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Purchasing at the End of Your Lease

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Comments

  • ktremorktremor Posts: 2
    I have a 2005 Toyota Matrix Basic that has 34750 miles on it with the lease ending at the end of the month. The engine was replaced at 6,000 miles due to the careless work of an oil change company (Not replacing a $5 part correctly cost them $12K). The car has no damage, just normal wear and tear. I called the Toyota Financial Services and they said the payoff amount is $8,900. I am eliberating buying the car at the end of lease. We have put about $9000 into the monthly payments over the 36 months of the lease.

    The KBB suggested retail value is 15,795.
    The KBB private party value is 13,250
    The KBB trade in value 10550.

    I don't know much about cars and was wondering if it would be a good decision if the I bought it. Also if I do, does TFS ever negotitate the price they are willing to sell it for?

    Thanks for the help.
  • sebring95sebring95 Posts: 3,231
    I've never had TFS negotiate on my buyouts. Take it or leave it. Doesn't sound like you have too bad of a deal, but go to the "real world trade-in value" forum and see what it's REALLY worth on trade. KBB isn't always right. Or even close. If you can buy it for less than trade, it would probably be a good deal if you like the car. You might even be able to make some coin as opposed to turning it in, even if you didn't want to keep it. If you have positive value, that can be applied to a new/used care at trade-in time.
  • volvomaxvolvomax Posts: 5,274
    Car's prob worth $9000 on a trade.
    So, your buyout price is pretty good.
    Just have to decide if you want to keep the car.
  • I recently traded my Mazda for a Honda at the end of my lease. We called for a buyout and the dealership (Honda) wrote a check.
    I just recieved a bill from Mazda for the excess mileage, which i could understand if I had turned the car back in but it was purchased. My lease says nothing about paying for excess mileage when you purchase the car. I have traded in 3 previous cars by buying/trading in at the end of the lease and have never been charged excess mileage.
    What should I do?
  • dwynnedwynne Posts: 4,018
    Look at your Honda paperwork and see if they show that you traded in the car or not. If it is not shown as a trade then the dealer may have pulled a fast one on you.

    The car may not have been worth what the residual / buy out was on the lease so they may have just taken it from you and then turned it in "for you". Nice of them, wasn't it?

    I would call Mazda and ask them where the car is and who turned it in and to what dealership and ask who signed the odo statement, etc. It could be some kind of mistake, but if the car was returned at lease end to a Mazda dealership then you would owe for excess wear and tear and for over miles. Then you have to go talk to the Honda dealer to see what happened and try to get the money from them to pay what Mazda says you owe.

    Did you call Mazda to tell them what was going on after you "Traded" the car in? You should have. Keep in mind it is their car and you are / were just renting it, so once you did anything with it you should have called them and told them who had the car and what the deal was on it. Then follow up every day or two with the lease bank to make sure the car got paid off by the dealer. Then if anything goes wrong you will catch it right away and can start trying to fix it.

    I haved traded cars before the end of lease a couple of times and once dealer got the payoff, but didn't get around to paying for it for several WEEKS. I was worried another payment would come due before the dealer paid up - or that the payoff would no longer be good and I would owe the extra interest. I DID tell the lease bank that day that a dealer had purchased the car and offered to fax them a copy of the paperwork, then when the dealer was slow to pay they went after THEM and not me - though I was ultimately responsible for the car in any case.

    Dennis
  • pdfdgirlpdfdgirl Posts: 1
    Our lease term is up next March. I have a couple of questions I'd like to get some feedback on.

    1. Our car is in good shape and under mileage. But we have one small ding where someone opened their door and hit the car. What fees should we expect, and would it benefit us to have the ding fixed ourselves?

    2. We are looking at trading into a larger SUV (despite gas prices, we need to be able to tow). According to Edmunds the residual value is low on these, so the payments are higher than to purchase. We lease because we like to have a vehicle with a warranty. Is it wiser to lease and not risk being up-side down, or purchase now while there is good interest ?

    Thanks in advance for any thoughts.
  • dtownfbdtownfb Posts: 2,915
    With the current car market, you may be looking at this a bit premature. If it were me, I would definitely get the ding fixed before turning it in. I would consider buying a used SUV. Right now, you can find a late model SUV for well under book value on jsut about any used car lot. With gas prices likely to stay in the $3-$4.50 range for the foreeeable future, why get bogged down in another lease or long term financing in a vehivle that will be very difficult to unload? Take a look around your area and see how many people are trying to unload their SUV. Buy one that is 2-3 years old for about 50% of the MSRP.

