Lease Buyouts Explained: Radio Recording and Transcript with John Paul, AAA Car Doctor

In the following radio interview and transcript, Zander Cook from Lease End joins John Paul, the Car Doctor, to break down why more drivers are choosing to buy out their leased vehicles instead of returning them.

From saving thousands in hidden lease-end fees to keeping a car you know and love, Cook explains how Lease End simplifies the process with an online lease buyout platform that helps drivers secure financing and skip the dealership hassle.

Whether you’ve gone over mileage, have equity in your lease, or just want to avoid surprise charges, this episode explains how lease buyouts can put you back in control of your car—and your wallet.

Listen to the interview on Podbean. For the transcript, keep reading.

JP: Good Sunday morning, everyone. And welcome to another edition of the Car Doctor Program. Have you ever thought about leasing? You know, some people lease cars all the time. Some people don't. I have never leased a car.To me, leasing the car always sort of felt like you're going to have car payments forever, because most people lease and then they lease again, and then they lease again, and then they lease again, and they seem to have car payments forever.

But on the other hand, you can buy out your lease, but sometimes that gets complicated and confusing. And with us on the phone is Zander Cook from Lease End. Zander, good morning, and welcome to the Car Doctor Program.

ZC: Good morning. Thanks for having me.

JP: First off, tell us a little bit about Lease End and why you started it.

ZC: Yeah. So Lease End’s a really cool story. My family's actually been in the auto business for generations. My grandfather had car dealerships, passed them down to my dad. And I kind of grew up in the auto industry, and so I’ve been a car guy my whole life.We're based out here in the Mountain West area, out in the Utah and Idaho areas, in kind of a small town.

A few years back, back around 2021 or so, we were trying to find ways of growing our business and we were seeing a huge demand for lease buyouts in our area. A lot of people who leased a vehicle were coming back and they wanted to buy out their lease. Obviously, at that time, there was a lot of equity. Used car values had gone up a ton from COVID and the restricted new car supply.

And a lot of these people coming off their lease, their residual values were a lot lower than what their what their car was worth. And so we started helping a few people buy out their lease. And we saw that there was just a massive demand for lease buyouts and that, honestly, the lease buyout process was tough. You know, us sitting in a dealership. We weren't really built well to provide a really convenient experience for people who wanted to buy out their lease.

So me and my co-founder, Brandon Williams, we sat down and thought that if we could put some tech to the lease buyout process, we could make it online, smooth, and convenient, and make it so people didn't have to go back into the dealership or the bank or whatever they were currently doing to buy out their lease.

And so we started Lease End. And it's just been crazy. We help people throughout the entire nation, all 50 states, a ton of people in the Northeast, and it’s just been really cool to see the growth we've had over the last few years.

JP: Back up to what you said originally, that people are coming out at the end of a lease, right at COVID, and they're at the end of their lease where they had the option of turning in the car or buying it outright. They found out that because the used car values went up, and I'm just throwing a number out, they could buy out that lease for $20,000 but in reality, that car might be worth $25,000 or $28,000, right?

ZC: 100%. So you know the residual value when you lease the car originally, that's set when you sign contract. Look, the average lease is a three-year lease, for example. And so people coming off-lease in 2021 signed their contracts in 2018 and so when the leasing company set the residual values on those they were forecasting that the car would be worth $25,000, for example, in 2021, at the end of the lease.

And yeah—people were coming up, and the car was worth $35,000. In some cases, we saw people with 15, $20,000 in equity. It was amazing. And so instead of turning that back in and allowing the dealership or the leasing company to capture all that equity, leases have a buyout option. And so people really started choosing to exercise that buyout option. And so when you do that, you basically have an option to buy a car for $25,000 that's worth 40 or 35 or whatever.

Let's say you had a three-year-old used Hyundai Sonata.That same Sonata, that is the same as yours, a three-year-old with 30,000 miles on it, might be selling for $30,000 and you had an option to buy that for $25,000 so it was a really cool time.

And what we've actually seen is, over the last few years, the trend in lease buyouts actually hasn't slowed down.It’s just continued to continue to accelerate. A lot of people are still continuing to buy out their lease, and there's still a lot of equity even today.

