auto

How to get the best lease-buyout deal

Tara Baukus MelloQuestionDear Driving for Dollars,
I'm near the end of my lease and I'd like to purchase my car, with financing through the dealership. How do I get the best deal on a lease buyout?
-- Lilla

AnswerDear Lilla,
First, determine the value of your car by calculating the prices using Edmunds.com, NADAguides.com and Kelley Blue Book and print out the results from each site.

Compare the results to the buyout amount of your car, which is typically the car's residual value plus a purchase-option fee, to determine if the car's actual value is more or less than your buyout price. The residual value is the amount the car is worth at the end of the lease as determined by the bank at the time you entered into the lease. Both amounts will be listed in your lease agreement.

If your buyout price is lower than the car's actual value, you're in good shape, but you still may want to try to negotiate. If the buyout price is higher, then you can use the actual price data you gathered in your negotiations.

Next, research your auto loan options at local banks, credit unions and national lenders so you know whether the finance rate your dealer is offering compares with what you can get elsewhere. Then you'll know how to negotiate when it's time. You may want to wait until your leasing company contacts you to see if you're interested in buying the car. Ask them for the price and then turn them down, saying the price is too much (even if it isn't). They may come back with a better offer.

Bankrate's content, including the guidance of its advice-and-expert columns and this Web site, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this Web site is governed by Bankrate's Terms of Use.

Read more Driving for Dollars columns and Bankrate auto stories. If you have a car question, e-mail it to us at Driving for Dollars.

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