Your Lease Is Ending: Buy It, Return It, or Trade It?

Ninety days before your lease ends, you face a decision most people sleepwalk through: return the car, buy it, or use it as a trade. Sleepwalking is expensive. The right choice depends on one comparison, your contractual buyout price versus the car's actual market value, and the difference can be worth thousands of dollars in either direction. Here's the playbook I give everyone whose lease is winding down.

Start with the only number that matters

Open your lease contract and find the residual value, the price the leasing company set for the car at lease end, back when you signed. Your buyout price is that residual plus a purchase-option fee, usually $300 to $600, plus your state's sales tax.

Now get the car's market value three ways, the same way I recommend in my trade-in guide: a KBB Instant Cash Offer, a CarMax or Carvana quote, and retail listings for your exact car in your ZIP code.

The comparison sorts you into one of three positions:

Position	Meaning	Your move
Market value > buyout by class="relative z-10",500+	You have equity	Buy it or capture the equity in a trade
Roughly equal	No equity, no penalty	Decide on the car's merits
Market value < buyout	The bank overpriced the residual	Return it and walk away

That third row is underappreciated. A lease is a put option: if the car is worth less than the residual, that's the leasing company's loss, not yours. Hand back the keys with a clear conscience.

Option 1: return it

Returning is the default, and it's the right call when there's no equity or the car no longer fits your life. Know the costs:

• Disposition fee: $350 to $500, charged unless you lease or buy from the same brand again. It's in your contract.
• Excess mileage: typically 15 to 30 cents per mile over your cap. At 25 cents, going 4,000 miles over costs class="relative z-10",000.
• Excess wear: scratches beyond credit-card size, curbed wheels, bald tires, windshield chips. Each item bills at dealer repair rates.

Get the free pre-inspection. Every major leasing company offers a complimentary lease-end inspection 60 to 90 days out. Take it. It converts surprises into a fixable list, and fixing a class="relative z-10"80 wheel yourself beats a $450 charge on the final bill. Tires below 4/32" tread are the most common charge; a set of budget-brand replacements is usually cheaper than the penalty.

Option 2: buy it out

Buying your leased car is buying a used car with a known history: yours. You know every oil change, every curb, every quirk. That information is worth real money in a used market where every other car is a stranger.

Buy it when:

• You have equity. Buying below market value is free money, and you can keep the car or flip it.
• The car has been flawless. A trouble-free three-year-old car with maintenance history is exactly what used buyers pay a premium for. You get it at the contract price.
• You're over miles. Mileage penalties vanish when you buy the car. If you're facing a $2,000 overage bill, that's effectively a $2,000 discount on the buyout.

Financing note: you'll need a lease buyout loan, which most banks and credit unions offer. Rates run close to used-car rates, so get quotes before you talk to the dealer's finance office. And know your state's tax rule; a few states credit the tax you already paid on lease payments, most charge sales tax on the full buyout price.

One warning: dealers sometimes add "buyout processing" markups of $500 or more beyond the contract's purchase-option fee. Your contract price is between you and the leasing company. If a dealer inflates it, call the leasing company and ask to complete the buyout directly.

Option 3: trade the equity

If you have equity but don't want the car, you don't have to buy it to capture the value. Two paths:

1. Trade it at any dealer. The dealer pays off your buyout and credits the difference toward your next car. This works across brands, though some manufacturers restrict third-party dealer buyouts. Toyota Financial and Honda Financial have both limited them in recent years, so check whether your leasing company allows it.
2. Sell it to CarMax or Carvana, where allowed. Same math, cash instead of trade credit.

Third-party restrictions are the catch of the 2026 market. When the leasing company only allows the leaseholder or a same-brand dealer to buy the car, your practical move is often to buy it yourself, hold the title for the state-mandated minimum, then sell it. That adds tax and paperwork friction, so run the numbers before assuming the equity is fully capturable.

The 90-day timeline

• Day 90: Find your residual and purchase-option fee in the contract. Get three market valuations.
• Day 75: Schedule the free lease-end inspection.
• Day 60: Fix cheap wear items yourself: tires, wheels, glass chips, missing second key.
• Day 45: If buying, get lease-buyout loan quotes from a credit union and your bank.
• Day 30: If returning, book the return appointment and start shopping the next car. If trading, collect dealer offers against your documented buyout.
• Return day: Photograph the car inside and out, get a signed odometer statement and return receipt.

The lease-end decision is one comparison and a little discipline about deadlines. Do the math at day 90 instead of day 5 and you'll never hand equity back to a bank that was betting you wouldn't check. If you're heading into a new lease next, my leasing guide covers how to negotiate it properly from the start.