The term, car lease buyout, refers to the process of buying a vehicle that is currently being leased, or for which a lease has just ended.  It means that the lessee (person who is leasing) decides to purchase his leased vehicle before the lease ends, or at the end of the lease. The purchase is made from the lease finance company, not the dealer from which the car was first leased.

If the buyout is before the normal end of the lease, the lease company sets the purchase price based on the amount remaining on the lease plus the residual value of the vehicle as specified in the lease contract.

If the buyout is at the end of the lease, the purchase price is the purchase option price specified in the lease contract. There may also be a purchase option fee added.

The lease company is also required to collect sales tax (in most states) at the time of the purchase.

See our articles, End of Lease Options for more about a normal end-of-lease buyout, Car Lease Buyout – Good Idea or Not?, and Get Out of Car Lease for more details about early buyouts.