Should I Buy My Leased Car? 5 Times to Say Yes

The buyout option at the end of a car lease can be an attractive opportunity or a tool for damage control.

Essentially, you're buying a used car you know and like, for a price set by the leasing company at the beginning of your contract. If you’re anticipating extra fees and penalties, buying the car can cut your losses. Or, if market conditions have changed since you signed the lease and you’ve lightly driven the car, you could benefit from any hidden lease equity in the vehicle.

Here are some reasons you might decide to keep your leased vehicle instead of turning it back in.

1. You're way over — or under — the allowed mileage

A standard lease contract is for three years and 36,000 miles total — in other words, 12,000 miles per year, although it’s possible to negotiate a higher-mileage lease. If you're over what you agreed to, you’ll pay an excess mileage fee — anywhere from about 12 to 30 cents per mile

if you're under the mileage limit, you could leave money on the table. Returning a car you drove only 10,000 miles, when you paid for 36,000 miles is like handing the dealer a big check. Instead, you could buy the car, drive it and use the value you’ve paid for. Alternatively, you might be able to buy the car and sell it for a profit. Get an appraisal at an online car buyer such as Carvana or CarMax, to see if the low-mileage car’s value is greater than the buyout price.

» MORE: Compare lease buyout loans

2. Buying the car could help you avoid fees

Although fees alone may not be a deciding factor, they’re still something to take into consideration.

For example, buying the car will save you the disposition fee, the charge to prepare the car for resale, which is usually $350-$500.

Also check your contract for purchase option fees (typically a few hundred dollars), charged by some leasing companies, and factor that into your decision.

3. Your car has excess wear and tear

If your car has a collection of indiscretions — scrapes, dings or tears in the upholstery — you could be looking at penalties for excess wear and tear. But if you buy the car, you won’t be charged for the damage, and you can fix the bumps and bruises when, and if, you want.

4. Your car is worth more than its buyout price

In some cases, your car may increase in value for reasons not anticipated when the buyout price was set. If the car is worth more than the buyout price in the lease agreement, it can provide an opportunity to buy the car, sell it and pocket the difference.

On the other hand, if your car’s market value is less than the buyout price, it typically isn’t a good idea to buy it. However, you might consider buying it if the leasing company is willing to negotiate and lower the buyout price. A lender may do this to eliminate its own shipping and auction fees on a vehicle it isn't likely to sell at a profit.

» MORE: Calculate the cost to buy your leased car

5. You like the car and want to keep it

Buying a car you’ve driven for several years provides peace-of-mind in knowing you’re getting a car you enjoy driving. You also know the car’s history and whether it’s been well cared for.

Keeping the car helps you avoid the hassle of shopping for a new one. And, if you’ve leased for years, getting a lease buyout loan can be a path to eventually eliminating monthly payments.

Keep in mind, however, that the car’s bumper-to-bumper factory warranty — typically three years or 36,000 miles — may have expired. But the powertrain warranty, covering major parts like the engine, transmission and suspension, might still be in effect. When buying your leased vehicle, check to see what warranty coverage remains.