Lease Buyout Calculator

The lease buyout calculator is designed to help you estimate the cost of keeping a leased vehicle instead of returning it. It calculates the price based on the residual value set in your contract and adds sales tax, the option to purchase, title and registration fees. If you're buying the car before the end of the lease term, any remaining payments are also factored in.

The result is the price that must be paid to fully own the vehicle. By comparing this price with the market value of the vehicle, it can be seen whether a positive asset will be created after the buyback or if an overpriced price is being paid.

Method of calculating repurchase price:

The total buyback price is made up of several individual positions. Each position can be directly taken from the leasing documents or local tax rates.

R stands for the residual value, i.e. the purchase price of the vehicle as stipulated in the contract. t is the sales tax rate. As the residual value counts as the purchase price, sales tax is levied on the residual value.

m represents the remaining number of monthly payments and p is the current monthly payment. The product of both will give you the outstanding payments. This is only considered in case of early buyback. F_buy is the option to buy while F_other includes title, registration, and other fees that are due to the lessor.

A complete example.

The lease is about to expire and the residual value is $15,000. The purchase option costs $500. For simplicity's sake let's assume there are no additional sales taxes in this state.

Since the lease has expired there are no further payments to be made and the purchase price is $15,000 plus $500, which is $15,500. If vehicles of the same model are being sold on the used market for around $17,000 then by purchasing you can realize a value of approximately $1,500. This difference is why many drivers purchase their vehicle and either keep or resell it.

Option to buy at end of lease and early termination.

At the end of the lease term, remaining payments fall to zero so the purchase price is made up of the residual value plus taxes and fees. This is the most common scenario and usually when the cost of ownership is lowest.

The terms for early payoff vary. Since the remaining balance is also due, the leasing company will offer a total amount that includes the remaining debt in the price. If you activate the option to pay off early and enter the number of months left and your monthly payment, you can see what the additional cost would be.

Is there a sales tax on reversals?

In most states yes. Sales tax is charged on a purchase but since the purchase price is a residual value this tool will apply the sales tax rate to the residual value.

Tax rates vary widely by region. Some states have a zero tax rate while some counties can be over ten percent. To get accurate results use the combined state and local tax rate for your area. Since monthly payments are already taxed they will not be taxed again here.

Financing for unwinding

Not everyone pays cash. With a lease buy back loan you can spread the cost over monthly payments with interest and term determining the final amount.

Activate the financing option and enter a down payment, interest rate, and term length. The calculator will then show you your monthly payments, total interest paid, and the total cost including interest. The longer the term, the lower the monthly payments but overall more interest is paid.

Is buying a leased car a good idea?

The most important criterion for the decision is the value of the asset. When you enter the market value of the vehicle, the calculation tool subtracts this value from the purchase price.

A positive number indicates that the vehicle's value exceeds the purchase price so you can realize this amount on the day of purchase. A negative number means that you will have to pay an amount in excess of the vehicle's value and should be a sign to return the vehicle or renegotiate terms. In some cases, it may make sense to buy the vehicle if there are additional costs for mileage overage or depreciation at return.

This tool is for informational and planning purposes only and does not constitute financial advice. The actual amount you will pay depends on the lease agreement, lender, and local taxes and fees. Please check with your leasing company to verify these figures before making a decision.