Lexus makes some of the best on the market, and it’s not uncommon for drivers who lease one to end up growing attached to it. Buying out a leased car is a straightforward process—but you need to carefully consider your options before doing so.
There are a lot of benefits to leasing a car. You get to drive the newest models and avoid some of the headaches that owners face, all while still getting where you need to go. But every so often you might realize the car you’ve leased is perfect for you, and at that point, you might want to buy it outright.
Jerry, the car insurance comparison super app, has put together this guide all about buying out a leased Lexus. Read on to learn what a lease buyout is and how you can get started—and how you can be saving on your Lexus insurance costs.
What is a lease buyout?
When you lease a car you pay a dealer to use it for a certain period, but at no point do you own it. This differs from taking out a car loan since in that case, you’ll officially own the vehicle once it’s fully paid off.
With a lease buyout, you can purchase the car for its remaining value rather than moving on from it after your lease period. When you buy out a lease, the value lost during the time you’ve had the car is taken into consideration.
There are two different ways to buy out a lease:
- Lease end buyout: Once your lease contract comes to an end, you have the chance to negotiate a purchase price with the dealership rather than start a new lease or turn in the car. When your lease is nearing its end, you can expect to hear about this option in detail.
- Early lease buyout: If you’re antsy to own your leased Lexus, some dealers will be willing to negotiate a purchase price before your lease has ended.
How a Lexus lease buyout works
If your lease period is ending soon and you’d rather buy the Lexus than renew the lease, here are the steps you should take:
- Check your lease contract: Your contract may have information detailing the price you need to pay if you’d like to pay off and own your Lexus.
- Get a payoff quote: You can find the payoff quote for your Lexus by either contacting Lexus Financial Services at 1-800-286-0653 or by logging into your LFS account.
- Get pre-approved for financing: Banks and credit unions are popular institutions to visit if you need to take out a car loan, and your dealership may also be willing to finance the purchase. Compare all of your options before making a decision.
- Negotiate a deal for your Lexus: If you’re pre-approved for a loan or have the money to buy the car outright, you’ll be in a great position to negotiate the deal.
- Make sure your registration and insurance are in order: Just like when you purchase any other car, you’ll need to pay for a title transfer, register the vehicle with the DMV, and make sure it has the necessary auto coverage.
Will Lexus finance a lease buyout?
Lexus Financial Services and the dealership you leased your Lexus from may offer to finance your purchase, but that doesn’t mean you need to accept their offer right away. The best way to get a good rate on a car loan is to compare three or more options.
Try going to a bank or credit union to find out the rates they are willing to offer you on a loan. Having a credit score of 660 or higher will help you secure a low rate.
Is a Lexus lease buyout worth it?
If you love the car you’ve been driving, a Lexus lease buyout might seem like the perfect choice. That’s not always the case, however, and you need to look closely at the car’s value before agreeing to anything.
How to calculate Lexus lease buyout fees
You can indeed find your payoff quote by either calling Lexus Financial Services or logging into your account on their website, but there is also another way to calculate your buyout fees.
Start by locating your vehicle’s residual value, which is an estimate of what the car will be worth at the end of the lease term. This figure should be located somewhere in your lease contract. You should then compare that number to your vehicle’s actual value, which you can find using any number of online services
If the actual value of your Lexus is higher than the residual value you’ll likely have to pay, then buying your leased Lexus is probably a good decision. But if you’ve driven the Lexus more than expected and it’s showing signs of wear and tear, you might be asked to pay more than the car is worth.
When it’s better not to buy out a Lexus lease
Once you become familiar with a car it becomes very comfortable to drive it, so you may be tempted to keep your Lexus even if it’s not the best decision you could make. Here are some reasons you should avoid buying out your leased Lexus:
- The car has lost more value than expected due to accidents, repairs, and frequent use.
- You’d rather have a newer or different Lexus or you’d like a car of a new make together.
- You aren’t being offered a low rate to finance the purchase or you aren’t in the financial position to own a car.
There are plenty of reasons why you may have opted for a lease in the first place, and some of those reasons might still be relevant now. Rather than jumping in and buying the first Lexus you’ve ever leased, wait until the right time and the right car come along before buying one out.
How to save on Lexus insurance
If you’ve decided that you’re going to purchase your Lexus outright rather than renew your lease, it’s time to start thinking about car insurance. Car insurance can be expensive and it can be difficult to find the right coverage, but Jerry makes it easy.
Jerry is a car insurance comparison app that you can sign up with in under a minute. The Jerry app will find you the cheapest rates from over 50 car insurance providers and help you to either purchase or switch over your coverage.
How could I forget the savings? On average, Jerry users save over $800 each year on their car insurance payments.
Sean Boehme is an insurance writer with over three years of writing and editing experience. A specialist in car insurance and state laws surrounding car ownership and registration, Sean’s mission is to create content that educates car owners about how to make all aspects of car ownership more affordable. To that end, Sean has authored over 300 articles for Jerry on topics including vehicle maintenance basics and car registration requirements. Prior to joining Jerry, Sean worked as a games writer for Screen Rant.
Jessica Barrett is a senior insurance writer and editor with 10 years of experience in the automotive and travel industries. A specialist in car insurance, car loans, and car ownership, Jessica’s mission is to create comprehensive content that car owners can use to manage their costs and improve their lives. As a managing editor for a team of writers and insurance specialists, Jessica has edited over 2,000 articles for Jerry on topics ranging from local insurance shopping tips to refinancing car loans with bad credit. Before joining Jerry as a senior content editor in 2021, Jessica created visual content for clients such as Expedia, Vivid Seats, Budget Direct Car Insurance, Angie’s List, and HomeAdvisor. Her content was published in Business Insider, Forbes, Apartment Therapy, and the BBC.
