When a car lease nears its end, you are handed three choices: hand the keys back, lease or buy something else, or buy the car you have been driving. Most people never run the numbers on that third option — and that is a missed opportunity, because a lease buyout can be either one of the cheapest used-car purchases you will ever make or an overpriced trap, depending entirely on two numbers: the buyout price written into your contract and what the car is actually worth today.
This lease buyout calculator puts those two numbers side by side. It adds the buyout fee, any remaining payments, and the sales tax your state charges, then computes your lease equity — the difference between the car's current market value and what it costs to keep it. If the market value is higher than the buyout cost, buying is a smart deal. If the buyout cost is higher, walking away saves you money.
How to Use
- Enter the Lease Buyout / Residual Price. This is the fixed purchase-option price printed on your lease agreement — the residual value the dealer predicted the car would be worth at lease-end, not a negotiated figure. You can also find it by logging into your lease company's portal.
- Set the Current Market Value. Check the car's trade-in and private-party value on Edmunds or Kelley Blue Book for your ZIP code, accounting for mileage, condition, and options. Be honest about dents and excessive miles, because the buyout price does not care — but your resale value does.
- Add the Buyout / Disposition Fee. Most lease contracts charge a $300–$500 purchase-option fee (and sometimes a disposition fee) when you buy out the lease. It is usually listed on your maturity letter.
- Enter the Sales Tax Rate at Buyout for your state. Some states tax the full buyout price when you purchase; others already collected tax inside your monthly payment. If you are unsure, leave it at 0 and ask your dealer.
- Fill in Remaining Monthly Payments only if you are buying out the lease before it matures — otherwise the buyout amount does not yet include those installments. At lease-end this is $0.
The result card shows the estimated sales tax, the all-in total buyout cost, your lease equity, and a plain-English recommendation: Buy, Return, or Neutral.
The Buyout Math in Plain English
A closed-end lease guarantees that the car's predicted end-of-lease value — the residual — is a fixed price you may buy the car for. The math is deliberately simple:
Total Buyout Cost = Residual Price + Buyout Fee + Remaining Payments + Sales Tax
Lease Equity = Current Market Value − Total Buyout Cost
- Positive equity (market value above buyout cost): the car is worth more than the price on your contract. Buying it is like getting a discount off the going used-car rate — and you skip dealer markups, reconditioning, and the search for another car.
- Negative equity (buyout cost above market value): the contract price is higher than what the car is worth. Returning the car and walking away lets the leasing company absorb that loss, not you.
- Near zero: it is a wash. Let other factors decide — how much you like the car, your wear-and-tear and mileage bills, and how hassle-free a same-car purchase is.
Worked example: a residual of $19,250 plus a $350 buyout fee and 0% tax comes to a total buyout of $19,600. If the car is only worth $18,000 today, your equity is −$1,600 — you would be paying $1,600 more than the market. The calculator recommends returning the car. Flip the market value to $22,000 on the same buyout and your equity becomes +$2,400, and buying becomes the clear move.
Why the Residual Is Not the Market Value
Lessees are often confused that the "residual value" on their contract feels too high or too low. That number was set by the leasing company when you signed — sometimes three years ago — based on predicted resale values. The used-car market moves: prices rose sharply after 2021, then softened in 2024 and 2025. A car that was projected to be worth $19,250 at lease-end might now actually be worth $22,000 (creating positive equity for you) or only $17,000 (creating negative equity). That gap is exactly what this calculator measures, and it is why checking a live KBB or Edmunds value matters more than the contract number alone.
Remember that buying out a lease is still a used-car transaction. You will need to register the car, pay title and tag fees (a few hundred dollars in most states), and you may want an independent mechanic's inspection before signing. If you finance the buyout with a loan, shop the rate — lease-buyout auto loans often carry slightly higher rates than ordinary used-car loans, and a bank or credit union can beat the dealer's in-house offer.
Examples
Example 1 — Underwater lease (return it). Your contract lists a $19,250 residual, a $350 buyout fee, and 0 remaining payments. KBB says the car's current market value is $18,000. Total buyout cost is $19,600, equity is −$1,600. The calculator recommends Return — you would be overpaying by $1,600 versus the open market, and the leasing company already priced in that depreciation risk when it set the residual.
Example 2 — Equity lease (buy it). A car with a $15,000 residual and a $300 fee has appreciated in the hot used market to $18,000. Total buyout is $15,300; equity is +$2,700. Buying the car at the contract price is effectively a $2,700 discount off market, and you avoid the disposition fee, reconditioning, and another car hunt. The calculator recommends Buy.
Example 3 — Luxury lease at scale. A high-end lease with a $1,200,000 residual and a $500 fee, where the current market value has held at $1,250,000. Total buyout is $1,200,500 and equity is +$49,500 — a large positive-equity buyout that more than justifies purchasing the vehicle rather than returning it.
Example 4 — Break-even. A $20,000 residual, $0 fee, $0 tax, and a $20,000 market value produce exactly $0 equity. The calculator flags this as Neutral — a decision you should make on comfort, condition, and convenience rather than dollars.
FAQ
How is a lease buyout calculated?
Add the residual (purchase-option price) on your lease agreement, the buyout/disposition fee, any remaining monthly payments, and the sales tax your state charges. Subtract that total from the car's current market value to get your lease equity. Positive equity means buying beats returning; negative equity means returning beats buying.
Should I buy out my lease or return the car?
Buy it out when the current market value is comfortably above the total buyout cost — you are effectively buying the car below market and skip another search. Return it when the buyout price exceeds market value, because the leasing company already absorbed that depreciation risk when it set the residual. Near zero? Choose based on how much you like the car and your wear-and-tear exposure.
Do I pay sales tax on a lease buyout?
It depends on your state. Some states charge sales tax on the full buyout amount when you purchase the vehicle; others already collected tax inside your monthly lease payments, so you owe nothing extra at buyout. Enter your state's rate in the calculator, or set it to 0 if your payments were tax-inclusive — and confirm with your dealer.
Can I negotiate a lease buyout?
The residual price itself is fixed in your contract and usually cannot be changed. However, you can negotiate the buyout fee, the interest rate on any buyout loan, and you can shop the loan around to banks or credit unions. Some lessees also use a higher competing trade-in offer to ask the dealer to discount the buyout slightly, though this is not guaranteed.
What happens if I return the car with excess miles or wear and tear?
Returning the car means the leasing company bills you for excess-mileage charges (often $0.20–$0.30 per mile over the limit) and wear-and-tear fees. If those bills would be large, compare them against your lease equity — sometimes buying the car and selling it privately nets more money even with slightly negative equity.
Is a lease buyout loan a good idea?
Only if your equity is positive or the car is worth keeping. The loan itself is just financing for the buyout price — shop for the lowest APR you can qualify for, because dealers often mark up the rate. If you can pay cash or use a low-APR credit union loan, the economics improve; a high-rate buyout loan can erase your equity quickly.
Disclaimer
This lease buyout calculator is provided for informational purposes only and does not constitute financial, legal, tax, or leasing advice. Estimates are based on the inputs you enter; actual buyout prices, fees, taxes, and market values vary by lease contract, state, vehicle condition, and mileage. Always confirm the exact payoff figure with your leasing company and verify the car's current value with a live pricing guide before making a decision.