About the Lease Buyout Calculator
This lease buyout calculator works out what it will really cost to buy the car you are leasing. It adds the residual value from your contract, any lease payments still left, the purchase option fee, sales tax and title or registration fees, then compares the buyout price with what the car is worth on the open market. If you plan to finance the purchase, it also estimates the monthly payment and total interest on a lease buyout loan.
Use it as your lease end approaches, when used-car prices are high and your residual looks cheap, or when you are over your mileage allowance and want to avoid excess-mileage and wear charges by keeping the car. A buyout price below market value means you have positive lease equity; you can keep the car or, where your lessor allows it, sell it to capture that equity.
Remaining payments are added in full, which gives a conservative estimate for an early buyout: your lessor’s official payoff quote may be lower because future rent charges are removed. Sales tax rules on buyouts vary by state, so check the rate and what it applies to before signing.
With the default inputs, the total buyout cost (incl. tax & fees) is $19,701.00. Change any value above to recalculate instantly.
How to use the lease buyout calculator
- 1Find the residual value and purchase option fee in your lease contract.
- 2Enter any payments still remaining and the monthly amount.
- 3Add your state sales tax rate and title or registration fees.
- 4Enter a realistic market value for the same model, trim and mileage.
- 5If you will finance, enter your cash, the loan APR and term.
- 6Compare lease equity and the verdict, then request an official payoff quote.
Formula and method
At lease end the buyout price is the residual value written in your contract plus the purchase option fee. If you buy early, the calculator adds every remaining monthly payment, which is a conservative upper estimate — the lessor’s real payoff quote removes unearned rent charges. Sales tax is applied to the buyout price, and fixed title and registration fees are added on top.
Lease equity is market value minus the pre-tax buyout price; tax and fees are left out because you would pay them on any car you buy. If you finance, the amount financed is the total cost less your cash, and the payment uses the standard amortization formula M = P × r ÷ (1 − (1 + r)^−n) with r = APR ÷ 12.
- Residual
- Purchase price at lease end stated in the contract
- Remaining
- Number of lease payments still due
- P
- Amount financed (total cost − cash)
- r, n
- Monthly loan rate and number of months
Worked examples
Lease end: $18,000 residual, car worth $21,000
The buyout price is $18,000 + $350 = $18,350, sales tax at 6% is $1,101 and fees add $250, for $19,701. The car is worth $21,000, so you have $2,650 of lease equity. Financing $16,701 at 7.5% for 48 months costs about $403.81 a month and $2,682 in interest.
Early buyout with 6 payments left, paid in cash
Six payments of $400 add $2,400 to the $16,500 residual and $350 fee, for $19,250. That is $750 more than the $18,500 market value, so the buyout is roughly break-even — an official payoff quote without future rent charges could tip it into positive equity.
Residual set too high for today’s market
With a $24,000 residual, the buyout price of $24,350 is $4,350 above the $20,000 market value. Financing the full $26,304.50 at 9% for 60 months would cost about $546 a month, so returning the car is likely the better choice.
Frequently asked questions
Is a lease buyout a good idea?+
It is usually worthwhile when the buyout price is below the car’s market value, when you are well over your mileage limit or have wear charges coming, or when you know the car has been reliable. If the residual is above market value, returning the car is generally cheaper.
Do you pay sales tax on a lease buyout?+
In most US states, yes — buying the car is a new sale, so tax is charged on the purchase price. Some states credit tax you already paid on lease payments or tax only certain amounts, so check with your state DMV or lessor.
Can I negotiate the lease buyout price?+
The residual value is fixed in your contract, and captive finance companies rarely negotiate it. Dealers sometimes add their own fees on top, which you can decline by buying directly from the leasing company where allowed.
How do I finance a lease buyout?+
Banks and credit unions offer lease buyout loans, which work like used-car loans. Get pre-approved, then the lender pays the leasing company directly and you receive the title.
What is lease equity?+
Lease equity is the difference between the car’s current market value and your buyout price. Positive equity can be used as a trade-in credit, kept by buying the car, or sometimes realized by selling to a dealer.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.