What Is a Lease-End Purchase Fee?

A Lease-End Purchase Fee, also known as a purchase option fee, is a charge imposed by the lessor (the entity providing the lease) when the lessee (the person leasing the vehicle) decides to exercise the purchase option and buy the leased vehicle at the end of the lease term. This fee is separate from the Buyout Price and is typically outlined in the lease agreement.

Explanation: The Lease-End Purchase Fee is an additional cost incurred by the lessee when choosing to become the owner of the leased vehicle at the conclusion of the lease period. It is distinct from the Buyout Price, which represents the agreed-upon cost of the vehicle itself. The Lease-End Purchase Fee is essentially a service fee or administrative charge associated with finalizing the purchase transaction.

Examples: Let us say you have been leasing a car for several years, and your lease agreement includes a Buyout Price of $20,000 if you decide to purchase the vehicle at the end of the lease term. Additionally, the lease agreement stipulates a Lease-End Purchase Fee of $500.

If you choose to exercise the purchase option, you will need to pay the Buyout Price of $20,000 plus the Lease-End Purchase Fee of $500, resulting in a total amount of $20,500 to acquire full ownership of the vehicle.