Want to buy your GM lease? Here’s how it works

By | September 15, 2023

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Learn how GM lease buyout works: Car and DriverRaymond Boyd – Getty Images

If you’re nearing the end of your lease with General Motors (GM), purchasing before or at the end of the lease is an option you may want to consider. A GM lease may be a good idea if you have positive equity, your vehicle is in excellent condition, and you no longer want to lease it. However, before proceeding with the purchase, it is essential to determine how much your vehicle is worth and whether the purchase price is fair.

GM no longer allows third-party acquisitions, which could give you less negotiating power, making it even more important to calculate the associated fees to decide whether a buyout option is worth pursuing. We recommend that you take your time, weigh the pros and cons of a lease purchase, and evaluate whether this is the best option for you.

In this handy guide, we explain everything you need to know about the GM lease buyout process, including how to decide if it’s worth it and what fees to expect.

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GM Lease Acquisition Process

At the end of your GM lease, you have a few options, including:

  • Exchange your rental contract: You can return your leased GM car to the dealer and start a new lease policy or purchase a different vehicle.

  • Buy your leased vehicle: You can redeem your lease at the end of its term by paying the surrender price, including the residual value, fees and any sales taxes.

  • Return your rental agreement: You can return your rental vehicle without purchasing or leasing a new vehicle.

  • Extend your lease: GM allows a one month lease extension. However, it is important to note that this extension does not extend your mileage allowance.

Here’s what you can expect from the GM finance lease acquisition process:

Check your rental agreement

Most GM leases include a buyout option. Review your lease agreement to identify the purchase price. If you are unable to find this information, please contact GM Financial directly. You will need your financial account number, vehicle identification number, and Social Security number. It’s usually a good idea to start this process at least a few months before the end of your lease.

Determine the value of your vehicle

Finding out how much your lease is worth can help you decide whether it’s a good decision to purchase your lease. You’ll want to determine the residual and market value of the car. Residual value refers to how much the leasing company estimates the vehicle will be worth at the end of the leasing term. You can usually get this information in your lease agreement.

Find the car’s market value using an online tool, such as Kelley Blue Book. Enter key information, including your car’s year, make, model, mileage, features and condition, to get a more accurate estimate.

Compare the purchase price and market value

Once you have this information, compare the numbers to determine whether a lease buyout is a sound financial decision. If your vehicle is worth more than the purchase price, leasing your car may be a good idea. However, if your car is worth less than the purchase price, you may want to consider other options.

Move forward with the lease acquisition

Inform GM that you intend to buy out your lease. You should also consider whether you will pay cash or seek a buyback loan. If you choose to finance your car purchase, research lenders to get the best interest rate and terms. If you decide not to lease, prepare your vehicle for return at the end of your lease.

Is it worth buying a lease?

It may be worth purchasing a lease from GM if:

  • You have positive equity in your vehicle: Positive equity is when the market value of your vehicle exceeds the purchase price. You may have a positive net worth if your vehicle is in excellent condition or if the model is in high demand.

  • You love your vehicle: If you love the make and model of your vehicle and don’t want to trade it in for a new or different vehicle, a lease may be your best bet.

  • You have excessive damage or mileage: Dealers charge fines for excessive wear or mileage. A leasing buyout allows you to avoid these fees.

  • Your mileage is well under or the vehicle is in excellent condition: If you are significantly under your assigned mileage allowance or the vehicle is in excellent condition, there is a good chance it has positive equity.

The semiconductor chip shortage has led to vehicle shortages, helping leased vehicles better hold their value. A lease purchase could be a good option as used car prices rise.

Can you negotiate a GM lease?

You can negotiate a lease with GM. However, with used car prices at all-time highs, GM is less likely to accept a lower acquisition price. Additionally, since GM dealers have stopped allowing third-party acquisitions, they may not be willing to negotiate.

GM offers an optional pre-return inspection. While this inspection allows you to understand your repair needs before you turn in your lease, it can also help you determine the condition of your vehicle and whether it’s worth buying out your lease. During the inspection, the dealership will evaluate the condition of the exterior, interior, tires, wheels and mileage and determine whether the vehicle requires excessive repairs.

While GM is unlikely to negotiate the purchase price with lease customers, you may be able to get certain costs waived, such as the purchase option fee.

GM Lease Acquisition Fees and Rates

GM Financial charges the following fees when purchasing a lease:

  • License and registration: You will be responsible for the cost of the license and registration to transfer the vehicle from the leasing company to you.

  • Taxes: All new and used car purchases are subject to taxes. The amount of state and local taxes varies depending on where you live. Five states impose no sales tax.

  • Buy Option Fee: GM may charge a purchase option fee for the lease purchase. You can usually find this price in your lease agreement.

  • Advance purchase cost: GM Financial may also charge an early redemption fee if you request a redemption before the end of your lease. This would include remaining lease payments and potentially other expenses.

  • Vehicle cost: You will also have to pay the actual cost of the vehicle. The price you pay to buy out your lease is the residual value, which is the purchase price included in the original lease.

GM typically does not charge an arrangement fee for customers who purchase their leases. A disposition fee is a cost charged by dealers to prepare the vehicle for sale or auction. Purchasing your lease also allows you to avoid some fees you may be responsible for with your lease return, including excessive wear or high mileage.

If you love your GM vehicle and have positive equity, a GM lease can be a good opportunity to keep it at an affordable price. However, we recommend that you consider all aspects of this option before proceeding. This includes comparing the costs and fees of lease buyout to the costs of leasing or purchasing a new car to determine whether a lease buyout is right for you.

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