    This car market and credit crisis is not the time to buy big not unless you can truly afford it.
  • dwynnedwynne Posts: 4,018
    Probably WAY too early to be worrying about it, since so much can change between now and March.

    In any case, who is your lease with? Most of the captive lease banks have "forgiveness" built into the turn in so you don't get hit with fees for dents and dings. Most 3rd party banks do not. When I had a BMW they mailed you a plastic gauge thing to measure scratches, dents, dings, interior holes, etc. If there were no more than x per panel or car and they were all smaller than the gauge measured for that item then no charge. Honda probably has the BEST forgiveness with up to $500 per "thing" and up to $1,500 per vehicle in forgiveness. Small paint chips and little dings are considered normal wear and tear and don't even count towards the money. I turned in my 05 S2000 with low tread on the rear tires (less then 4/32") and was charged nothing - even though new rubber from TireRack would have been $203 EACH plus shipping, mounting, and balancing.

    In any case, get a pre lease end inspection done and they will tell you what is "wrong" and how much, if any, they will charge you for turning it in with that defect. Then you have the option of getting it fixed at your expense or paying them after you turn it in. Be sure to point out the ding you know about so it will be noted and perhaps not charged for.

    I agree with your other reply, you might want to seriously look at a used SUV when the time comes if this trend continues. Folks are dumping them at big losses and car lots are overflowing with them - a super time to buy. That said, by the time March gets here the makers may be giving them away with huge incentives and cheap load and lease deals. Captive lease banks have residuals that do not have to echo real world expected prices - they can have low rates and high residuals to make low lease payments and move products. My wife's Pilot is leased at 0.31% effective finance rate. Over the course of the 3 year lease the interest we will pay is less than $200 - total. Now that is a cheap lease :D . Get a deal like that, and I would probably not bother with a used SUV.

    Dennis
  • artuartu Posts: 7
    Whats the best way to find out if I'm getting a good deal by buying a Honda Pilot at the end of the lease? Its an EX with navi & leather with 60,000 miles. The bank lease has a $ 15,000 buy option in August '08. Is that price negotiable? I feel hesitant because of the uncertainty regarding the value of suvs given current gas prices. Any guidance would be appreciated Art
  • volvomaxvolvomax Posts: 5,274
    What bank is the lease with?
    What year is the Pilot?
  • artuartu Posts: 7
    The lease is with U.S.Bank and the model year is 2003 Sorry about that Artu
  • dwynnedwynne Posts: 4,018
    Turn that baby in and run, don't walk, away from it. The trade value on a guzzling 03 Pilot with 60k miles is probably under 10k.

    I have had USB leases in the past and they use a 3rd party to handle the lease end and they do not (or did not) negotiate the buy out price and yours is WAY over the actual value of the Pilot.

    The current Pilot lease deals are not very good but would still be a better "deal" than paying nearly 2x what your used Pilot is worth.

    Anything is possible, USB may be so desperate to keep you from turning that Pilot in they will deal - but you are so far from the actual value that even if they dealt the price down you would still be overpaying for it.

    Dennis
  • volvomaxvolvomax Posts: 5,274
    dwynne is pretty close on his guess.
    03 Pilot ALL the money is $10,000
    Realistically, it would bring $8-9,000
  • emjulesemjules Posts: 3
    I have at 72 month lease on a Ford Expedition that ends in Mar '09.

    I am thinking about all of these for my next car:
    GMC Acadia/Saturn Outlook/Buick Enclave/Toyota Hybrid

    I have heard that some of these vehicles are hard to get lately, especially hybrids(waiting list).
    At which time should I start shopping for a new car? On my last leases, I went in a couple of months b/f the lease end and the dealers, of course had no problem "taking over" (read:putting it into the price of the new car) my lease payments for me so I could drive off in a new car that day. With SUV's and the gas prices lately, I have heard they are sitting on dealer lots, so I am wondering how hard it is going to be to unload the Expedition a little early-

    Any thoughts??

    Thanks,
    Jamie
  • volvomaxvolvomax Posts: 5,274
    Well, if all you are going to do is roll a payment or two in and return the truck to the lender that shouldn't be a problem.
    I wouldn't try to actually trade the truck in though.
    Why on earth did you do a 72 mo lease??? :confuse:
  • emjulesemjules Posts: 3
    I did a 72 mo lease b/c at the time, the payments for this type of lease were all I could afford monthly. The more you stretch it out, the cheaper the monthly pmt-

    It has been a LONG 6 years and I am itching to start looking!! I am used to 3 yr leases so this has been unusually long!!

