can dealership buy my lease

Can Dealership Buy My Lease

Leasing a car has become an increasingly popular option for many drivers in recent years. According to Experian, nearly 30% of new vehicles were leased in 2018, up from just under 20% in 2009.

There are many benefits to leasing instead of buying, including lower monthly payments, always having a newer vehicle, and not having to worry about trade-in or resale value.

However, what happens when your lease is up and you want to get a new car? You have a few options at that point. You can turn the leased car back in to the dealer and walk away, purchase the car you leased to keep it, or get a new lease on another car.

In this comprehensive guide, we’ll explore whether dealerships can buy your leased car, how it works, the pros and cons, what steps are involved, how pricing is determined, and tips to get the best deal if you decide to go this route when your lease ends.

Can Dealers Really Buy My Leased Car?

The short answer is yes, most dealerships are able to purchase leased vehicles from customers when the lease term expires. This can be an appealing option if you’ve

grown attached to the car you’ve been leasing and don’t want to give it up. While not all dealers will do this, many are willing to buy out leased cars to then sell as certified pre-owned vehicles.

Dealerships have a few motivations for buying back leased vehicles:

It’s an opportunity for them to get low-mileage, well-maintained used cars in great condition that they know the history on. This allows them to resell for a good price as a CPO car. They can make money on selling you a new car and then also make additional profit on reselling your turned-in lease.

  • The dealer may need specific models, colors, packages, etc. to meet customer demand for used versions of that vehicle. Buying your lease helps grow their used inventory.
  • Some lease deals include a guaranteed buyback price that the dealer offered when you first leased. They may be required to purchase it back for that set price.

So for a variety of reasons, many dealers see value in buying back leased vehicles when the contract ends. Make sure to ask if they offer lease buyouts when you’re exploring options.

Dealerships Have A Few Motivations For Buying Back Leased Vehicles:
Dealerships have a few motivations for buying back leased vehicles:

How Does the Lease Buyout Process Work?

If you’ve decided you want your leasing dealer to purchase your vehicle at lease end, here are the typical steps involved in the process:

  1. Inspect the Vehicle

You’ll need to bring your leased car into the dealership so they can inspect its current condition and mileage. This will help determine the price they’re willing to pay. Expect them to be thorough during this inspection, noting any excess wear and tear, dents, scratches, or other damage.

  1. Obtain Payoff Quote

The dealer will contact the leasing company to find out the current lease payoff amount – this is the remaining balance you would need to pay to purchase the car. This number is important for calculating the dealership’s purchase price.

  1. Make an Offer

Once they know the payoff amount and have inspected the car’s condition, the dealership will make you an offer to buy out your lease. This will generally be less than the payoff amount, allowing them to make a profit when reselling it. You can try to negotiate a higher price if you think their offer is too low.

  1. Finalize Paperwork

If you accept the dealer’s offer, you’ll sign paperwork to finalize the lease buyout agreement. This will include the agreed-upon purchase price and transfer the vehicle ownership over to the dealership. Make sure all terms are in writing before signing.

  1. Pay Sales Tax and Fees

You will likely need to pay any applicable sales tax and registration/title transfer fees on the agreed purchase price. This varies by state. Ask for a full breakdown of these costs so there are no surprises.

  1. Receive Payment

Once the paperwork is signed and taxes/fees are paid, the dealership will give you your final payment for the agreed buyout amount. They handle paying the leasing company the remaining balance owed.

  1. Terminate Your Lease

Finally, make sure to contact the leasing company to formally terminate your lease contract, since ownership is now transferred to the dealer. This gets you out of the lease responsibility.

Factors That Determine Your Lease Buyout Price

When negotiating the price a dealership will pay to purchase your leased vehicle, there are several important factors at play:

Remaining Lease Term – The closer you are to the end of your lease contract, the less they need to pay. A shorter remaining term means lower unpaid payments.

