Considering a Lincoln lease buyout? Here’s what you need to know to make smart financial choices.

By | September 15, 2023

Lincoln and the Recording Academy's Chartyourcourse pre-Grammy event

How does a Lincoln lease buyout work?Michael Tran – Getty Images

Are you enjoying the luxurious driving pleasure of traveling in your Lincoln and feeling worried about returning it at the end of the lease? It’s totally reasonable and you get plenty of company.

Have you considered purchasing a Lincoln lease? Some dealerships, like Lincoln, allow you to purchase your vehicle at a preset purchase price. The lease agreement usually provides for this surrender value. Sometimes it is possible to negotiate a lease purchase at the end of the lease.

If you’re considering a lease purchase, you should know your numbers and conduct thorough research so you can make a well-informed choice. Buying a vehicle is an important decision. First, before you finance your Lincoln lease acquisition or pay cash, consider whether doing so makes financial sense. It is essential to treat your lease purchase like any other vehicle purchase and investigate financing rate options and terms.

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Understanding how a lease works can help you decide whether it’s worth pursuing. This guide explains the Lincoln lease acquisition process, discusses when it can benefit you financially, and provides tips on how to negotiate your purchase with the dealership. We also explore the fees and charges associated with purchasing a lease on your vehicle.

Lincoln Lease Acquisition Process

If you have a Lincoln Red Carpet lease, you can purchase your vehicle before your lease expires or at the end of your lease. This purchase option is known as an early buyout or lease buyout. Below are the steps involved:

1. Determine the residual value of your Lincoln

The residual value is the redemption price of the lease. This price is the predetermined value of your Lincoln at the end of the lease term. Calculate costs at least three months before your lease expires so you can plan financially. Determine your purchase price by checking your monthly lease statement or go to the Lincoln website and log in to your account manager to confirm the value remaining on the vehicle. You can also refer to your original lease agreement for the residual value amount.

Your electric vehicle (EV) may not be eligible for purchase at the end of the lease term. Check the terms and conditions stated in the contract to confirm whether your electric vehicle is eligible for a lease.

2. Make an appointment with the person who originated the rental agreement

Consider making an appointment with the lease originator approximately two months before the lease expires to discuss the purchase of your vehicle. The dealer can answer questions about the residual value of your lease and explain your end-of-lease fees and options. If you move to a new city and cannot return to the location where the lease originated, you can negotiate a lease purchase with a Lincoln dealer in another location.

3. Arrange vehicle financing

When you purchase your Lincoln, you can pay off the cost in cash or apply for a buy-back loan. These loans provide the funds needed to pay for your lease purchase, but may have higher interest rates than regular new car loans. Not all banks offer buy-to-own loans, so check with your bank first and shop around.

4. Settle financial and end-of-lease obligations

The final step is to pay off the purchase price, remaining lease payments, sales tax, title transfer fee, registration fee, and any other lease purchase costs. Pay off all financial obligations before the end of the lease to avoid late fees. You will need to visit a Lincoln dealership to handle the lease buyout transaction.

One of the benefits of a lease buyout is that you will not need to complete a vehicle inspection or wear and tear assessment to qualify for a buyout. Although Lincoln does not require excess mileage to be calculated for a lease, the law requires you to sign off on an odometer reading.

Is it worth buying a lease?

So you’ve decided you can afford the residual value and other costs associated with purchasing your Lincoln lease, but is the cost worth the trade? Here are some things to consider if you plan to keep your car keys with you:

  • Acquisition timing: Review the terms of your lease to confirm that there are no penalties for an early purchase. Also consider the remaining rent you would have to pay.

  • Acquisition financing: Car lease purchase loans can attract higher interest rates than new car loans. The annual percentage rate can vary greatly based on the lender and your credit profile, so shop around.

  • Vehicle value: Evaluate the mileage and wear of your Lincoln. Compare the condition of your car with similar models and compare the purchase price to the market value of comparable vehicles.

  • Maintenance cost: Consider maintenance costs in addition to financing the purchase price when preparing your budget.

If you love your Lincoln and can get a great deal that fits your budget, it may be worth purchasing a lease.

Can you negotiate a Lincoln lease purchase?

With leasing contracts pre-setting vehicle buyback values, there is little wiggle room to negotiate residual value. Some companies are open to negotiating commissions and incentives. Here are some tips for negotiating your Lincoln lease buyout:

  • Level of interest: Don’t let the dealership know how long you want to hold on to your Lincoln. Do your research ahead of time and wait for the lease writer to contact you.

  • Price comparison: Compare the residual value with current market prices. If the purchase price of your Lincoln is higher than market prices, you may have some negotiating power.

  • Period of the year: If, for example, your lease expires during the winter months when the dealership is quiet, inventories are high and the dealership has goals to meet, you may have more negotiating power.

  • Incentives and discounts: Ask the dealership to consider purchase incentives or financing discounts. It’s never a bad idea to ask for a better deal.

  • Vehicle comparison: Compare inventory of vehicles in similar condition elsewhere and let the dealer know you’re getting the best deal. They may offer you an incentive if it’s not the best time of year for car sales.

Lincoln Acquisition Fees and Fees

Lincoln Automotive Financial Services only charges a disposal fee if you return your vehicle. Also called a surrender fee, a disposal fee covers the essential costs of returning a car, such as reselling your Lincoln. This fee is typically between $300 and $400.

While Lincoln does not charge delivery fees for lease acquisitions, it is common practice for the customer to pay sales tax, title and registration fees. Since sales tax rates vary from state to state, look up the applicable rate on your state government website or the Department of Motor Vehicles website. Penalties may also apply if you purchase your lease too early.

If you need financing for your vehicle, the leasing company may offer to finance your purchase. Lincoln Automotive Financial Services charges a $75 lease buyer credit application fee. Contact multiple lenders and compare rates and terms between lenders to find the deal that best fits your budget. You have up to 14 days to shop rates without negatively impacting your credit score.

There is a lot to consider before opting for a lease. So research and evaluate your financial options to ensure you negotiate the best deal at the right time. A Lincoln lease is worth purchasing if you love your car and can afford the deal you negotiate.

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