quote changes.
Paying for the buyout
If you need a loan to buy the car, add the interest to your cost. Our auto loan calculator shows the payment. Ask the leasing company for an itemized payoff in writing. Get a loan quote before you go to sign, so you can compare it with any financing offered at the dealership. If you are only partway through the lease, an early buyout normally includes the remaining payments, so the cost to buy is higher than the residual alone.
Common mistakes to avoid
A common mistake is using the price a dealer would ask for the car as its value, when what matters is what you could actually get or what an equal car would cost you. Another is leaving sales tax out of the fees. Your state may charge sales tax on the purchase, which can add hundreds or thousands of dollars. A third is skipping an inspection: if the car needs tires, brakes or other work soon, subtract that cost from the market value before you use the lease buyout calculator.
Finally, check the deadline. Many leases set a window for exercising the purchase option, and the terms can change if you miss it.
Estimates for education only, not tax, legal or financial advice. Check current rules with the tax authority or a qualified adviser.
Related converters and calculators
Related calculators:
- Auto lease calculator: lease payment
- Auto loan calculator: finance the buyout
- Depreciation calculator: value over time
Sources
CFPB: What should I know about leasing versus buying a car?.
Questions about this calculator
What is a lease buyout?
Buying your leased car, at the end of the lease or early, for the purchase price set in the lease plus fees and tax.
Is the residual value the buyout price?
At lease end it is usually the purchase price. Early buyouts often add remaining payments and fees.
How do I know if a lease buyout is a good deal?
Compare the total cost to buy with the car's market value. Positive equity means you are buying it for less than it is worth.
Should I count mileage charges?
Yes. If you would owe excess-mileage or wear charges on return, those make buying relatively more attractive.
Can I negotiate the residual?
The residual in your contract is set, but you can ask the leasing company about the payoff and fees.
Check the assumptions and units before relying on a result. Financial, tax and health estimates do not replace advice for your individual circumstances.
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