By Austin D., Lease Solutions
Four terms carry most of the weight: your residual value (the contract's projected end value), your payoff quote (the real, official price to buy the car by a date), equity (market value minus payoff), and the turn-in charges (disposition, mileage, wear) that only exist if you give the car back. Everything else below is supporting cast.
Lease buyout
Purchasing the vehicle you are currently leasing — with cash or a loan — so the lease ends and the car is titled in your name. Also called a lease purchase or lease-end purchase. The complete buyout guide →
Residual value
The vehicle’s projected end-of-lease value, set in your lease contract when you signed it. It is the starting point of your buyout price — but usually not the whole number.
Payoff quote (buyout quote)
The official, time-limited amount your leasing company requires to purchase the vehicle by a stated date. It can include the residual, remaining payments, a purchase-option fee, and taxes. Lenders base a buyout loan on this number, not on the residual alone. How the buyout price is calculated →
Purchase option fee
A fee some lease contracts charge for exercising your option to buy the vehicle, added on top of the residual value. It is set by your contract.
Lessee
You — the person who leases and drives the vehicle.
Lessor
The company that owns the leased vehicle and holds its title during the lease — a bank, a credit union, or a manufacturer’s finance arm. Your buyout is a purchase from the lessor.
Captive lender
A finance company owned by (or operating for) a vehicle manufacturer — the reason your lease paperwork may say a finance brand instead of the carmaker’s name. Many leases signed at dealerships are held by captives or their partner banks.
Equity (lease equity)
The difference between what your car is worth on the market and what it costs to buy it (your payoff). When the car is worth more than the payoff, that positive equity is value you keep by buying — and hand back by returning the car. Car equity in a lease →
Lease buyout loan
An auto loan used to pay the leasing company for the vehicle, ending the lease and titling the car to you with the lender as lienholder. It works like a used-car loan secured by the vehicle. How a buyout loan works →
Disposition fee
A fee your lease contract charges for returning the vehicle at lease end — part of the cost of walking away. At most lessors, buying the car means it never applies. Turn-in fees a buyout avoids →
Excess mileage charge
The per-mile amount your contract charges at turn-in for miles driven beyond your lease allowance. Like most turn-in charges, at most lessors it disappears in a buyout because there is no turn-in. What extra miles really cost →
Excess wear and tear
Damage beyond your contract’s definition of normal use — dings, tire wear, interior damage — billed after the turn-in inspection. At most lessors, a charge that only applies if you return the car.
Money factor
The lease world’s version of an interest rate, used to compute the finance portion of your monthly lease payment. It matters when you sign a lease; by buyout time, the number that matters is your payoff quote.
Capitalized cost
The vehicle value your lease was based on at signing — the lease’s equivalent of a purchase price, before fees and adjustments.
GAP coverage
Optional protection that pays the difference between what a totaled or stolen car is worth and what you still owe on it. Common on leases and on loans with little money down. GAP insurance explained →
Lienholder
The lender recorded on a title as having a security interest in the vehicle until the loan is paid. Finance your buyout and your new lender becomes the lienholder; pay the loan off and the title clears to you alone.
Electronic lien and title (ELT)
A state program in which titles with liens are held electronically between the state and the lienholder instead of as paper. In many lease buyouts there is no paper title to hand over — the transfer happens on state forms and electronic records.
Third-party buyout
An outside dealer or car-buying service purchasing your leased vehicle directly from the leasing company. Whether it’s allowed — and at what payoff price — depends on your lessor’s policy and your contract. Your own contractual right to buy the car is separate and typically protected.
Early buyout
Purchasing the leased vehicle before the scheduled end of the lease. Contracts handle this differently — the payoff can include remaining payments and fees — so the early-payoff quote in writing is the only number to trust.
Turn-in (lease return)
Returning the vehicle at lease end instead of buying it: inspection, disposition fee, any mileage and wear charges — and you still need your next car.
Doc fee (documentation fee)
A processing charge added by whoever handles transaction paperwork. Some states cap dealer doc fees; disclosure is what separates a legitimate fee from a surprise. What Lease Solutions charges, itemized →
Title transfer
The state process that moves legal ownership from the lessor to you after the payoff — forms, fees, and a deadline that varies by state (Idaho gives 30 days; California gives 10 after you receive the title). State guides: Idaho →
Sales/use tax on a buyout
Most states treat the buyout as a purchase and tax the buyout price, even though lease payments were taxed too — rates and collection differ by state, which is why the state guides exist. State guides: California →
Broker (auto finance)
A company that arranges financing through lenders rather than lending its own money. Lease Solutions is a broker: one application is compared across partner lenders, and the lender — not the broker — makes the credit decision. How we get paid →
Definitions describe standard industry usage — your lease agreement's own definitions control your contract. Financing is arranged through partner lenders; Lease Solutions LLC is a broker, not a lender. This page is general information, not financial or legal advice.