Mileage – If you’ve gone over the mileage limits in your contract, that reduces the car’s value and the price the dealer will pay. Staying under limits helps maximize your negotiation leverage.

  • Condition & Wear/Tear – Dealers deduct for any excess wear, dents, stains, or mechanical issues that will cost to repair and clean up. Keep the car in excellent shape for highest value.
  • Market Value – The dealer will appraise the car based on current market pricing for that make, model, year, packages, and mileage. Popular cars in high demand bring better offers.
  • Residual Value – This is the estimated value of the car at lease end per your contract. The closer the dealer’s offer is to matching residual value, the better for you.
  • Payoff Amount – The lease balance still owed influences the buyer’s price. A lower payoff allows them to pay you more for the car itself.

Reselling Potential – How much the dealer thinks they can get for reselling your car also affects their offer price to you. Vehicles they know will sell quickly bring higher bids.
Buyback Guarantee – If your lease included a pre-set repurchase price from the dealer, that determines the minimum they will pay you.

Factors That Determine Your Lease Buyout Price
Factors That Determine Your Lease Buyout Price

Pros and cons of Dealers Buying Your Lease

Certainly, here is a table outlining the pros and cons of a dealership buying your lease:

1. Convenience: Dealerships can offer a convenient way to get out of your lease without much hassle.1. Lower Price: Dealerships may offer you less than the residual value of your lease, resulting in financial loss.
2. No Lease Penalties: You can avoid lease-end penalties for excess wear and tear or mileage by selling to a dealership.2. Limited Options: You may have limited options when selling to a dealership, limiting your ability to negotiate terms.
3. Streamlined Process: Dealerships are experienced in lease buyouts and can handle the paperwork efficiently.3. Limited Financial Benefits: Selling to a dealership may not yield the best financial outcome compared to other options.
4. Fast Turnaround: The process can be quick, allowing you to get out of your lease sooner.4. Potential Negotiation: Dealerships may not offer the best price initially, requiring negotiation skills to get a fair deal.
5. Trade-In Opportunity: You can potentially use the value of your leased vehicle as a trade-in for a new car.5. Limited Brand Options: Dealerships may only be interested in specific car brands, limiting your choices.
6. Reduced Liability: Once the dealership buys the lease, you’re no longer responsible for the vehicle.6. Market Conditions: The value offered by dealerships can be influenced by market conditions and the demand for certain types of vehicles.
Pros and cons of Dealers Buying Your Lease

Potential Downsides to Consider

You make some excellent points about potential downsides when selling a leased vehicle back to the dealer at lease-end:

Dealer has leverage since you need to turn in the car, so they may lowball the offer. Additional disposition or other fees could cut into your potential payout. Dealer is not obligated to make an offer if they don’t want the car.

Offer could be below fair market value to leave room for dealer profit on resale. Wear and tear costs may be underestimated in the dealer’s offer. You’d still need to negotiate for your next vehicle, not a guaranteed deal.

To mitigate these risks:

  • Research the car’s private party value to use as a baseline in negotiations.
  • See what competing dealers might offer as well.
  • Inspect the car thoroughly yourself beforehand to negotiate deductions objectively.
  • Consider selling privately if a dealer’s offer seems too low.

Due diligence upfront helps make an informed decision and avoid accepting an undervalued offer just to complete the lease return. Good advice to be cautious and protect your financial interests in the transaction.

Potential Downsides To Consider
Potential Downsides to Consider

How to Negotiate the Best Price from the Dealer

Research the current fair market value of your specific make/model using Kelley Blue Book, Edmunds, TrueCar, etc. Print out comps to show the dealer. Get actual written cash offers from other dealerships. This demonstrates what the market will bear and gives you leverage.

Inspect the vehicle thoroughly beforehand and note any above-average condition or features that would increase value – low miles, premium packages, specialized trim, add-ons, etc.

When the dealer makes an offer, be prepared to point out why it’s lower than market value based on your research. Reference comparable vehicles selling for more. Negotiate any proposed condition charges – determine what’s normal wear vs. actual damage.

