Yahoo Autos Considering a Lease Buyout? Learn Everything You Need to Know About Carvana Lease Buyouts.
"Hearst Magazines and Yahoo may earn commission or revenue on some items through these links."
If you're wondering how a Carvana lease buyout works, you've come to the right place. Carvana, an online-only company, offers lease buyouts for drivers who want to get out of their leases early. If you have positive equity in your lease, Carvana may even allow you to put it toward purchasing a new or used car. Not all leasing companies allow a third-party dealer, such as Carvana, to buy out a lease, so reviewing your contract before requesting an offer is important.
Learn everything you need to know about Carvana lease buyouts, including how to decide if a lease buyout is the right option for you, the steps involved in the process, and what fees you can expect to pay. We also review a few reasons a lease buyout may be a good idea to help you determine if it's the right decision for your situation.
Interested In A Lease Buyout? Compare Auto Loan Rates Here
Carvana Lease Buyout Process
Here's what you can expect from the Carvana lease buyout process:
Check If Your Leaseholder Allows Third-Party Lease Buyouts
Not all dealers allow third-party lease buyouts. You can check your lease agreement or contact your leasing company to see if it allows them. Currently, Carvana doesn't buy out leases from the following companies:
Audi Financial Services.
BMW.
Ford Motor Credit.
GM Financial.
Honda.
Hyundai.
Nissan.
Southeast Toyota Finance.
Tesla.
Volkswagen Credit.
Volvo.
This isn't a complete list of excluded leasing companies, and more companies are regularly added. Find a complete up-to-date list by visiting Carvana.
Third-party dealer buyouts are not as common as they used to be. However, a global semiconductor chip shortage recently led to a short supply of new vehicles. This led to fewer vehicles in production, driving up average vehicle costs. Many dealers began excluding third-party buyouts in their lease agreements to help maintain their inventory of vehicles.
Other options may be available even if your leaseholder doesn't allow third-party lease buyouts. Most dealers allow you to buy out your lease. If you have the funds available or can obtain financing, you can request a buyout at the end of the lease. Once you've bought out your lease, you can transfer the title and registration to your name. From here, you can sell your vehicle online, in person, or through a third-party company such as Carvana.
Do Your Research
After confirming that your leasing company will allow you to sell your lease to Carvana, you'll need to find out your vehicle's residual and current market value. You can determine your car's market value by visiting Kelley Blue Book. You'll usually find your vehicle's residual value listed in the lease agreement.
Compare the current least buyout price with any offers you receive to decide if it's a good financial decision. Having a good idea of how much you owe versus the market value of your vehicle can help you determine if Carvana's offer is fair and worth considering.
Request a Buyout Offer
Once you have the information you need from your lease agreement, request a buyout offer from Carvana. Requesting an offer via Carvana is easy and fast, and you can do it online in a few minutes or less. You can request an offer using your license plate number and state or vehicle identification number. After Carvana locates your vehicle, you'll need to input the following information:
Mileage.
Zip code.
Color.
Transmission type.
Drivetrain type.
Vehicle features (e.g., wheels, tires, entertainment, and accessories).
Damages or necessary repairs.
Whether you plan to sell or trade in your vehicle.
You can also tell Carvana that your vehicle has an active lease agreement. It'll request information about your lease company, payoff amount, and monthly payment. Make sure to include accurate details on the overall condition of your vehicle and its accident history. Carvana may lower its offer price or void the lease buyout if the vehicle's condition doesn't match your description.
Review Your Payoff Quote
Carvana will provide a payoff quote that breaks down your offer amount compared with what's left on your lease. The quote will show whether you have negative or positive equity. Negative equity is when you owe more on your lease than the vehicle's market value. If this is the case for you, Carvana's quote will show the difference between the amount you owe and the vehicle's value. You'll have to pay this amount to complete the lease buyout.
Positive equity is when your leased car is worth more than you owe. In this case, Carvana may pay you the difference in cash or allow you to apply it to purchase a new or used car.
Carvana uses information from Carfax and AutoCheck by Experian to determine your offer. It's a good idea to compare your payoff quote from Carvana with a few other third-party dealers willing to buy out your lease. Request buyout offers from a few dealerships and credit unions. Choose the best offer based on fees, offer price, and ease of transfer.
Schedule Pickup and Transfer Payment
If you agree to have Carvana buy out your lease, you can begin the process by accepting its offer. From here, it''ll issue payment directly to either your finance company or you. Once you've paid off the lease, you can schedule a pickup date, and Carvana will come and pick up your vehicle. You'll no longer be responsible for the lease payments.
Carvana also offers the option to trade in your lease. This allows you to apply positive equity in your lease to purchase a new car. However, since Carvana doesn't offer leases, you can't roll your equity into a new leased car.
Your current least buyout price is good with Carvana for seven days. If you don't agree to the offer, the buyout price may change after the seven-day time limit based on current car prices and demand for your specific vehicle's make and model.
Is a Lease Buyout Worth It?
Whether or not a lease buyout through Carvana is worth it depends on your vehicle's residual value and condition and your plans after getting out of your lease. Reasons to consider a lease buyout through Carvana include the following:
You no longer want to make lease payments: A third-party lease buyout can be a great way to eliminate your monthly payments if you no longer need a vehicle.
You need a larger or smaller vehicle: Having Carvana or another third-party dealer buy out your lease rids you of your monthly payment, allowing you to buy or lease another vehicle if your needs have changed.
You'll owe excessive fees and penalties when you turn in your lease: Lease returns are often subject to fees and penalties. For example, your dealer may charge you an expensive per-mile fee if you exceed your mileage allowance. Dealers may also charge penalties for excessive wear and tear.
You have an in-demand vehicle: Some vehicles have high demand in the used car market. Carvana may be willing to pay more for these vehicles, especially if a customer is waiting for a specific make and model.
You have positive equity: If you have positive equity at the end of your contract period, a lease buyout may be a good way to earn money. Allowing Carvana to buy out a leased vehicle with equity could get you a great price on purchasing a new car.
Can You Negotiate a Carvana Lease Buyout?
Carvana's business plan doesn't include negotiations. While other dealers may be willing to negotiate your lease buyout, Carvana will not. The company has built its business plan on offering competitive prices without dealer fees so customers don't have to negotiate when buying or selling a car.
However, while you may not be able to negotiate with Carvana, you can always compare the buyout price you receive with other third-party dealers. If your dealership permits Carvana to buy out your lease, it'll likely allow another third-party dealer to do so, too.
Carvana Buyout Fees and Rates
Carvana doesn't charge a lot of extra fees like many car dealerships or financial companies, which is also why it's not willing to negotiate after offering a buyout price. Carvana has what it calls an out-the-door price, which means it offers straight, transparent, competitive prices without all the extra fees you may get at a dealership.
The only fees you can expect to pay with Carvana are sales tax and potentially a delivery fee. Sales tax is a fee added to the sale of goods or services. The sales tax rate you pay depends on your sales price and state. Carvana may also charge a delivery fee if it has to drive a long distance to pick up your vehicle.
Carvana lease buyouts can help you get out of your lease early or allow you to apply positive equity toward buying another car. Not all companies allow third-party buyouts, so you'll have to check your lease agreement before selling your lease to Carvana. Even if your lease contract prohibits you from a third-party lease buyout, you may be able to buy out the lease yourself and sell it once finalized.
You Might Also Like
