Financing
Lease Buyout Calculator
At lease end, the contract names a buyout price. Whether it's a deal is one number — the equity between the all-in buyout and the car's market value today.
Your numbersSaved on this device only
📈 Equity (market − all-in buyout)
$2,390
buy-out total $19,610 vs market $22,000
✅ Buy it out
Market value exceeds the all-in buyout — you're buying a car for less than it's worth. Equity comes home with you.
- Buyout price
- $18,000
- Sales tax
- $1,260
- All-in buyout
- $19,610price + tax + fees
- Equity %
- 10.9%of market value
What this computes
The leasing company set your residual price years ago, based on a forecast of where used values would land. Today, the actual used market either agrees, exceeds it (you have equity), or falls short (the buyout is above market). The decision to buy out or return is one comparison: all-in buyout cost vs current market value.
The math
buyoutTotal = buyoutPrice + buyoutPrice·taxRate + fees
equity = marketValue − buyoutTotal
Positive equity means you're paying less than the market asks for the equivalent used car. Negative equity means you'd overpay relative to just buying the same year/mileage used elsewhere.
A "great deal" buyout is one where the residual was set conservatively years ago, and the market disagreed in your favor. Check before you sign anything.
How to use this
- Read the buyout price off the contract (sometimes called residual or purchase-option price), plus the listed purchase-option fee.
- Get a real market value for your exact year, mileage, and trim from a used-price guide. Don't use a generic figure.
- Add your state's sales tax rate. Most states tax the buyout price; a few don't tax lease buyouts the same way as a new purchase — confirm locally.
- Decide on equity, not feelings. "I love this car" isn't a reason to overpay; "I know its history" is worth real money but rarely more than $500-1000.
Why residuals are sometimes well below market
- Conservative pricing at signing. Lessors prefer to be "wrong" in the direction that protects them.
- Supply shocks. The 2021-2023 used-car market saw residuals set years earlier vastly undershoot reality.
- Strong-resale models. Trucks and certain Japanese brands routinely hold value above residual.
- The flip side. Luxury and many EVs often have residuals above market — those are no-equity returns.
What this calculator doesn't model
- Excess-wear / mileage-overage charges you'd pay if you return the car.
- State tax oddities. A few states have unusual buyout-tax rules; confirm locally.
- Financing the buyout. Interest cost adds to total if you borrow — see Auto Loan.
- Negotiation. The buyout price is sometimes negotiable, especially with third-party leasing companies — try before assuming the residual is fixed.
Frequently asked questions
How is a lease buyout calculated? +
Your contract states a buyout (residual) price. The all-in cost is that price plus sales tax on the buyout plus any purchase-option / doc / registration fees. Compare that to the car's current market value as a same-year same-mileage used car. The difference is your equity — positive means the buyout is below market, negative means above.
When should I buy out a lease? +
When equity is solidly positive — typically a few hundred dollars or more — because you'd otherwise have to buy the equivalent car on the used market at the higher market price. You also know the car's history, which is real but hard-to-price value. When equity is negative, return it and shop the used market.
Why would the residual be below market? +
Leasing companies set residual values at lease signing, predicting depreciation. They often estimate conservatively. If the actual used market for that model held up better than expected (supply shortages, fuel-price swings, model redesign delays), the contract residual is below today's used price — that gap is your buyout equity.
What fees are typical on a buyout? +
A purchase-option fee ($300-500) is common, plus state title and registration fees, and possibly a doc fee from the leasing company. These are flat amounts; the calculator's 'fees' input captures them. Sales tax on the buyout price is separate and varies by state.
Should I finance a lease buyout? +
You can — most major auto lenders offer lease-buyout loans, often at near-purchase APRs. The financing question is independent of the buyout-vs-return decision. Decide whether to buy out first (based on equity); if yes, then shop a buyout loan against your own cash.
Is this financial advice? +
No. AutoMath is an educational tool. Residual values, fees, and tax treatment vary by lender and state; market values vary continuously. The output depends entirely on the figures you provide. Confirm with the leasing company and a real used-value source before committing.
Related calculators
- Lease vs Buy — the front-end decision before any buyout question exists.
- Lease Mileage Overage — buying the car waives the excess-mileage charge.
- Lease Payment — what the lease was costing you each month.
- Auto Loan — financing the buyout if you choose to keep the car.
- Car Depreciation — why residuals often miss the market.
- True Cost of Ownership — keeping a car past lease-end vs starting fresh.
AutoMath is an educational tool. The numbers above depend entirely on assumptions you provide and are not financial advice.