Can I buy out my car lease early? What it costs and how it works
You do not have to wait for the last month of your lease. Here is how an early buyout is priced, what it adds up to in New Jersey, and the steps to do it.
Can you buy out a car lease early?
Often, yes. Most lease contracts include a purchase option, and many let you use it before the lease term ends. The terms, including whether outside lenders can pay it off, are set by your contract and your leasing company, so confirm with them before you plan around it.
How is an early lease buyout price calculated?
Your early payoff is generally built from these pieces. Your contract spells out the exact formula:
- The remaining payments still owed on the lease, adjusted for any unearned finance charges.
- The residual value, which is the purchase price set in your contract.
- Any purchase-option or administrative fee the leasing company adds.
Because the formula is contract-specific, do not rely on a calculator or a dealer’s estimate. Ask the leasing company for a written purchase payoff with a good-through date.
What else does an early buyout cost in New Jersey?
- NJ sales tax at 6.625% of the purchase price. Lakewood’s UEZ rate does not apply to cars.
- MVC title and registration fees. What to bring and what it costs.
A buyout loan can be sized to cover the payoff, the tax and the fees together, subject to lender underwriting.
Is an early buyout worth it?
Compare the payoff with what the car would sell for. If it is worth more than the payoff, you have equity, and buying early can lock it in. If it is worth less, an early buyout means paying above market value. Our guide on whether to buy out your lease walks through the comparison.
Common reasons people buy early: they are about to go over their mileage allowance, they want to keep a car they have grown attached to, or they want to sell it themselves and keep the equity.
How to buy out your lease early: the steps
- Request the early purchase payoff in writing from your leasing company, with a good-through date.
- Ask if they accept payoff from an outside lender, and how it must be sent.
- Check the car’s market value and add tax and fees to see the full cost.
- Apply for financing, if you do not want to pay cash. We work to get you the best rate possible for your credit situation.
- The payoff is sent to the leasing company, which releases the title.
- Title and register the car in your name at the NJ MVC.
Ready to start? Fill out the credit application or call (732) 618-2036. We are a financing partner, not a lender; approvals and terms are subject to lender underwriting.
Early lease buyout: common questions
Can you buy out a car lease early?
Often yes. Many leases include a purchase option you can use before the lease ends, but the terms are set by your contract and your leasing company, so ask for the early purchase payoff in writing.
How much does it cost to buy out a lease early?
The early payoff is typically the remaining payments plus the residual value, adjusted for any unearned finance charges, plus any purchase-option or administrative fee in your contract. On top of that come New Jersey sales tax and MVC title fees. Only your leasing company can give you the exact figure.
Is it cheaper to buy out a lease early or wait until the end?
Not necessarily. The payoff changes with timing, but the better test is whether the car is worth more than the payoff. If it is, buying early can lock in that equity. If it is not, waiting will not change the fact that you would be paying above market value.
Can I buy out my lease early with bad credit?
Possibly. Approval, rate and terms depend on your credit and the lender, and equity in the car can help. Asking for a quote is not a credit application.
Will buying out my lease early hurt my credit?
Paying off the lease is not itself a negative event. Applying for a loan involves a credit review, which can have a small, temporary effect on your score.
General information, not financial or legal advice. Your lease contract controls your purchase price and rules.
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