JP: And one of the things about buying out your own leases, as opposed to, we'll use your Hyundai Sonata example, the Hyundai Sonata you own for three years, hopefully you've taken care of it, you service it where you were supposed to. You didn't crash it into anything. Versus that three-year-old Hyundai Sonata that's on a new or used car lot, you don't really know the complete history. Yeah, you could do CarFax and all that stuff, but you don't really know—did the person take care of it? Did they drive it reasonably? Whereas that car that you bought out at the end of your lease—you know everything about that car because you've been the only one in it.

ZC: Hundred percent.That's actually another reason we see a lot of people buy out a lot there. It's surprising. There's a lot of people who may not have a ton of equity. It may be thatthe Hyundai Sonata—they can buy it out for $25,000 and it's worth $25,000. We see a lot of people choose to exercise that buyout option for exactly what you just said—that they know the car. They essentially had a three-year test drive on the vehicle. They know they that they love it, they love the features. They know they haven't had any issues with it, and they don't want to go and roll the dice and gamble on some other used vehicle that they don't know the history on.

And they may not want to go and buy a new vehicle, because the prices of new vehicles have gone up so much that they don't want to see a payment increase. So we see people like that all the time, they choose to buy out their lease just because they know the car.

And you know, part of what we've done here at Lease End is make it super convenient as well, to where you don't have to go back into the dealership. A lot of people don't love that experience. And so if they can sit at home, buy out their lease and essentially purchase their next vehicle in 15 minutes on their own couch, on their own time, instead of having to go back into the dealership, and deal with turning that lease back in, test driving a new vehicle. A lot of people love that just for the convenience factor of it.

JP: And what happens, you know, a lot of leases, there's even some ultra-low mileage leases that are, you know, 7000 miles a year or something. What happens at the end of a lease? If you have a 10,000 mile per year lease, and at the end of that three years, you put 45,000 mileson the car, that's going to cost you money to turn it in. How does that affect the lease if you decide to buy it out?

ZC: So, you're walking right down all the reasons why people choose to buy out their lease. That's probably the third biggest reason we see people buy out their lease, is that they've gone over mileage, and so the average lease has about a 25 cent per mile overage. So let's say you go over by $10,000 miles, you're going to have a $2,500 penalty you'll have to pay at the end of the lease to turn that in.

What's really cool about a lease buyout is if you buy out your lease, that penalty for mileage overage goes 100% away. So you can completely avoid any turn-in fees, inspection fees, over mileage fees, by choosing to buy out your lease. And so we see a lot of people do that as well. They've gone over mileage they didn't expect to—they may have moved. They were expecting to put 10,000 miles a year on their on their car, and then they had to move, and they have a longer commute now, or for whatever reason, they ended up putting more miles than they expected.

And so instead of having to write that check and pay that penalty at the end, they just bought the lease. They still love their car, and they just continue to move along.

JP: And you know, the same thing with damage can sometimes get a little bit questionable. I remember years ago, BMW had a pretty good idea. They had something with like a credit card, and if there was a ding or a dent in the car, and you could hide it behind the credit card, there was no deduction for value. You own a car for three years, and especially if you live in the city or go shopping, you're going to get some dents and dings in the car.

And sometimes those dents and dings, the lack of value, I guess, is sometimes determined by the dealer, where you turn the car in, and that can make a significant difference if you were turning the car in at the end of the lease. But if you are buying at the end of the lease, then suddenly that is pretty irrelevant, right?

ZC: 100%.Same as the mileage overage. Dents, scratches, anything that you may get charged a turn-in penalty for at the end of the lease. All of that gets waived if you choose to buy out the lease, because you effectively own the vehicle now.You're taking all those dents, dings, and scratches, and you're choosing to own the vehicle with that. And so all ofthat gets 100% waived. Soyoudon't have to deal with the inspector.

We see that happen all the time where, you know, somebody looked to go turn in their lease and they were going to get hit with a bunch of wear and tear charges that they weren't expecting and that they didn't agree with.So they choose to buy out the lease, just to avoid that. And then, and then, you know, once you buy out the lease, you have full control.

