Vehicle EconomicsBuy Lease vs Return It
Your lease is ending. Is buying it out cheaper than returning it and replacing the car?
Why this comes up
Lease Buyout Calculator answers whether the buyout price is a good deal against market value in isolation. But the real decision at lease end is a branch: buy this specific car and keep driving it, or return it and take on a replacement, with its own price, financing, and transaction costs. This engine compares the two complete paths, not just the buyout snapshot.
How we calculated this
Buying totals the buyout fees plus ongoing ownership costs, financing interest only if you finance the buyout. Returning totals the disposition fee, any mileage overage charge, and a full replacement's cost of ownership over the same horizon. Whichever total is lower wins.
Worked example, using this page's own defaults: buying out the lease totals$17,950 over 3 years, returning and replacing totals$35,350, so buying wins by $17,400.
What this means
- Positive buyout equity (a low buyout price against market value) can still lose to buying if the car's known future repair and operating costs are high, run this full comparison rather than stopping at the equity snapshot.
- A return has real terminal costs too: the disposition fee and any mileage overage are easy to forget when only comparing lease payments.
- If the numbers are close, check your actual mileage overage exposure carefully, it can tip a near-tie decision either way.
Limitations
Contract-specific charges (disposition fee, purchase option fee, mileage rate) must come from your actual lease agreement; this engine does not invent or estimate them. See Methodology.
Methodology
This engine combines Vehicle Economics' fixed-rate amortization model (the standard loan-payment formula run out as a full month-by-month schedule), ownership total cost model (every ownership cost, depreciation, financing, fuel, insurance, maintenance, repairs, and fees, summed over your horizon), and lease payment and buyout model (cap cost, residual, and money factor split into a depreciation charge and a rent charge). See Methodology for the full detail.