Start with the contract or quote
What is the lease buyout price?
At the scheduled end of a lease, the purchase-option price is commonly based on the residual value stated in the lease. For an early buyout, ask the lessor for a current written quote because remaining obligations, timing and contract terms can change the amount.
The Consumer Financial Protection Bureau explains that the residual value is the estimated end-of-lease value and is what you pay if the lease includes a purchase option. Regulation M requires applicable purchase-option information to be disclosed in consumer leases.
References: CFPB guidance on leasing versus buying and CFPB Regulation M disclosures.
The calculation
How the buyout estimate is calculated
The calculator starts with the written purchase-option or buyout price, then adds only the tax and fees you enter. Cash paid upfront reduces the amount financed but does not reduce the vehicle’s acquisition cost.
The monthly loan estimate uses the standard fixed-rate amortization formula. The calculation methodology explains the payment formula and rounding in detail.
Worked example
Financing a $27,000 lease buyout
A $27,000 buyout with 7% tax, a $350 purchase-option fee and $400 for title and registration has an estimated acquisition cost of $29,640. After $3,000 upfront, financing $26,640 for 60 months at 6.5% APR produces an estimated payment of $521.24 and approximately $4,634.53 of loan interest.
These figures are an estimate, not a payoff quote or loan offer. Verify every amount with the lessor, lender and relevant motor-vehicle or tax authority.
Compare price with value carefully
Is the buyout price below the car’s market value?
The calculator subtracts acquisition cost from the estimated market value. A positive number means the market estimate is higher than the price before financing; a negative number means the buyout costs more than the market estimate. Neither result automatically makes the decision good or bad.
- Use several comparable vehicles. Match year, trim, mileage, condition and location.
- Inspect the car. Known history is useful, but future repairs and warranty coverage still matter.
- Include interest. A favorable purchase price can become less favorable after a long or expensive loan.
- Consider the alternative. Returning the vehicle may involve disposition, mileage or wear charges under the contract.
Avoid double counting
Check what the written buyout quote includes
Do not automatically add every remaining lease payment to the residual value. An early buyout quote may already reflect contractual obligations. Ask for an itemized figure and confirm its expiration date, applicable tax, purchase-option charge, title and registration costs, and whether any other lease-end amounts remain due.
The FTC recommends comparing total cost rather than focusing only on a monthly payment. A longer loan can lower the payment while increasing total interest.
Consumer reference: Federal Trade Commission guidance on financing or leasing a car.