If you want to buy it out, drive it for a couple months, and then at that point you decide you don't like it anymore, you own the vehicle at that point. So you can go trade it in on something else, or, you know, do whatever you want. So we really see a lot of people choose to buy out the lease just to take the pressure off. The lease has a hard term on it, of, you know, three years on average, and you have to make a decision with what you want to do with that lease by the end.

And so a lot of people will just buy out the lease just so they take the stress off and they can find a new vehicle on their own time and on their own terms and do it when they want to do it, instead of having this big deadline hanging over them to make a decision.

JP: And you know, the thing about maintenance recently, I've been seeing it more and more often, is the fine print in the lease says, well, the tires have to come back with, you know, a certain amount of tread. And you know, you drive 30 or 40,000 miles, that probably is going to happen. Suddenly, you're putting a couple $1,000 worth of tires on a car that those tires still may be good for another 15 or 20,000 miles.

ZC: Yep, it's 100% arbitrary. When you go back and turn in that lease, that inspector, it's just been our experience of whatever they expect. The inspector, if they woke up on the wrong side of the bed that morning, you know, you could be hit with more than you might expect. There's stories of people, exactly, on the tires, where it wasn't an issue, they went to turn it in, and they may have even had less tread than what it said in the fine print, and, you know, they were okay with it, and then others where they were just getting nickeled and dimed all over the place.

So, again, buying out your lease isn't for everybody, but it takes a lot of these unknowns out of the equation at the end of lease and really allows you to take control of the end of lease experience.

JP: Will your company help finance the payoff?

ZC: So we only help people who need to finance the payoff. So if you are in the position where you can just write a check for $25,000 at the end of your lease, then then we actually aren't much help.The main value add that Lease End helps you with is arranging financing. So most people, when they get to the end of their lease, they don't have $25,000 sitting in the bank to just write that check, and so that they need a loan.

And so we've partnered with the largest banks and credit unions across the US like Ally, Capital One, TD, PNC, you name them, and we partner with them, and we've created a really strong marketplace where they're effectively competing for these lease buyout loans.And because we have this competition market, we tend to get the lowest rates possible for our drivers.

And then we do that all on their behalf. We shop the loan forum. And it's super easy. You can sit at home and get a loan in 15 minutes. We handle all the paperwork. It's all digital signature that just arrives right in your email inbox you click through. And then we also handle all the DMV, the title transfer, depending upon the state we handle the registration. Each state handles that a little differently, but 95% of the time, you can avoid a trip to the DMV, and we just do that all for you.

JP: Is your fee baked into the loan?

ZC: Yes. So that's how we make money. We effectively make money in two ways. We charge a fee for our service, but we also get a commission from the banks. So most of our revenue is from the banks, because they want these lease buyout loans, and so they pay us to shop them around.

JP: And what is the fee?

ZC: It depends upon the state. So you guys, most of your audience is up in the Northeast there, our title fee will vary depending upon the state, depending upon the DMV, and the processes there, and then we charge a $799 documentation fee.

JP: And so when all of this happens, or I should back up a little bit, how soon does all this happen? If I'm on my couch, you know, watching, I don't know, the Red Sox play. And I decide, you know, my lease is coming to an end, and I want to buy out the lease. I go online, do what I do, arrange for a loan. How soon before I actually own the car?

ZC: So the record that we've set is nine minutes where we got a credit application in from a from a driver, we got approvals, they loved the approval, and we sent documents, and they were signed in nine minutes. That's our record. The average is the same day, though probably closer to less than an hour in terms of our time going back and forth with the banks and arranging paperwork and stuff like that.

It probably takes, on average, a couple hours if you're ready to go. The cool thing about the process, though, is we can do all that, and then you can choose if you want to do that today or whenever, it takes virtually no time at all from your end, it's just providing us some simple information, the credit application. And then, if you like the approvals, we just need simple documents like your driver's license and insurance. And then we send over an email package that you can go through in as little time as you want.

JP: And are there any manufacturers that require that you go back to the dealership to turn in the lease or turn in the vehicle? In other words, I went and bought a lease to Corvette, and you know, as part of the lease at the end, it says you have to bring back to the dealer, because obviously they want to try to lease you into another car and make sure they get that as part of their used car stock. Is there any manufacturers that really require that?

