Your Residual Isn't Your Payoff
Residual Value vs. Lease Payoff: Why the Numbers Differ
The residual value in your lease contract is rarely the check you write to buy the car. Here's what else goes into a real payoff quote.
Key takeaways
- The residual value in your contract is usually not the full amount you pay to buy the car.
- A payoff can add remaining payments, a purchase option fee, sales tax, and title or registration fees.
- Ask for an itemized payoff in writing, and compare that number, not the residual.
Full transcript
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This is the Lease End Minute. I'm Joe from Champion Auto Finance.
Here's a mix-up we hear all the time. Your lease contract lists a residual value, and a lot of people think that's the check they'll write to buy the car. Usually it isn't.
Your real payoff can include any payments you still owe, a purchase option fee, sales tax, and registration or title fees. That's why the number on your payoff quote is often higher than the residual.
So before you compare anything, call your leasing company and ask for the full payoff, in writing, with every fee listed. That's the number that matters.
Champion Auto Finance is not a lender. Approvals and terms are subject to lender underwriting.
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Champion Auto Finance
Thinking about buying out your lease? Learn more and get started at championautofinance.com.
Champion Auto Finance is a NJ DOBI-licensed financing partner, not a lender, coordinating lease buyout financing for drivers nationwide. Approvals and terms are subject to lender underwriting. Nothing on this site or in these episodes is legal, tax or financial advice.
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