Don’t reveal you’re dealing with a lease turn-in yet. Ask what they would offer “if you were selling it.” Play dealers off each other. Be willing to walk away from a low offer. You have the power since they want the car for resale.

How To Negotiate The Best Price From The Dealer
How to Negotiate the Best Price from the Dealer

Tips for Preparing Your Leased Car to Get the Best Offer from a Dealership

Make sure the car is clean both inside and out. Thoroughly vacuum and shampoo the interior, wash and wax the exterior. A detailed, clean car will make a better impression. Get any required maintenance or repairs done. Dealerships will offer less for a car that needs work.

Take care of things like oil changes, tire replacements, etc. before selling. Gather your lease paperwork and records of maintenance. This includes the original lease agreement, all records of repairs/service, payment history. Bringing documentation shows you took good care of the vehicle.

Calculate the car’s residual value based on your lease terms. Know around how much you expect the dealership to pay based on your agreement. This helps you negotiate a fair price. Get pre-approved for financing at your local bank or credit union.

Having an established rate from another lender puts you in a stronger position to negotiate with the dealership. Research recent sale prices of comparable vehicles in your area. Check services like Kelley Blue Book to understand the market value of your year/make/model with similar mileage.

Bring your driver’s license and proof of insurance/registration for the vehicle. The dealership will need to verify your ownership and process the paperwork.

The key documents to bring when selling your leased car to a dealership are the original lease agreement, maintenance records, and your driver’s license/vehicle ownership paperwork. Coming fully prepared allows them to quickly process the transaction.


My car lease is almost up and the dealer called offering a new contract for a new car, should I take it?

Consider your financial situation carefully before agreeing to a new lease. Compare the costs and terms to your current lease. A new lease will extend your car payment obligation. Make sure the new payment and fees work for your budget. Also consider the vehicle’s reliability and your future transportation needs. A new lease only makes sense if it meets your long-term mobility and financial goals.

Will a car dealership let you out of your lease without penalties if you lease a newer car?

Sometimes dealerships will allow you to turn in your current leased vehicle early if you sign a new lease contract with them. This is typically done as an incentive to get you into a new vehicle. However, there is no guarantee they will waive penalties. You’ll need to carefully review the terms of the new lease contract to understand if there are any fees or additional costs associated with ending the current lease early. Getting it in writing is key.

What do dealerships do with the cars after a lease period ends besides sell it again as a used car?

Some dealerships may use returned leased vehicles for loaner cars or service vehicles. Others auction them off wholesale to used car dealerships or car rental agencies. Occasionally a dealership will hold onto a vehicle and sell it as a used car on their lot. But in most cases, leased cars that are returned at the end of the lease term are sent to auction.

How can you get the dealership to forgive mileage overages on your car lease?

The best way to get a dealership to forgive excess mileage charges is to negotiate it when returning the vehicle at the end of the lease. Have a trade-in or plan to lease another vehicle to strengthen your bargaining position. Highlight your loyalty as a repeat customer. The dealership may be willing to forgive an overage, especially if you comply with other terms, to keep your future business. Another option is asking if they’d be open to a small payment to cover part of the overage rather than the full amount. Coming prepared to negotiate is key.


In conclusion, whether or not a dealership will buy out your lease depends on several factors. The most important things to consider are how much time is left on the lease, the car’s current value, how many miles you’ve driven, and your payment history.

A dealership may be willing to take over the remainder of your lease payments if they think they can sell the car for a profit within a reasonable timeframe. However, they are under no obligation to do so. Your best bet is to contact the dealership that originally sold you the lease,

provide all the necessary information about the vehicle and lease terms, and see if they will make you a competitive offer. Having a strong credit history and being near

the end of the lease term will improve your chances of a dealership takeover. While there are no guarantees, exploring this option could help you get out of your lease early if the timing is right.

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