If you’ve fallen in love with your Toyota RAV4 or Corolla lease, you can purchase your vehicle with a Toyota lease buyout. But if the car needed a lot of repairs during your lease term, negotiating a good deal gets a lot harder.
QUICK LOOK
- A lease buyout is one lease-end option where you can purchase your leased car for its remaining value.
- Knowing your leased vehicle’s value will help you negotiate with your Toyota dealership during the buyout process.
- For a car lease buyout to be worth it, the actual value should be more than your residual value.
- A lease buyout may not be worth it if the vehicle has needed frequent car repairs or if your financing options aren’t ideal.
What is a lease buyout?
A lease buyout lets you purchase your leased vehicle for its remaining value instead of returning it at the end of the lease period. The “residual value” of the leased car is calculated at the beginning of the lease term based on expected depreciation.
There are two main types of lease buyouts:
- Lease-end buyout: This is the most common kind of buyout. Once the period in your contract expires, you can negotiate a purchase instead of turning the car in.
- Early lease buyout: You don’t have to wait until the end of your lease to buy your vehicle—but buying out your lease early comes with some challenges.
How a Toyota lease buyout works
If the end of your lease is approaching and your heart’s set on keeping your Toyota, here’s what you need to do:
- Check your lease contract and monthly statement. Your monthly statement may list a “payoff amount.” If not, look in your lease agreement for the stated residual value. These figures will help you estimate how much you’d have to pay to buy out your lease.
- Request a payoff quote. For an exact number, log onto your Toyota Financial Services (TFS) account or call 1-800-286-0652 for a buyout quote.
- Get pre-approved for financing. The dealership where you leased the car may offer financing, but it’s a good idea to compare offers from at least three lenders, including banks and credit unions.
- Negotiate a lease buyout with your Toyota dealer. Having financing pre-approval will help you bargain confidently for a good deal.
- Don’t forget to factor in registration and insurance fees. Once you’ve signed on the dotted line to purchase your Toyota, you’ll need to pay for a title transfer, vehicle registration, and ongoing insurance coverage.
How to calculate Toyota lease buyout fees
You can call Toyota Financial Services for a payoff quote—but if you’d rather not get on the phone, there’s a fairly easy way to calculate Toyota lease buyout fees.
Start by looking up your leased vehicle’s residual value: It should be listed in your contract, since that figure is estimated at the beginning of the lease term. Once you’ve got that number, use an online service to estimate your vehicle’s actual value.
Now compare those two numbers: Ideally, you want the actual value of your leased Toyota car to be higher than the residual value. That means your vehicle’s kept more of its value than anticipated, and it puts you in a strong position when it comes to negotiating a lease buyout.
If the actual value of the car is much lower: Maybe you’ve put a lot of mileage on the car, driven it in rough conditions, or been in an accident or two. In this case, a lease buyout may not be the best idea, since you could end up paying extra to cover the difference between the actual and residual value.
Is a Toyota lease buyout worth it?
If you’re leasing a Toyota that you’d like to own: A lease buyout might look like the perfect option—but don’t rush into paying off a lease until you’ve crunched the numbers and weighed all of your options.
Buying out your Toyota lease might not be worth it if:
- Your leased Toyota has been in multiple accidents, required frequent repairs, has excess wear, or lost a significant amount of value since the start of the lease
- You’d prefer a different model or more recent model year
- You can’t get approved for a low interest rate
Sometimes a lease buyout just isn’t meant to be. If you’re in any of the above situations, consider turning in the vehicle and starting a new Toyota lease, or simply returning the car and buying a new vehicle outright.
Waiting to buy out your lease gives you time to build your credit score so that you can get a better deal on any payoff fees.
Will Toyota finance a lease buyout?
You can work with your local Toyota dealer and Toyota Financial Services to finance your lease buyout, but it’s not necessarily the best deal. Before you accept any offer, compare at least three auto loan offers from different lenders.
Dealerships are often motivated to charge you more, while credit unions and banks may offer you slightly better terms based on an existing relationship or overall lower rates. It’s always worth comparing rates to find out where your profile fits the best.
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Licensed Insurance Agent
R.E. Fulton is an expert insurance writer specializing in car ownership topics from car shopping and loan advice to insurance and repair guides. R.E.’s mission is to create unique and accessible content that helps readers to become more successful and independent car owners. R.E. has written and edited over 900 high-performing articles for Jerry, with an average of 1 million+ views. As a senior writer on Jerry’s editorial team, R.E. draws on over 10 years of experience as a professional writer and digital publishing specialist. Prior to joining Jerry’s editorial team in 2021, R.E. worked as a writing coach at Columbia University, the Rochester Institute of Technology (RIT), and the University of Rochester. They serve as a managing editor for peer-reviewed history publication Nursing Clio, where their work has appeared regularly since 2015.