    When should I start shopping if my lease is up in March?

    Also, someone opened their door into my drivers side door the other day and there is now a nice "ding" in it- do you know if I need to get that repaired b/f turning that in?

    Thx-
    Jamie
  • qbrozenqbrozen Posts: 17,226
    I did a 72 mo lease b/c at the time, the payments for this type of lease were all I could afford monthly.

    That just means you were looking at WAY too much vehicle, of course.

    With the resale of monstrous gas guzzlers like this, you are most likely stuck in it till the end of the lease, unless you want to roll the remaining payments into the next one. But I suggest you lie in the bed you made.

    As far as your ding, read your contract. It should state on there what exactly is allowed on the vehicle at turn in.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • volvomaxvolvomax Posts: 5,274
    I'd start seriously looking a month before the end of your lease.
    Now, if your lease ends in March, your last payment is due in Feb.
    So, once that payment is made, you can return the car.
    6 yrs is wayyyy to long to lease a car.
    I would probably not go any more than 3 yrs, even if you have to lease less car.
  • mlski96mlski96 Posts: 2
    Dear Dennis -
    Thank you for the info - you really opened my eyes to Honda's M.O. I think I'll just turn it in and buy a used Pilot of CRV when the time comes.
    mlski
  • ken1496ken1496 Posts: 11
    Thinking about purchasing VW Passat Wagon at the end of 36mo lease. Any feedback appreicated.

    TMV price $16,404 (does the cost include CA sales tax?)
    Purchase price $15,619 (all inclusive)

    VW Credit 6.34%
  • czallczall Posts: 3
    I have a 2005 Volvo xc90 2.5T awd. we have already decided to buy the vehicle our lease is up in two months. i have been negotiating with US Bank. one month ago they offered me the car for $22,700 and they said they would cancel my last three lease payments of $530 a month but i decided to wait and make another payment to see if their offer would go lower now their offer is $22,000 (again if i buy the car obviously i dont have to make the final two lease payments) so i actually saved money by making my lease payment since the price came down $700 but i had to pay the monthly payment of $530 so i saved $170. My question is should i do this again in otherwords if i wait until lease end to buy the car i will have to send them $1060 will the car come down in the price by that much in two months? US Bank says they are giving me the wholsale price and that the price will come down at lease end based upon the wholsale book so do i roll the dice hoping the price comes down by more than $1060 or do i take the deal now? Original MSRP on this car was $44,000. im just not sure if this car will decline in wholesale value more than $1000 over the next two months. any thoughts? thanks
  • sebring95sebring95 Posts: 3,231
    What was the original residual (buy-out) stated in the lease contract? Go to the "real-world trade-in value" forum and post your vehicle for a "real-world" wholesale quote. Gotta keep US Bank honest on their wholesale number! With the current market for SUV's in the tank, it very well could decline more than a $1,000 in two months!
  • dwynnedwynne Posts: 4,018
    I would compare the buy out price against Edmunds, KBB, and NADA prices but at the TRADE IN level and not retail pricing. You would have to ADD tax to the online trade values you find.

    Are you under miles and the car in great shape (no dents, dings, scratches) with good tread on the tires? in other words, if you turned it in would you have to pay in extra charges? If so, you take that amount and subtract it from the amount of the buyout.

    If buying your car would cost you about the same without taxes and after adjusting for end of lease charges as you could likely get for it trade in, then I would say that is a decent deal.

    You should be able to do better on the rate as well. If nothing else, spend $20 and join the Pentagon Credit Union. Last time I looked they were doing 4.5% but they have had lower rates.

    VW has not had a very good reliability record lately, but I would keep that in mind when deciding what to do.

    Dennis
  • dwynnedwynne Posts: 4,018
    Times must indeed be tough if USB is negotiating lease buy out prices way in advance. I fought with them over the value of a 2000 Corvette and we went down to the last day of the lease before they dropped the price (and gave me a free couple of weeks to find a buyer for the car).

    As you said, they dropped the price but you only saved $170. Sure they could make better offers in the next two months but after making your payment your net may not be much better.

    Get the value here from the "real world value" forum as user sebring suggested, then check for trade value at Edmunds, KBB, and NADA then go to the various online car sources (ebay, cars.com, autotrader.com) and see what folks are ASKING for the same vehicle (asking price does not equal selling price or value). If you have a Carmax or DriversWay in your area run by and see what they will give you for the car. It only takes a few minutes and it does not matter if you own it or not, they can still give you an offer.

