Considering a Lincoln Lease Buyout? Here's What You Need to Know to Make Smart Financial Choices.

lincoln and the recording academy's chartyourcourse pre grammy event
How Does a Lincoln Lease Buyout Work?Michael Tran - Getty Images

Are you enjoying the luxurious driving pleasure of cruising in your Lincoln and feeling apprehensive about returning it at the end of your lease? That's entirely reasonable, and you have plenty of company.

Have you considered a Lincoln lease buyout? Some dealerships, such as Lincoln, allow you to buy your vehicle at the preset purchase price. Your lease contract usually stipulates this buyout value. It's sometimes possible to negotiate your lease buyout at the end of the lease.

If you do consider a lease buyout, you should know your numbers and conduct thorough research so you can make a well-informed choice. Buying a vehicle is a huge decision. First, before you finance your Lincoln lease buyout or pay cash, consider if doing so makes financial sense. It's essential to treat your lease buyout like any other vehicle purchase and investigate finance rate options and terms.

Purchasing A Lincoln? Compare Auto Loans Below

Understanding how a lease buyout works can help you decide if it's worth pursuing. This guide explains the Lincoln lease buyout process, discusses when it may benefit you financially, and provides tips on negotiating your buyout with the dealership. We also explore the fees and rates associated with buying out the lease on your vehicle.


Lincoln Lease Buyout Process

If you have a Lincoln Red Carpet Lease, you may purchase your vehicle before the lease expires or at the end of the lease. This purchase option is known as an early buyout or a lease buyout. The following are the steps involved:

1. Determine Your Lincoln's Residual Value

The residual value is the lease buyout price. This price is the predetermined worth of your Lincoln at the end of the lease term. Figure out your costs at least three months before your lease ends so you can plan financially. Determine the purchase price by checking your monthly lease statement, or navigate to the Lincoln site and sign in to your account manager to confirm the value remaining on the vehicle. You can also refer to your original lease agreement for the residual value amount.

It's possible that your electric vehicle (EV) won't qualify to be bought at the end of a lease period. Check the terms and conditions stated in your contract to confirm whether your EV qualifies for a lease buyout.

2. Schedule an Appointment with Your Lease Originator

Consider scheduling an appointment with your lease originator about two months before the lease termination to discuss purchasing your vehicle. The dealer can answer questions regarding your lease buyout residual value and explain end-of-lease fees and options. If you move to a new city and can't return to the location that originated the lease, you can negotiate your lease buyout with a Lincoln dealership in another location.

3. Arrange Vehicle Financing

When you purchase your Lincoln, you can settle the cost in cash or apply for a lease buyout loan. These loans provide the funds you need to pay for your lease buyout, but they may have higher interest rates than regular loans for new car purchases. Not all banks offer lease buyout loans, so check with your bank first and shop around.

4. Settle Financial and Lease-End Obligations

The last step is to settle the purchase price, remaining lease payments, sales tax, title transfer fee, registration fee, and any other lease buyout costs. Settle all financial obligations before the lease end to avoid late fee charges. You'll need to visit a Lincoln dealership to handle the lease buyout transaction.

One benefit of a lease buyout is that you won't have to complete a vehicle inspection or wear and tear assessment to qualify for a buyout. Although Lincoln doesn't require an excess mileage calculation for a lease buyout, the law requires you to sign an odometer reading.

Is a Lease Buyout Worth It?

So you've decided you can afford the residual value and other costs associated with your Lincoln lease buyout, but is the cost worth the trade? Here are a few things to consider if you plan to hold on to those car keys:

  • Timing of the buyout: Review the terms of your lease agreement to confirm that there are no penalty fees for an early buyout. Consider the remaining lease payments you'd have to pay, too.

  • Financing the buyout: Auto lease buyout loans can attract higher interest rates than new car loans. The annual percentage rate can vary widely by lender and credit profile, so shop around.

  • Value of the vehicle: Assess your Lincoln's mileage and wear and tear. Compare the condition of your car with similar models and measure up the buyout price against the market value of comparable vehicles.

  • Cost of maintenance: Consider maintenance costs over and above financing the purchase price when you prepare your budget.

If you love your Lincoln and can snatch a great deal that fits your budget, a lease buyout may be worth it.

Can You Negotiate a Lincoln Lease Buyout?

With lease agreements presetting vehicle buyout values, there's little wiggle room for negotiating the residual value. Some companies are open to negotiating fees and incentives. Here are some negotiation tips for your Lincoln lease buyout:

  • Level of interest: Don't let the dealership know how much you want to hold onto your Lincoln. Do your research early and wait for the lease originator to contact you.

  • Price comparison: Compare the residual value with current market prices. If the purchase price of your Lincoln is higher than market-related prices, you may have some negotiating power.

  • Time of year: If, for example, your lease expires during the winter months when the dealership is quiet, stock is high, and the dealer has targets to meet, you may have more negotiating power.

  • Incentives and discounts: Ask the dealership to consider purchase incentives or financing discounts. It's never a bad idea to ask for a better deal.

  • Vehicle comparison: Compare vehicle inventory in similar condition elsewhere and inform the dealer that you are shopping for the best deal. They may offer you an incentive if it isn't the best time of year for car sales.

Lincoln Buyout Fees and Rates

Lincoln Automotive Financial Services only charges a disposition fee if you hand your vehicle back. Also called a turn-in fee, a disposition fee covers costs essential to the return of a car, such as reselling your Lincoln. This fee is typically between $300 and $400.

Although Lincoln doesn't charge a turn-in fee for lease buyouts, it is the policy for the customer to pay sales tax and title and registration fees. As sales tax rates vary between states, search for the applicable rate on your state's government website or department of motor vehicles' website. Penalty fees may also apply if you buy out your lease too early.

If you need vehicle financing, your lease originator may offer to finance your purchase. Lincoln Automotive Financial Services charges a lease buyer credit application fee of $75. Contact multiple lenders and compare rates and terms between lenders to find the deal that best suits your budget. You have up to 14 days to shop for rates without negatively impacting your credit score.

There's much to consider before opting for a lease buyout. So research and evaluate your financial options to ensure you're negotiating the best deal at the right time. A Lincoln lease buyout is worth it if you love your car and can afford the deal you negotiate.

You Might Also Like