Lease buyout question

Hi, in a lease buyout does the buyout amount include the remaining payments on a lease or is it the buyout amount plus the remaining payments as well? I always thought that the buyout amount included the remaining payments as well but a BMW dealership is saying that it’s the buyout amount plus the remaining payments for a trade in value.

Thank you

It’s plus the remaining payment. You’re closing 1 loan to open another. Are you in the final 3 months?

Ok, thanks I still have more than 3 months but I was just curious. Thank you

I would wait until you are in the last 3 months. Typically receive a better buyout price.

Your payoff amount includes all remaining payments. It may even include sales tax under the assumption that you are buying out the car. A dealer will not have to pay sales tax, making the payoff lower in this scenario.

Ok, thank you do you know why a dealership would think it doesn’t include the remaining dealerships? I’m just trying to negotiate a trade in from kbb to the buyout amount but if dealerships are thinking it doesn’t include remaining payments then it makes it harder.

Stop using the word ‘buyout’ … there is (A) residual value which is set in stone on your contract, as the price at which you can buy the car at lease end, and (B) your current payoff, which changes every month based on how many payments remain.

Sorry about, thank you yeah I meant payoff amount

Sounds like you are using ‘buyout’ in your conversations with dealers which is creating this confusion

If a lender quotes you a payoff, everything is included. Just make sure tax isn’t included in the payoff unless you’re keeping it yourself. Sometimes the payoff is higher if a third party is paying it off. Sometimes it’s lower for a dealer of the same make. Ask.

Thank you, yeah I called chase and they said it’s actually a little cheaper if the dealership were to buy it out from them

Thank you max for this explanation. When you say that residual amount is set in stone, is it really? Because other people are saying the deal is better in the final 3 months. Do they mean only because there are less payments remaining (or zero)? So basically the payoff will always be at least that residual amount? Or does the dealer get scared in the final month of the lease term and drop even lower?

Yes, it is…


The residual is set in stone in the contract.

What does this mean? Hope you’re not confusing RV with the current payoff (which is typically RV plus remaining payments).