    Between all those numbers you should get an idea if you are getting a fair deal or not. If you are, then I would say go ahead and take it. If not, then I would hold out for a better deal and if it does not come - then turn the car in and get something else. Never over pay for the lease buy out price, if the value is not there then turn it in - the beauty of the lease :D . I would assume you would have no turn in charges or extra mile charges or damages. If you do, then you have to factor those in to your price comparison.

    USB should offer you a discounted loan rate on the buyout as well, something cheaper than your bank or credit union offers. If they don't, ask them about that as well. PenFed is doing 4.5% for up to 60 months on used cars, so you can always go that route (if you plan on financing the buyout).

    Dennis
  • I have taken a 05 Acura MDX base model on 4K down $399/mo 36 month lease ($430/mo with tax). At the end of the term, I have an option to buy it for 22K.

    I like the SUV though It is bigger than what I need. I took it for skiing trips and it never had any problems.

    1) Is it worth it 22K (+whatever tax)
    2) If I return it, I would like to buy a mid range (about 24K + Tax) Honda CRV EX or Toyota Rav-4 . Would it make sense buying these..

    I am turning to you gurus for a real good advice.
  • volvomaxvolvomax Posts: 5,274
    1) Is it worth it 22K (+whatever tax)

    Nope.
    Wholesale is around $13-14,000
    So, its probably a $16-17k sale.

    2) If I return it, I would like to buy a mid range (about 24K + Tax) Honda CRV EX or Toyota Rav-4 . Would it make sense buying these..


    Define "make sense"
  • Quote :
    I have taken a 05 Acura MDX base model on 4K down $399/mo 36 month lease ($430/mo with tax). At the end of the term, I have an option to buy it for 22K.I like the SUV though It is bigger than what I need. I took it for skiing trips and it never had any problems.

    1) Is it worth it 22K (+whatever tax)
    2) If I return it, I would like to buy a mid range (about 24K + Tax) Honda CRV EX or Toyota Rav-4 . Would it make sense buying these..

    I am turning to you gurus for a real good advice.
    Replying to: hillybilly (Jul 24, 2008 2:34 pm)
    1) Is it worth it 22K (+whatever tax)

    Nope.
    Wholesale is around $13-14,000
    So, its probably a $16-17k sale.

    2) If I return it, I would like to buy a mid range (about 24K + Tax) Honda CRV EX or Toyota Rav-4 . Would it make sense buying these..

    Define "make sense"


    My alternative is a $24k new Small SUV and I save about 11 gallons a month vs MDX. I like both equally. Would it be economical to buy a new small suv instead of buying my MDX (say, the dealer agrees for 19k) considering Depreciation, Loan interest (0.9), and operating cost etc..

    Though it is in the contract that I have an option to buy this back at 22K,
    Is that negotiable.. (KBB Values - Trade-in 16K, Private party 20K, Retail 24K). What is the reasonable price to buy it..
  • volvomaxvolvomax Posts: 5,274
    Well, 11 gal/mo @ $4.00/gal is $44/mo.

    So, IF you can buy the MDX in the teens, you aren't saving any money buying a $24k SUV.
    How long would you keep the MDX vs the mini ute?

    Personally, I think that leasing a mini ute might be the smart thing to do.
    The entire SUV segment is in flux right now. It's hard to say how it will shake out.
    With a lease, you do have a get out of jail free card if the entire segment tanks.
  • kyfdxkyfdx Posts: 28,043
    I'd get a brand-new CR-V for $24K, before buying a 3 yr.old MDX for $19K... Having owned two CR-Vs (might be a little biased), I'll guess that the depreciation on the new one will be less than the used MDX, you'll use less gas, maintenance will be less.... and, you'll have a new car warranty....

    Just my $0.02,
    kyfdx
    visiting host

    MODERATOR
    Prices Paid, Lease Questions, SUVs

  • af1092af1092 Posts: 1
    Hi,

    The end of my lease is coming up on my 2005 Jeep Wrangler Sport. The lease was for 36k i will have about 39k when i turn it in and the buy-out value on it is $15,756.00 without takes another $1,100.00 about with taxes. The car is in excellent condition except for the soft top is torn about an inch in two places (i have the hard top as well) and there are two rings of glue stuck to the rear seats from duct tape that was squished in there. Besides for that there are no other problems with the car, not even a scratch or two. The trade-in value for an excellent condition is about 14,200.

    What are your thoughts?

    Thanks!
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