Leasing a Mercedes comes with many benefits, but if your lease is coming to an end, you may want to keep your car. A lease buyout lets you purchase your Mercedes before or when your lease ends. You’ll have to pay the residual value, which is a price that’s set at the beginning of the lease, and any other fees included in your lease agreement to buy out the lease.
To determine whether a lease buyout is a good idea, you’ll want to compare the residual value of your car to its actual cash value. If the residual value is higher than the actual value, a buyout may not be your best option. If the opposite is true and your car has a higher actual value than its residual value, a buyout could be the right move. Understanding how a Mercedes lease buyout works can help you decide if this is something you should consider.
Mercedes Lease Buyout Process
The first step in the Mercedes lease buyout process is to decide if you want to purchase your vehicle or return it and lease or buy something new instead. Many people choose to buy out their vehicle if they really like it or if they risk having to pay excessive fees when their lease ends.
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According to the Mercedes-Benz Financial Department, if you’re going to return your vehicle, you should start the process four months before your lease ends. This is because you need to have a vehicle pre-inspection conducted by a third party, and you’ll need time to review the inspection results. You can repair wear and tear before you return the vehicle if you want to try to avoid extra fees. Then when you’re ready, return your vehicle to the company, and within a few weeks, Mercedes-Benz will send you an end-of-lease statement detailing the charges that apply for mileage and wear and tear.
Drivers who want to purchase their Mercedes can decide between these two lease buyout options:
- Lease-end buyout: A lease-end buyout is an option for when your lease is up. You can opt to pay the residual value of the car to the leaseholder to purchase the vehicle. The residual price was set at the start of the lease and is the estimated value of the vehicle when the lease ends. Other costs, such as a purchase option fee, title transfer fee, and sales taxes, may also apply.
- Early lease buyout: Buying out a Mercedes lease early can be a good idea if you’ve racked up a lot of miles on your car and you’re at risk of having to pay hefty fees. It can also help if you’ve had to do several repairs to the vehicle or if it’s been damaged in an accident, as either situation will also result in extra fees when your lease ends. This option requires paying the typical lease-end costs, the remaining lease payments, and possibly extra charges.
You can talk to a loan provider if you need to finance the cost of your lease buyout. Many lenders are willing to provide a lease buyout loan if the deal is right.
After you choose the type of lease buyout you want and secure financing, you can schedule your lease buyout. Your local Mercedes dealer should be able to help you return your car or complete the buyout process. If you work with a loan company, they can work out the details once they know you have the option of a buyout and who the leaseholder is.
Is a Lease Buyout Worth It?
A Mercedes lease buyout can be worth it in the following situations:
- You really like the car and want to keep driving it.
- You’re at risk of having to pay high mileage fees when the lease ends.
- Your car has sustained a lot of wear and tear, so costly penalties will likely apply if you return it to the dealer.
- You kept the car in excellent condition and always took care of issues, so it’s in excellent condition.
- The car has a higher fair market value than what it costs you to buy out the lease.
- You have the cash to buy the car and you want it.
Many people decide they enjoy driving their leased car, so they opt for a buyout at the end of the term. Drivers who have gone over their mileage cap and anticipate having to pay hefty fees at the end of their lease may choose to buy out their lease early to avoid paying these charges.
There are times when a lease buyout may not be worthwhile, such as in the following scenarios:
- Your car has a higher residual value than it costs to buy it used from a dealership.
- You want the newest Mercedes model with all the latest features.
- You want to switch car brands and try something new.
- You don’t have the money to buy out the lease.
- You don’t qualify for a lease buyout loan.
Can You Negotiate a Mercedes Lease Buyout?
Most financial institutions will tell you that negotiating a lease buyout is possible, including Greenbush Financial Group — an investment advisory firm. However, negotiating a lease buyout can be more difficult than negotiating the purchase price of a new or used vehicle. The leaseholder sets the residual price of your vehicle, which is the price they think your car will be worth at the end of your lease, at the start of the contract, and this is the amount you’ll be expected to pay if you want to buy out your lease when the contract ends.
Although banks can misjudge the amount your car is worth, they’re usually fairly accurate. But if, for example, your car has a lease buyout amount of $20,000 but the car is only worth $15,000 when the lease ends, you may have room to negotiate. In contrast, if your car’s residual value is $20,000, but the car is worth $22,000 at the end of the lease, you won’t have any room to negotiate a lower price.
You can also try negotiating other costs associated with buying out your leased car. While costs such as taxes and title fees aren’t usually negotiable, you may have luck with certain other charges, such as the purchase option fee and documentation fee. You can also try to negotiate fees the dealership tries to charge you that aren’t included in your contract.
Mercedes Buyout Fees and Rates
Mercedes lease buyout fees and rates will vary depending on whether you opt for an early lease buyout or a lease-end buyout. If you wait till the end of the leasing term to buy your leased Mercedes, you’ll pay the residual value of the car. In some cases, you may be able to negotiate the buyout rate of the vehicle if it doesn’t match the fair market value of the car at the end of the lease.
Drivers who want to do an early lease buyout will be subject to other fees. While it depends on the terms of your lease, an early lease buyout may come with early lease termination fees. You’ll also need to pay the remaining lease payments in addition to the residual cost and other typical buyout fees, so an early buyout could be pretty expensive.
Make sure to calculate how much you’d pay in mileage fees and damage-related fees before you decide on an early lease buyout. You may or may not save by just purchasing the vehicle outright.
A Mercedes lease buyout is similar to any other lease buyout. Talk to your Mercedes dealer or the leaseholder to find out more about whether a buyout is the best option for you in your financial situation.
Finance & Insurance Editor
Ashley Donohoe has written professionally about business and finance since 2010 and has served as an expert reviewer since 2017. Her work has appeared on major websites such as Money.com, The Balance, and the Miami Herald. Having run her own business, she has broad expertise in taxation, financial management, accounting, and investments. Her educational background includes a B.S. in Multidisciplinary Studies, Master of Business Administration, and certifications in accounting and taxation.