Want To Buyout Your GM Lease? Here's How It Works

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Learn how a GM lease buyout works - Car and DriverRaymond Boyd - Getty Images

If you're coming to the end of your General Motors (GM) lease, buying it out before or at the end of the agreement is one option you may consider. A GM lease buyout can be a good idea if you have positive equity, your vehicle is in excellent condition, and you no longer want to lease. However, before proceeding with a buyout, it's essential to determine how much your vehicle is worth and if the buyout price is fair.

GM no longer allows third-party buyouts, which may give you less negotiation power, making it even more important to calculate the associated fees to decide if it's worth pursuing a buyout option. We advise you to take your time, weigh the pros and cons of a lease buyout, and assess if this is the best way forward for you.

In this handy guide, we explain everything you need to know about the GM lease buyout process, including how to decide if it's worth it and what fees to expect.

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GM Lease Buyout Process

At the end of your GM lease, you have a few options, including:

  • Trade in your lease: You can return your leased GM car to the dealership and start a new lease agreement policy or buy a different vehicle.

  • Buy out your leased vehicle: You can buy out your lease at the end of its term by paying the buyout price, including its residual value, fees, and any sales taxes.

  • Return your lease: You can return your leased vehicle without purchasing or leasing a new vehicle.

  • Extend your lease: GM allows a one-month lease extension. However, it's important to note that this extension doesn't extend your mileage allowance.

Here is what you can expect from the GM Financial lease buyout process:

Check Your Lease Agreement

Most GM lease agreements include a buyout option. Review your lease agreement to identify the buyout price. If you can't find this information, contact GM Financial directly. You'll need your financial account number, vehicle identification number, and Social Security number. It's usually a good idea to start this process at least a few months before the end of your lease.

Determine Your Vehicle's Value

Finding out what your lease is worth can help you decide if it's a good decision to buy out your lease. You'll want to determine the car's residual and market values. The residual value refers to how much the leasing company has estimated the vehicle will be worth at the end of the lease period. You can usually get this information in your lease contract.

Find the car's market value using an online tool, such as Kelley Blue Book. Enter the key information, including your car's year, make, model, mileage, features, and condition, to get a more accurate estimate.

Compare the Buyout Price and Market Value

Once you have this information, compare the numbers to determine if a lease buyout is a sound financial decision. If your vehicle is worth more than the buyout price, buying out your leased car may be a good idea. However, if your car is worth less than the buyout price, you might prefer to consider other options.

Move Forward with the Lease Buyout

Notify GM that you plan to buy out your lease. You should also consider whether you'll pay with cash or seek a lease buyout loan. If you opt to finance the car purchase, shop around for lenders to get the best interest rate and terms. If you decide against a lease buyout, prepare your vehicle to turn it in at the end of your lease.

Is a Lease Buyout Worth It?

A GM lease buyout may be worth it if:

  • You have positive equity in your vehicle: Positive equity is when your vehicle's market value exceeds its buyout price. You could have positive equity if your vehicle is in excellent condition or the model is in high demand.

  • You love your vehicle: If you love your vehicle's make and model and don't want to trade it in for a new or different vehicle, a lease buyout may be your best option.

  • You have excessive damage or mileage: Dealers charge penalties for excessive wear and tear or mileage. A lease buyout allows you to avoid these fees.

  • You're way under mileage or the vehicle is in excellent shape: If you're significantly below your allocated mileage allowance or the vehicle is in excellent condition, there's a good chance it has positive equity.

A semiconductor chip shortage has led to vehicle shortages, helping leased vehicles to hold their value better. A lease buyout might be a good option as used car prices increase.

Can You Negotiate a GM Lease Buyout?

It's possible to negotiate a lease buyout with GM. However, with used car prices at record highs, GM is less likely to agree to a lower buyout price. Additionally, since GM dealers stopped allowing third-party buyouts, they may not be willing to negotiate.

GM offers an optional pre-return inspection. While this inspection allows you to understand your repair needs before turning in your lease, it can also help you determine your vehicle's condition and if it's worth buying out the lease. During the inspection, the dealership will evaluate the condition of the exterior, interior, tires, wheels, and mileage and determine if your vehicle needs excess repairs.

Even though GM is unlikely to negotiate the buyout price with lease customers, you may be able to get certain costs — such as the purchase option fee — waived.

GM Lease Buyout Fees and Rates

GM Financial charges the following costs when buying out a lease:

  • License and registration: You'll be responsible for the cost of licensing and registering to transfer the vehicle from the leasing company to you.

  • Taxes: All new and used car purchases are subject to taxes. How much you pay in state and local taxes varies depending on where you live. Five states impose no sales taxes.

  • Purchase option fee: GM may charge a purchase option fee for buying out your lease. You can usually find this price in your lease agreement.

  • Early buyout cost: GM Financial could also charge an early buyout cost if you request a buyout before the end of your lease agreement. This would include remaining lease payments and, potentially, other fees.

  • Vehicle cost: You'll also have to pay the vehicle's actual cost. The price you pay for your lease buyout is the residual value, which is the purchase price included in your original lease agreement.

GM won't usually charge a disposition fee for customers who buy out their leases. A disposition fee is a cost that dealers charge to prepare your vehicle for sale or auction. Buying out your lease also allows you to avoid certain fees you can be liable for with a lease turn-in, including excess wear and tear or high mileage.

If you love your GM vehicle and have positive equity in it, a GM lease buyout may be a good opportunity to keep it at an affordable price. However, we advise you to consider all aspects of this option before you proceed. This includes comparing the costs and fees of buying out your lease versus the costs of leasing or buying a new car to determine if a lease buyout is the right choice for you.

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