BMW lease buyout allows drivers to purchase their leased vehicle instead of returning it at the end of the lease term—but it’s not always your best deal.

Written by Shannon Fitzgerald

Reviewed by Jessica Barrett

Updated on Apr 15, 2024

Table of Contents

Lease buyouts: What you need to know
How a BMW lease buyout works
Is a BMW lease buyout worth it?

If leasing that

M240

has helped you realize you want one, you could become your car’s legal owner with a

BMW

lease buyout. However, if your vehicle has endured significant damages or repairs during your lease term, you may find it difficult to negotiate a good deal.

BMW lease buyout allows drivers to purchase their leased vehicle instead of returning it at the end of the lease term.
To determine if a BMW lease buyout is a good option, review your lease contract for terms and residual values and compare that to your car’s actual value.
BMW Finance Services offers options for financing a lease buyout, but you may find better deals at a bank or credit union.
When calculating your lease buyout options, it’s important to consider additional costs, such as registration,
car insurance
, and maintenance costs.

Lease buyouts: What you need to know

For those unfamiliar with

car leasing

, a lease essentially contracts drivers to use a vehicle for a specified lease period—usually around two to three years. When the lease period wraps up, you'll set up a

lease return

inspection to assess the vehicle's condition before the dealership takes it back.

Initiating a lease buyout allows the driver to purchase their leased vehicle instead of turning it in at the end of the lease. The buyout price will depend on its “residual value,” which factors in anticipated depreciation and is calculated at the start of the lease.

A lease buyout typically comes in one of two forms:

Lease-end buyout: Most commonly, drivers negotiate a lease buyout price when their lease period ends instead of turning their car in to start a new lease.

Early lease buyout: If you don’t want to wait until the end of your lease, you may be able to negotiate a car lease buyout before your lease term ends. However, buying out a car before the lease is over often involves additional fees.

MORE: BMW buying guide

How a BMW lease buyout works

If your BMW’s lease period is ending and you can’t stand the thought of returning it, here are the steps you should take:

Check your mail: BMW will send you a Lease End Mailer around 90 days before your lease term ends outlining your options for a new lease or buyout. You may also receive calls from BMW Financial Services and BMW Center.

Look over your lease contract: Usually, your leasing contract will state the vehicle’s estimated residual value. This number will be useful as you calculate costs for the buyout.

Head to your Account Details: Your payoff information is alternatively available on your

BMW online account

. Once you log in, head to Account Details to view the payoff price for your leased vehicle.

Secure financing: While you can receive financing from the BMW dealership, it’s always a good idea to compare

car loan

offers from at least three different lenders. If you’re pre-approved, this will also give you more leverage in your

buyout negotiations

Negotiate your lease buyout with your BMW dealer: Using the payoff price information, and possibly a pre-approved loan, speak with your representative to settle on payment terms.

Remember to calculate registration and insurance costs: While signing off on your BMW purchase is a momentous occasion—you’re not done there! You will then need to pay title and registration fees at the DMV and purchase state-approved

car insurance

coverage.

And voilà! You are officially the proud owner of a BMW. Just be sure to stay on top of your maintenance, registration, and insurance renewals to keep your vehicle road-ready for the years ahead.

MORE:

BMW resale value

Will BMW finance a lease buyout?

BMW Financial Services (BMWFS) is prepared to help you finance a lease buyout. However, BMWFS finance team may not have the best deal for you.

Before you sign any loan contracts, make sure you get finance offers from at least three different lenders to properly compare.

While financing through BMW may be more convenient, dealerships are notorious for charging a little extra. Car loans from a credit union or bank, on the other hand, don’t have the same incentives to charge you more and may have lower rates, lower monthly payments, or better terms to offer.

Is a BMW lease buyout worth it?

While BMW lease buyout options may seem like an easy and cost-effective route to car ownership, this isn’t always the case. It’s important to calculate the numbers yourself before jumping into any agreements.

How to calculate BMW lease buyout fees

The payoff quote for your BMW lease is fairly accessible online or by calling BMW Financial Services. But you can also calculate your buyout fees yourself.

To do this, track down your vehicle’s residual value on your lease agreement—typically this number was already estimated at the start of your lease. With that number on hand, use online resources to determine your vehicle’s actual value.

If your BMW’s actual market value is higher than its residual value, your vehicle is worth more than originally anticipated. In this case, you will enter negotiations for your lease buyout in a strong position.

If your BMW’s actual value is much lower than the residual value, however, it may not be a good financial decision to buy out your lease, as you will be paying extra to compensate for the difference. This typically happens when the leased vehicle has a lot of mileage on it or has received significant damages or has been in multiple accidents over its leasing career.

MORE:

How to calculate a car lease payment

When it’s better not to buy out a BMW lease

It may be best to walk away from buying out your BMW’s lease under these circumstances:

Your BMW has lost significant value since the start of the lease by needing frequent repairs or being involved in one or more accidents

Your heart is more set on a new BMW or another new vehicle

You’re having trouble getting approved for a low-interest rate loan

Buying out a lease isn’t for everyone. If you fall under any of these listed scenarios, it’s probably a better plan to just turn in your BMW and begin a new lease, or consider other car-buying options.

You may also want to

lease or buy

a new car or a different model altogether. At the very least, holding off on a lease buyout when you aren’t ready for it will give you more time to improve your credit score to get a better deal on payoff fees in the future.

MORE:

What’s the difference between leasing and financing a car?