How a Tesla Lease Buyout Works

If your Tesla lease originated before April 15, 2022, and you didn’t lease a Model 3 or Model Y, you may be eligible for a lease buyout.
Written by Nathan Porceng
Reviewed by Jessica Barrett
Did you
lease your Tesla
before April 15, 2022? If so, you may be able to buy out your lease. Just be sure to compare your Tesla’s residual and actual values before you do.
  • Tesla drivers who leased their cars before April 15, 2022, may be eligible to buy out their leases.
  • The Tesla Model 3 and Tesla Model Y are not eligible for a lease buyout.
  • Tesla lease buyout can be financed through Tesla, but a loan from a bank or credit union may offer lower rates and lower monthly payments.

Lease buyouts: What you should know

The lease buyout process is fairly simple. A lease buyout is when you purchase your leased car for its remaining, or “residual value.”
Lease buyouts fall into two main categories
  • Lease-end buyout: When people talk about lease buyouts, they’re typically referring to lease-end buyouts. In a lease-end buyout, you wait until the term of your lease is over, then purchase the vehicle for its residual value.
  • Early lease buyout: While a little more complicated than lease-end buyouts, early lease buyouts allow you to purchase your leased car before the term of your lease is over.

How a Tesla lease buyout works

You probably noticed that used car prices have skyrocketed lately, which has prompted Tesla to make some changes to their lease buyout options. If you’re nearing the end of the lease for your Tesla, and you want to keep your car, there are a few things you need to know about eligibility:
  • Only Tesla drivers who leased a
    Tesla Model S
    or
    Tesla Model X
    before April 15, 2022, can buy out their leases.
  • Third-party dealerships and third-party individuals cannot buy out their leases.
  • Tesla Model 3
    and
    Tesla Model Y
    leases cannot be purchased. Tesla CEO, Elon Musk, says he plans to put these used electric vehicles to work in a new robo taxi fleet.
Be sure to read over your Tesla lease agreement to learn about your lease-end options. If you qualify for a buyout option, here’s what you need to do
  • Check the fees: A $350 purchase fee applies to Tesla vehicles leased after April 13, 2019. Local taxes and fees also apply.
  • Request an estimate: You can request an estimate through your Tesla account or the Tesla app. You will need to provide your registration address and title assignment before Tesla will provide you with an estimate. 
  • Use the Tesla app to confirm your intent to move forward: Once you have confirmed your intent to buy out your lease, Tesla will prepare a purchase packet for you. A vehicle inspection may be required depending on local regulations.
  • Send payment to Tesla: As soon as Tesla receives your payment for the full estimated amount, they will process your purchase and transfer your car’s ownership documents over to you. 
Congratulations! You are a proud used Tesla owner. 

Tesla lease buyout financing

You may be able to finance your lease buyout through your local Tesla dealer or Tesla Financial Services. However, it may be more expensive.
Even though Tesla follows a unique direct-to-consumer sales model, the automaker may still seek to maximize their profits by charging you higher interest rates. Therefore, you should also shop for
car loans
at banks and credit unions

Is a Tesla lease buyout worth it? 

Buying out your Tesla lease may sound exciting, but make sure you do all the math and consider all of your options before committing. 

How to calculate Tesla lease buyout fees

Tesla makes obtaining a payoff quote very simple with its online services at Tesla.com and the Tesla app. However, you can crunch the numbers yourself fairly easily.
First, check your car’s residual value: Leased vehicles’ residual values are calculated at the start of the lease term, and you should be able to find it listed on your contract. 
Next, estimate your car’s actual value using an online service: Ideally, your car’s actual value will be higher than its residual value. That means your car is worth more than anticipated, and you will be in a strong position when negotiating a lease buyout.
If you’ve driven your car more miles than anticipated or been in a car accident or two, your car’s actual value may be lower than its residual value. In that case, a lease buyout may not be the best idea, as you may be required to cover the difference.

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

You probably shouldn’t buy out your Tesla lease if
  • You want a new car or even a new Tesla
  • You can’t obtain approval for a low interest rate on your leased Tesla
  • You’ve driven your Tesla more miles than anticipated, driven it in rough conditions, or been in car accidents necessitating expensive repairs
If you fall into any of the above categories, you may want to look into the lease return process rather than trying to buy out your lease. This will allow you more time to build up your credit score and save for a good down payment, which could afford you the options of buying a different car or qualifying for lease deals on a new Tesla.
Jerry
saved me $80 a month! I have a Tesla Model Y and really wanted to lower my rates. And they did! I recommend you give this a shot!” —Nick M.
Make auto loan refinancing easy with PriceProtect™
Make auto loan refinancing easy with PriceProtect™
icon4.7/5 rating on the App Store | Trusted by 5+ million customers and 7 million cars
icon4.7/5 app rating | Trusted by 5M+ drivers
Reduce your monthly car payments in minutes?
Find out if Jerry can reduce your payments by an average of $150/month
Check your rate!

Easiest way to compare and buy car insurance

√
No long forms
√
No spam or unwanted phone calls
√
Quotes from top insurance companies
Find insurance savings