BUY OFF LEASE: Is buying your car off your own lease a bad idea? If so, why???
I would like some opinions on whether or not buying your leased car after your lease is up is a good or bad financial decision...or doesn't make a difference.
I have done this once before: I had a 2006 MDX lease with 36,000 allowed. At the end of the lease there was only 20K miles on the car and it was in great condition so I bought it off the lease with a car loan. I still have the car today, with about 50K miles and running well.
I also lease another car and that lease ends in August. Once that lease is up I will look to lease another car that I may intend to buy after the lease is up.
Should I not go into a lease that way?
What financial downsides are there to leasing and then buying a car?
Thanks for any enlightenment on this subject. Much appreciated.
Comments
Why wouldn't buying your leased car be a bad idea?
You know the life it's had and how well you've taken care of it.
The residual is set to be around wholesale for the car so it's usually a good deal price wise.
No real downside unless you haven't maintained the car well or the residual was set to high in the beginning which sometimes happens.
I have had people tell me "that is a terrible strategy. you're essentially paying the most $$ for the car." when I ask why, they don't really have an answer. i'm thinking: no money down, lease the car, know its history...then buy it if i want. Am I missing something in the financial equation?
Thx.
This kind of depends on how you finance it. If you lease the vehicle for three years, then buy it at the residual price and finance that balance for 5 years, you will have financed the purchase for a total of 8 years, so you're probably paying more in interest than a buyer who originally finances for 5 years or less. However, it's also a great way to avoid making a mistake and ending up upside-down in a vehicle you don't like or that doesn't suit your needs. It's likely that some of the people who told you that your strategy is terrible have traded in a vehicle on which they owe more than the value, which IMO is worse.
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That makes sense. Thanks for the help.
It's like every other car deal, only it is TWO car deals. You have to look at the overall price to you. If you can negotiate a good price for the lease, and the vehicle has an attractive residual, and you have good credit and can finance the payments at a low rate at the time of purchase, then it's going to be a better overall deal than if one of those elements isn't present - just pay attention to the details
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2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
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The problem is leasing a car for 36K miles and only using 20K miles. By definition, you are not getting your money's worth on the lease. In fact, buying the car out of the lease may be the only way to recoup some of that wasted money. If I'm driving 7K mi/yr or less, I'm buying new or slightly used..
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Yeah, and that is what I should do.
When our 2011 CRV was 2.5 years into it's three year lease I think it had 15,000 miles on it.
We were going to just write a check but the 2013's were all new and much improved.
I was in my old store one day and my former Sales Manager gave me a number on a 2013 that I couldn't pass up. The money factor was almost nothing and I had over 2000.00 equity in my 2011 that I rolled into the new lease. I ended up with an EX instead of the SE I was driving and a lower payment in the process.
Now, THIS one I intend to write a check for at lease end......unless.......?