Kinda stupid question, but there are so many "fine prints" when leasing a car.

Let's say I plan to buyout my leased car at the end of the 36-month term. My allowed mileage is 20,000 Km/year (60,000 Km/3-years).

At the end of the lease:

  • I used 70,000Km
  • I damaged the car (dent on 1 panel)

Will the dealer still charge me for excess mileage and for the damage ON TOP OF the residual value / buyout amount?


4 Answers 4


"Buying out a lease can be done to escape fees incurred by going over your yearly mileage allowance, but usually should not be done for this reason as you will likely end up paying more in additional depreciation fees." Source: http://www.carsdirect.com/auto-loans/lease-buyout-car-loans-good-idea

I would be surprised if the dealer even cares about seeing the car when you buy it out. Just send them a check.

  • I'm a new immigrant and my credit score is medium-low. All-in, the car is $30k. My credit score allows me to finance for only $20k. Dealer suggested to just lease for $20k then buyout in the end for $10k. Crunching numbers, they're practically the same total cash out whether finance or lease. Nov 1, 2014 at 5:21
  • 5
    If you really want to save money, but a one year old car.
    – RoboKaren
    Nov 1, 2014 at 15:24
  • 2
    Lease is not that different from financing. It is calculated based on the APR (money factor) too. So ask the dealer what's the APR on the lease and what's the APR on the loan. Lease will have some extra fees like acquisition fee so keep those in mind. On a personal note (as an immigrant to an immigrant) i'd say don't waste your money on interest paid to the bank. If you can't afford to buy this car with cash you can't afford this car.
    – Vitalik
    Nov 1, 2014 at 17:54

We don't know what you signed; we can't give you a solid answer.

Ideally, the dealer will either charge you for the value the car would have had if it wasn't damaged, or sell the car to you for its reduced value and charge you the difference. Either way, the damage you did doesn't affect their income.

But depending on how the contract is written, they might be able to charge you for the damage AND sell it to you for the original price.

Find your lease-to-buy agreement and see what it says. If in doubt, ask the dealer. If you don't like their answer you can try asking a lawyer.


I agree with @Vitalik's answer that the dealer will not likely need to see your car if you do a buyout.

But the particular quote he included from the (very informative) article he linked to, doesn't really apply to your case because you plan to buyout your leased car at the end of the lease.

Car Loan Requirements for Lease Buyout Loans

Buying out a lease can be done to escape fees incurred by going over your yearly mileage allowance, but usually should not be done for this reason as you will likely end up paying more in additional depreciation fees.

This only applies if you do an "early-buyout".

If you do the buyout at lease end, you have already paid for the depreciation of the vehicle. You would only have to pay the "residual value".

You should read the full article, but here is some useful information from it:

  • There are two types of lease buyouts: a lease-end buyout in which you purchase your car at the end of the leasing period and an early buyout in which you decide to purchase the car before the leasing period ends. (Early buyouts have additional costs like additional depreciation fees.)
  • A smart strategy is to let the lender contact you about a buyout, instead of the other way around. Let a leasing agent become a motivated seller, instead of giving the lender the impression you're a motivated buyer.
  • You will be expected to pay the residual value which was (should have been) stated in the original lease agreement.
  • You should consider what you would pay for exactly the same vehicle from a used car dealer. If it is significantly different from (less than) the projected residual value of your leased vehicle, the price should be adjusted accordingly. -You might be able to get a very good deal on a lease-end buyout because the dealer would have to spend a lot of time and money to get the car ready for resale, or else sell it at a wholesale auction. See if you can negotiate the purchase price down because of this. (Don't mention the mileage or the damage to try to get a lower price as it will not work in your favor.)

Their willingness to negotiate strongly depends on the market value of the car at lease-end and how popular that make/model of car is. If they feel they may have to hold on to the car for a while waiting for a buyer, and eventually sell it to a wholesaler, they will be more motivated to negotiate. If the car is very popular, they may not be willing to negotiate at all, but I don't think they can charge you more than residual value amount shown on your lease.

It could also be their policy to never negotiate the residual value.


Dealers may forgive excess mileage penalties (or reduce them) if you lease a new car from them. But be wary of the terms of the new lease because they may try to roll over those costs in your monthly payment. So if you go this route and get a new car, try to negotiate the new lease (if that's an option for you) as a totally separate transaction before disclosing and asking for forgiveness on excess miles.

And sometimes the residual value is already calculated at the time you lease the car, so check your paperwork and see if the buyout price was already determined.

And lastly, though it's rare, the residual buyout value is always negotiable. I was once able to buy out a lease at a significantly lower amount than the pre-determined residual value. (It was a tough negotiation, though, but that's another question/answer.)

  • So it makes more sense to lease+buyout a car that has a 'projected' high re-sale value? Like a Corolla over an Elantra? Nov 1, 2014 at 5:24
  • 1
    Not exactly. If you just want to lease a car and NOT buy it out, you want a high residual value because it lowers your lease payments. If you plan to buy out the car, it's usually better in the long run to finance/buy the car up front. I was trying to say in my answer that if you have already leased and want to buy out, it can't hurt to try to negotiate the buy out price. (Don't be surprised if they don't budge.) If you are buying it out, compare the buy out price to what a similar used car goes for.
    – Rocky
    Nov 1, 2014 at 19:11

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