1. What Is a Lease With Option To Own?

A lease with option to own is a car leasing agreement that gives you the right to purchase the vehicle at the end of the lease term. The buyout price is typically the residual value plus any fees specified in your lease agreement.

2. How the Buyout Calculation Works

The calculator uses a simple formula:

Where:

• \( RV \) — Residual Value (predetermined value of car at lease end)
• \( Fees \) — Any additional purchase fees specified in lease

Explanation: This calculation determines your total cost to purchase the vehicle at lease end.

3. Understanding the Components

Residual Value: This is the estimated value of the car at the end of your lease term, set by the leasing company at the beginning of your lease.

Fees: May include purchase option fees, documentation fees, or other administrative charges for transferring ownership.

4. Using the Calculator

Tips: Enter the residual value from your lease agreement and any applicable fees. Both values should be in dollars.

5. Frequently Asked Questions (FAQ)

Q1: Is the buyout price negotiable?
A: Typically no, as it's set in your lease contract, but you can try negotiating with the leasing company.

Q2: What if my car is worth less than the residual value?
A: You might want to return the car instead of buying it, unless you're willing to pay more than market value.

Q3: Are there taxes on the buyout?
A: Yes, you'll typically need to pay sales tax on the purchase price when you buy the car.

Q4: Can I finance the buyout amount?
A: Yes, you can usually arrange financing through the dealer, your bank, or another lender.

Q5: What's the advantage of lease-to-own?
A: It lets you "try before you buy" and may have lower monthly payments than financing a purchase.