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Purchasing at the End of Your Lease

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  • Hello everyone ,please help! I am half way done with my lease and I'm already at my max mileage. At the end of my lease should I purchase my car to avoid all the mileage overage charges?
  • sebring95sebring95 Posts: 3,225
    Depends. If the difference between the buy-out and market value is less than the mileage charge....then buy it out. Pretty hard to predict that at this point.

    I would recommend you make payments to your savings account equal to your monthly mileage x the overage rate. Then it won't be a scramble on the tail end.
  • dwynnedwynne Posts: 4,018
    I agree with sebring, start saving now to pay the over mile charges at the end. Buy it out only if you want it and it makes sense, otherwise pay the charges.

    You can also try to sell it now to a dealer (like Carmax) if it is worth close to buyout value on the lease. It might cost you to get out of it but that may be cheaper than keeping on driving it and paying the penalty. High mile drivers should not do leases, in general :D
  • Sorry if i repeat anything anyone was talking about but I joined this discussion late.

    So in my scenario I am two months before the end of my lease, my 2008 GMC Acadia is worth about a $1000 more than the ballon payment (per Kelly Blue Book) but I am over mileage to the tune of $5000, if I trade my car towards the purchase of another car other than GMC and they give me what is owed on the car then would I still have to pay that mileage?

    I am just trying to figure out what ways other than purchasing the vehicle to get away from paying the mileage?
  • sebring95sebring95 Posts: 3,225
    As long as you don't return the vehicle at the end of the lease, you won't have to pay the mileage fee. You can trade it anywhere you want (essentially the dealer is buying out your lease) or you can buy it out yourself. I have seen some GM leases (assuming it's GMAC/Ally) that have more favorable buy-out terms if it's being bought-out by a GM dealer.
  • Hi, My lease is up on my Honda and I want to buy it out. Mileage is well below what the lease allowed, very good shape, only about 20K miles on it. I've heard that Honda does not negotiate the residual value currently listed. Is this true, and can anybody offer some insights in negotiating my terms and payments?
  • isellhondasisellhondas Issaquah WashingtonPosts: 17,346
    Coming in late here...

    The residual is set in stone as it should be.

    You can probably finance it through a local bank. If you have the dealer do this for you, you will be charged a fee. Just do this yourself!
  • I just recently had a Chrysler dealer do a payoff on my Rav 4 lease that had low miles on and quite a bit of equity (I know this is rare), I contacted Toyota and they said the dealer would have me sign buyout paperwork which they did but I'm concerned about the check Chrysler is cutting, it was for the exact amount of the car buyout but without tax, when I questioned this because I knew that I would have to pay tax if I bought it from Toyota they said that dealers are exempt from having to pay the tax. I can't get in touch with Toyota until after the holiday weekend but now I'm really questioning this. Does anyone know if a dealer has to pay tax on a lease buyout just like I would if I would have bought it? NY resident.
  • sebring95sebring95 Posts: 3,225
    Since the dealer is buying it out, they would not pay sales tax.
  • czar4czar4 Posts: 20
    I understand in some states there is dealer pass-through when you want to sell a car privately but recoup sales tax paid against the purchase of a new car. Is this true in CT? I am trying to get out of a lease, and I can sell my leased car (leased through Toyota) for about $3k more than the dealer is offering; however, I would have to pay$1700 in sales tax based on the current balance owed. It seems crazy to me (although I understadn the mechanics behind it) to pay $1700 in tax for a car that will be immediately passed to a new owner.

    If I can sell it privately and NOT pay tax, I would be close to what I owe, so the thought of eating $1700 is tough to swallow - although I understand I would have swalloed that had I purchased the car originally. Thanks for any help!
  • mrsuribemrsuribe Posts: 4
    Our lease is up in July & our residual for our 2010 exl is 15,525. We've had some late payments with Honda so they've told us they will not be able to provide a loan for the lease buyout.

    The KBB value is well over the residual & it feels like they'd rather get the car back & resale & make the profit. Any idea who to apply for a loan with for this situation? Our score is approx 630. We live in CA. Let me know if you have additional questions.
  • kyfdx%40Edmundskyfdx%40Edmunds Posts: 25,851
    Try your local bank or credit union..

    Moderator - Prices Paid, Lease Questions, SUVs

  • sandman_6472sandman_6472 Coral Springs, FLPosts: 2,576
    In the future, don't have any late payments...or maybe y'all are leasing more vehicle than can be afforded. Many folks seem to do that and buy/lease something way too expensive. Better to have a less expensive model that is affordable since you are dinging your credit scores which is just plain dumb! We can afford any vehicle we want but we're smart enough to only purchase affordable one's that we can pay for all at once. We only finance if the rate is 0% or very very low. We also keep them for a long time, our Mazda is over 118k, an '05 and my '06 Civic is at the 40k point so it'll be here for a few more years, until at least 2016. Got my credit score last week and it's at 800.

    The Sandman :) :sick: :shades:

    2014 Hyundai Tuscon SE/2005 Mazda 3s/2008 Hyundai Accent GLS/2009 Nissan Versa SL hatch

  • I see someone mentioned "dealer pass through" above - can someone expound on this?
    I am in VA and have a leased 2011 Camry LE coming up in July. I have a friend who wants to buy the car - ideally he would just buy the car from us through Toyota at the residual + taxes (~14.5k i believe) but I'm not sure what the best process is to accomplish this.
    In addition - do I have to wait until the lease is over or could I just finish out my last payment and do it before then?
  • qbrozenqbrozen Posts: 16,886
    edited June 2013
    Unfortunately, YOU would have to buy the car from Toyota and then your friend buys it from you, ensuring that you both pay taxes and transfer costs both times.

    Doing it through a dealer avoids the double taxes and double fees. However, dealers won't necessarily do this, at least not with some fee involved, and rightly so because it puts them on the hook for the car. They are responsible if something goes wrong and, of course, it costs them time and money to do the paperwork. They are obviously much more willing to if you are buying a car from them and your request is part of the necessary details to get the deal done.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '08 Town&Country

  • billy3554billy3554 Posts: 147
    A credit score of 800 really does not get a person any more than a credit score of 720 or so. Either will usually get the top tier financing rates.

    Many of us prefer not to spend the limited time we have driving an eight year old Mazda with 100K miles or a seven year old Civic when we can afford more. For us, getting there with some style while enjoying the drive is important. We only live once so why settle for less?

    Different strokes for different folks.

    Anyone can encounter financial difficulties which ding the credit score. Those difficulties do not mean a person is dumb.
  • sebring95sebring95 Posts: 3,225
    As qbrozen mentioned, there may be some dealers not interested in this. I have a couple friends in the biz that did it for me, but they have also done it for other people for a small fee ($400 give or take). A smaller used dealership would likely be more interested in making a few bucks for pushing some paperwork.

    I had a Toyota once and the lease required I complete the buy-out at a Toyota dealer. I think they charged me $500 to process the paperwork.....but that's a little bit different since it was my lease and I was the one buying it out.
  • Thanks for the insight.
    However what do you mean by some dealers not necessarily wanting to do this - why wouldn't it be in their best interest to turn around and sell the car when I turn it in?
  • qbrozenqbrozen Posts: 16,886
    edited June 2013
    well, sure, if you are willing to pay a normal markup. I was referring to the "in and out," or "dealer pass through" as you called it, where the parties expect a dealer to do the paperwork for free or nearly free.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '08 Town&Country

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