What is a lease buyout loan?

A lease buyout loan finances the residual value of your leased vehicle so you can keep it instead of returning it. The buyout amount is set in your lease contract — typically the residual value plus a small purchase fee. The new loan replaces the lease and you become the vehicle's owner.

Should I buy out my leased car?

Buy out the lease when the residual is meaningfully below current market value — common when used-car prices spike. Don't buy out when the residual is above market value, when you've exceeded mileage limits with no penalty exposure, or when you're not committed to the specific vehicle.

Are lease buyout rates higher than purchase rates?

Slightly. Lease buyouts are treated as used-car financing by most lenders, so APRs run 0.25-0.75 points above new-car rates. A few specialist lenders (LightStream, AutoPay, Caribou) offer competitive buyout-specific products.

Lease Buyout Loan Rates May 2026 — Compare Buyout APRs

Lender	Type	Min credit	Term	APR (from)
NA Navy Federal	Credit Union	640+	60 mo	5.59%	View →
PE PenFed	Credit Union	650+	60 mo	5.69%	View →
AU AutoPay	Refinance Marketplace	600+	60 mo	5.99%	View →
CA Caribou	Refinance Marketplace	630+	60 mo	6.09%	View →
LI LightStream	Bank (Online)	670+	60 mo	6.19%	View →

How a lease buyout works

Your lease contract specifies a residual value — the price the leasing company will sell you the vehicle for at lease-end. This is set when you originally signed the lease and is locked. To exercise the buyout, you either:

Pay cash for the residual plus the buyout fee (typically $300–$600).
Finance the buyout with a new loan — that's where lease buyout APRs come in.

Once funded, the leasing company is paid off, the title transfers to you, and you owe payments to your new lender like any other auto loan.

When the buyout is a great deal

The defining question is: does your contractually-fixed residual undercut the current market value of the vehicle?

Residual < market value: You're buying the car below what it would cost on the open market. Strong buyout case.
Residual ≈ market value: Neutral. Decision depends on whether you want to keep this specific car.
Residual > market value: You'd be paying above market. Better to turn it in and buy a comparable vehicle elsewhere.

Used-car price spikes (like the 2021–2022 cycle) made many leases hugely valuable to buy out. Watch KBB or Edmunds for current market value vs your residual.

Mileage and condition: do they affect the buyout?

No — and this is the underrated benefit. When you turn a lease in, you may owe overage charges for excess mileage ($0.15–$0.25 per mile over) and "wear and tear" charges for dings, scratches, and tire condition. If you buy out the lease, all of those charges disappear. The car is yours, condition and mileage immaterial.

For a lease that's 5,000 miles over the limit at $0.20/mile, that's $1,000 in avoided fees alone — sometimes enough to offset a slightly above-market residual.

Who offers competitive lease buyout APRs

Lease buyouts are a niche product. The lenders that publish competitive rates:

PenFed and Navy Federal — credit-union APRs that beat banks, especially for excellent credit.
LightStream — fast online process for 670+ FICO borrowers.
AutoPay and Caribou — refinance specialists that also handle buyouts. Useful if your credit is fair (600–660) and you want to shop multiple lenders with one application.

National banks (Chase, Wells Fargo, BofA) typically don't offer dedicated buyout products, though some will treat it as a regular used-car loan.

Lease buyout loan rates.

How a lease buyout works

When the buyout is a great deal

Mileage and condition: do they affect the buyout?

Who offers competitive lease buyout APRs