 TITLE: Should You Buy Your Car When Your Lease Is Up? CONTENT: How Does a Lease Buyout Work?\n-----------------------------\nLike buying a car, leasing one typically involves making a large upfront payment and smaller monthly payments over the lease term (generally two or three years). The key difference is that a vehicle becomes yours when a loan is paid off, but you won't own a leased car when its lease is up. At the end of a lease, you return it to the lessor, who sells it through a dealership or at auction. They may also give you the option to buy it.\nA few months before your lease term ends, the leasing company will usually contact you to explain the end-of-lease process and schedule inspections before you turn in the car. This is a good time to start thinking about whether you want to buy your leased car. Don't tell the lessor your plans just yet, though—you'll need to do some research first.\nLease agreements typically list a purchase or buyout price. This cost is commonly a combination of the vehicle's residual value (the vehicle's projected end-of-lease value that's determined at the beginning of the lease) and a purchase option fee the leasing company may charge. Unfortunately, the lease payments you've made on the car don't go toward buying it, so you'll have to either come up with the cash on your own, or secure financing that covers the vehicle's buyout price. END