lease buyout. However, if your vehicle has endured significant damages or repairs during your lease term, you may find it difficult to negotiate a good deal.

Leasing a vehicle not only saves drivers money with lower monthly payments but also grants the freedom of driving a quality car without the commitment of true ownership. But in some cases, drivers may become attached to their leased vehicle, leading them to pursue official ownership through a lease buyout.

Ready to hold onto your leased BMW, but not sure what steps to take?

Jerry

, the trustworthy comparison tool for

car insurance

shopping, is here to guide you through it. From contract logistics to financing options, to how to find a good deal on

BMW insurance costs

after the fact, here’s how a BMW lease buyout works.

What is a lease buyout?

For those unfamiliar with car leasing, a lease essentially contracts drivers to use a vehicle for a specified lease period—usually around one or two years. When the lease period wraps up, you'll set up a

lease return inspection

to assess the vehicle's condition before the dealership takes it back.

Initiating a lease buyout allows the driver to purchase their leased vehicle rather than give it back when the lease period is ending. The price of the vehicle will depend on its “residual value,” which factors in anticipated depreciation and is calculated at the start of the lease.

A lease buyout typically comes in one of two forms:

Lease-end buyout: most commonly, drivers negotiate purchasing the vehicle when their lease period ends instead of turning their car in to start a new lease.

Early lease buyout: sometimes drivers don’t want to wait until their lease period ends to buy their vehicle—however, buying out a car before the lease is over can be a little more challenging.

How a BMW lease buyout works

If your BMW’s lease period is quickly coming to an end and you can’t stand the thought of returning it, here are the steps you should take:

Check your mail. BMW will send you a Lease End Mailer around 90 days before your lease term ends outlining your options for a new lease or buyout. You may also receive calls from BMW Financial Services and BMW Center.

Look over your lease contract. Usually, your leasing contract will state the vehicle’s estimated residual value. This number will be useful as you calculate costs for the buyout.

Head to your Account Details. Your payoff information is alternatively available on your

BMW online account

. Once you log in, head to Account Details to view the payoff price for your leased vehicle.

Secure financing. While you can receive financing from the BMW dealership, it’s always a good idea to compare

car loan

offers from at least three different lenders. If you’re

pre-approved

, this will also give you more leverage in your buyout negotiations.

Negotiate your lease buyout with your BMW dealer. Using the payoff price information, and possibly a pre-approved loan, speak with your representative to settle on payment terms.

Remember to calculate registration and insurance costs. While signing off on your BMW purchase is a momentous occasion—you’re not done there! You will then need to pay title and registration fees at the DMV and purchase state-approved car insurance coverage.

And voilà! You are officially the proud owner of a BMW. Just be sure to stay on top of your maintenance, registration, and insurance renewals to keep your vehicle road-ready for the years ahead.

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Will BMW finance a lease buyout?

BMW Financial Services is prepared to help you finance a lease buyout. However, they may not have the best deal for you. Before you sign any loan contracts, make sure you get offers from at least three different lenders to properly compare.

While financing through BMW may be more convenient, dealerships are notorious for charging a little extra. Car loans from a credit union or bank, on the other hand, don’t have the same incentives to charge you more and may have lower rates or better terms to offer.

Is a BMW lease buyout worth it?

While buying out your BMW lease may seem like an easy and cost-effective option for ownership, this isn’t always the case. It’s important to calculate the numbers yourself before jumping into any agreements.

How to calculate BMW lease buyout fees

The payoff quote for your BMW lease is fairly accessible online or by calling BMW Financial Services. But you can also calculate your buyout fees yourself.

To do this, track down your vehicle’s residual value on your contract—typically this number was already estimated at the start of your lease. With that number on hand, use online resources to determine your vehicle’s actual value.

If your BMW’s actual value is higher than its residual value, your vehicle is worth more than originally anticipated. In this case, you will enter negotiations for your lease buyout in a strong position.

If your BMW’s actual value is much lower than the residual value, however, it may not be a good financial decision to buy out your lease as you will be paying extra to compensate for the difference. This typically happens when the leased vehicle has a lot of mileage on it or has received significant damages or has been in multiple accidents over its leasing career.

MORE: How to calculate a car lease payment

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When it’s better not to buy out a BMW lease

It may be best to walk away from buying out your BMW’s lease under these circumstances:

Your BMW has lost significant value since the start of the lease by needing frequent repairs or being involved in several accidents

Your heart is more set on another or newer model

You’re having trouble getting approved for a low-interest rate loan

Buying out a lease isn’t for everyone. If you fall under any of these listed scenarios, it’s probably a better plan to just turn your BMW in and begin a new lease. You may also want to

lease or buy

another make or model altogether. At the very least, holding off on a lease buyout when you aren’t ready for it will give you more time to improve your credit score to get a better deal on payoff fees in the future.

MORE: What is a good interest rate on a car?

How to save on BMW insurance

While comparing and negotiating financing offers for your BMW lease buyout can be tedious, acquiring

car insurance

doesn’t have to be.

Jerry

can help! The app is free to use and in less than a minute pulls up the best quotes available to you from over 55 top insurance companies, making it easier than ever to save on

BMW insurance costs

. Once you find a policy you like, just select it through the app and Jerry’s expert brokers will help handle all the transition calls and paperwork.

You don’t have to worry about the usual hassles of comparison shopping either—Jerry will never sell your information to sales machines and we’ll never call you ourselves unless you want us to.

The best part? The average user saves more than $800 a year on car insurance, so it’s worth a look to keep that BMW protected for less.

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Jerry
, I only pay $56! I’m so happy.” —Ray T.

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