Your lease buyout price is the residual value set at lease signing, plus any purchase option fee and applicable taxes. Whether this is a good deal depends entirely on how the residual compares to the car’s current market value. In 2026, with used car prices remaining elevated, many lease buyouts are actually good deals — or even underpriced relative to the open market.
Lease Buyout Formula
$$\text{Total Buyout Cost} = \text{Residual Value} + \text{Purchase Option Fee} + \text{Applicable Taxes and Fees}$$
Example:
- Residual value on lease agreement: $22,000
- Purchase option fee: $300
- Sales tax (6%): $1,338
- Total buyout: $23,638
How to Calculate Whether to Buy Out Your Lease
Step 1: Find your residual value in your lease agreement or lessor’s online portal.
Step 2: Get the current market value of your car — same make, model, year, mileage, and condition — from Kelley Blue Book (kbb.com) and CarMax (instant offer).
Step 3: Compare:
| Scenario | Action |
|---|---|
| Market value > Residual | Strong buyout candidate — you have equity |
| Market value ≈ Residual | Neutral — compare to cost of alternatives |
| Market value < Residual | Overpriced buyout — return the car |
Worked Example
| Vehicle A | Vehicle B | |
|---|---|---|
| Lease residual | $24,000 | $24,000 |
| Current KBB market value | $27,500 | $20,000 |
| Built-in equity (or overprice) | +$3,500 equity | -$4,000 overpriced |
| Recommendation | Buy out | Return |
In Vehicle A’s case, you can buy at $24,000 + fees and immediately have an asset worth $27,500. You can keep it, or sell/trade it for a profit (check if your state allows third-party lease buyouts).
What Is Included in the Buyout Amount?
| Item | Typical Amount |
|---|---|
| Residual value | As stated in lease |
| Purchase option fee | $200–$400 |
| Documentation fee | $0–$500 (varies by state/dealer) |
| Sales tax | Varies by state (typically on full buyout price) |
| Registration/title fees | $50–$300 |
How to Buy Out Your Lease — Step by Step
- Call the leasing company (not the dealer) — get the buyout quote and payoff amount
- Get a competing market value — KBB, CarMax instant offer, Carvana offer
- Arrange financing — apply with your bank or credit union for a used auto loan; compare to the leasing company’s rate
- Complete at the dealer or directly with the lessor — some manufacturers allow direct buyout without going through a dealer (avoiding the dealer markup)
- Inspect before buying — even a leased car you’ve driven may have undisclosed damage; have a mechanic verify before finalizing
Can You Sell a Leased Car Buyout to a Third Party?
Some leasing companies allow the lessee to buy out the lease and immediately sell to a third party (such as Carvana or CarMax). Others prohibit third-party sales and require the lessee to register the car first. Check your lease agreement or call your leasing company — Ally Financial, GM Financial, and Ford Credit have varying policies.
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