ZC: There actually isn't. So that's one of the things that really makes us mad, and it comes from the dealers and the manufacturers and the OEMs.There's this false perception that you have to go back to the dealer to do this, and you don't. There are even some certain dealers who will tell you this. We've heard this from the past, that for manufacturers in certain states that you have to go through the dealer. And that'sjust not true. There is not a single manufacturer where you must go back to the dealer.

But what's really cool about LeaseEnd is that we handle all of that. You know, if there's any weird things dealing with certain OEMs or dealerships, we handle all of that for you. So we truly make it so you can do this from your couch.

JP: Sounds nice and simple. Zander, if people want to get more information about Lease End, whether they have a vehicle that they're thinking about leasing and they're concerned about what happens at the end, or they have a car they're leasing now, and they're like, you know, I think I want to buy this car at the end. I don't have the $25K, $40,000 in the bank available right now that I can write a check for and I want to go through you guys. How do they find out more information about Lease End?

ZC: Yeah, so you can just go to LeaseEnd.com. One word, L, E, A, S, E, E, N, D.com. You can find out everything you want to know about us. There, you can also see if a lease buyout is a good option for you. We have awesome tools. We have payout payment calculators, payoff calculators. You can fill out the entire form there and do this. It's completely online.

We also have a huge team of financial specialists that you can call into and talk through your situation, see if a least buyout makes sense for you, and they can also walk you through the entire process over the phone. So really, however you want to work with us. We're happy to help you out.

JP: Now, you know, early on, we were talking about equity and loans, and this is where, you know, shine up your crystal ball a little bit, with potential tariffs coming up. That car that you're leasing now could be worth more if the tariffs kick in right?

ZC: 100%. Like, we're sitting here and forecasting this out a little bit, and we could see if these tariffs kick in like they're expected to, it could be just like COVID to point out all over again, where the value of used cars just goes through the roof.

And so that means anybody who leased a vehicle three years ago, two years ago, you've already locked in your residual and your buyout price. So if the price of used vehicles goes up, lease buyouts are just going to make more and more sense for everybody. So we're anticipating a continued rise in lease buyouts over the next few years, as the price of new and used vehicles just continues to increase.

JP: Have you ever seen a time where dealers, we'll say the lease buyout’s 25 grand, where the dealer wants that car so badly they're willing to pay it?

ZC: You know, yes, in one-off situations. That's what's interesting about the dealership model, right? Is each dealer operates a little differently. I have heard of one-off scenarios where there's been dealers who get aggressive and, you know, they'll pay to take the vehicle off your hands. But in terms of being a very common thing, that doesn't tend to be the case from what we see, but it definitely has happened as each dealer tends to operate a little differently.

JP: You know, we've said this in this program before, no matter what happens with everything, you can't make more used cars. You can't manufacture used cars. So used cars, typically, when new car pricing either goes up or, you know, new car volume goes down, used car prices go up.

So this could be an advantage to somebody that's at the end of their lease, they can buy out their car. All of a sudden, they have a car with a bit more equity in it than they planned on. And if they keep it for three or four more years, and things settle out, that car may be, in fact, worth more than they paid for it, and their trade in maybe more reasonable or four years than it is right now.

ZC: And like the point you made before there, there isn't a supply of used cars that are quality and that you know well. There's some serious value in you having driven this vehicle for three years, you know the car, you know it's good, and you love it. And so if that happens, if you love the vehicle, and you know it's been quality, it's been a great vehicle for you, you’ve maintained it well. And there's some equity there? A lease buyout makes sense 100% of the time for someone in that situation.

JP: So LeaseEnd.com is how you learn more about a pretty simple process. Figure out what you want to do, then decide from there, right?

ZC: 100%, super simple. That's our whole mantra, is we just try and make this as simple, fast, and convenient as possible. And to be honest, we've got this dialed in to where we can do this in as little as 15 minutes, or as long as 15 days, you can really move on your time. You take control and do this how you want to do it.

JP: Well, Zander, I want to thank you for helping educate us on what happens at the end of a lease. And thank you for taking a little time out of your Sunday morning and joining us on the Car Doctor Radio Program. We appreciate it.

ZC: Thank you.