Purchasing at the End of Your Lease

volvomax

Thanks for your response. Can you give me a ballpark figure if I want to buy it?


What year is it?
Actually a moot question if they aren't going to negotiate.

Was told that leasing a 535xi would run over $100 a month more which would
put me at $759 and I would have to come up with a downpayment to get that #.

Leasing is going to get more expensive for everyone.

Didn't like the Subaru -- new XC70 are close to 42K.

If you are willing to go used, there are plenty of options.

I live in ne NJ -- both BMW dealers just put multi million dollar renovations and they are not hurting for business they told me. So they won't deal. Actually none of the high end dealers BMW, MB, or Audi negotiate much around here. A friend of mine priced a 535i to lease loaded and they wanted over $800. Which is why I was thinking of buying.

Wish I was selling cars there!
Typically, a BMW dealer is gonna make his money off you no matter what.

Assuming that you are paying $38k for the bimmer, plus the warranty, plus TTL, you'll be over $45k easy, which is @ $900/mo assuming you don't put any money down, for 60 mos. You might want to re-consider leasing.

yatze

Hello, it is an '06.

What is TTL?

What would be a ballpark # in case BMW might be more amenable to negotiating in Feb? I expect the mileage to be under or just at 20K by that time.

Thanks for your suggestions and ideas.

volvomax

06 530Xi wagons w/ low miles are going over the block @ $26,500 today.

TTL is car speak for tax, title and license fees. Most states collect sales tax on the buyout amount since the full sales tax wasn't paid up front. Also, some states charge to re-title the car.

yatze

Wow, that's quite a bit under 38K!!

I guess BMW doesn't have to negotiate. I guess they figure they can make money on this car which is why BMW financial said the price is not negotiable.

The dealer where I bought my car told me an 06, pre-owned certified wagon would sell for about $40k which is why they won't negotiate.

That's what comes from living in an area with lots of mega affluent folks, I guess. BMW corporate is only 5 miles from the dealership I bought this at and the dealer always has the latest corporate loaded cars for lease. They told me the execs get a new car every year and there is a waiting list for these cars. You can't even see a sales person without an appt, at this place.

Thanks for all the insight. It seems to make more sense now just to walk away.

stevelama

I bought a Volvo XC90 on Friday. I secured a decent rate on a 5-year loan from my credit union and was prepared to Buy rather than Lease. Without getting into details, I've done the math and don't want to get into a Lease.

However, I went to the dealer today with my check from the Bank and was offered an interesting deal.

1. Sign up for the Lease and get Volvo's current incentive ($5.5K off the purchase price is what I was quoted.)
2. Pay the Lease for 3 months
3. After 3 months, exercise the Purchase Option and terminate the lease.
4. Go back to my bank and finance the car for 5-years.

I did some quick number crunching and it seems that even with the early termination fees, I come out on top by about $3K when all is said and done. I'll also save about $50 on my monthly payments.

Is there a "gotcha" here that I'm not seeing? I'm new to the whole leasing thing.

volvomax

Just be careful of the termination fees.
Make sure you understand them fully.
Don't forget the sales tax on the buyout price,unless your state is one of the few that collects taxes up front on a lease.

volvomax

Now you know why Beemer dealers do so well.

kyfdx

volvomax...

Is there any rationale on why Volvo would give a bigger incentive on an independent bank lease than on a straight purchase? Especially a rather large difference ($3000?).

I've never been able to see the connection.

regards,
kyfdx

volvomax

Is there any rationale on why Volvo would give a bigger incentive on an independent bank lease than on a straight purchase? Especially a rather large difference ($3000?).

Easy. That way Volvo Finance doesn't have to worry about the loss when the car is returned.

kyfdx

Purchase

Independent lease

No return, either way, right? I still don't get it.. :confuse:

I understand why the incentive would be bigger on an independent lease vs. a VFNA lease.. just not sure why the discrepancy on a straight purchase.

regards,
kyfdx

volvomax

Well, what does the motor company want?
They want to sell you as many cars as possible.
In a lease, they know you NEED to do something when your lease is up.
So, they encourage leasing in order to a) have a captive customer and probably more importantly b) make the car affordable.
The average Volvo costs @ $35,000 or so. Thats an $800/mo car payment for 60 mos.
Not too many people can swing that. However, if your average lease pmt is $4-500/mo, that is more affordable for the majority of car buyers.

d1ane

Hi everyone!

I have a 07 CX-7 and the lease ends in December, the buy out price on our papers state a value of $21,647. Now the Cx-7 only has about 9k (miles), however, I was hit about a year ago by a car, while i was standing at the light.

I was wondering if i should just go ahead and buy a pre-owned 05 Nissan Murano, with 28k, with all tech pack.

Is it a good idea to just buy out the cx-7 lease, or buy the pre-owned made in japan Murano???

:shades:

kyfdx

Brand new '08 CX-7s are going for $6K off MSRP, or more... You can buy a pretty loaded one for around $23K...

So, I don't know about the Murano, but I definitely wouldn't buy out your current CX-7.

regards,
kyfdx
Host-Prices Paid Forums

halcut

Hi guys,

I was wondering if all you experts can help and share your thoughts on this for me...would really appreciate it.

I have a Benz 2005 c230 kompressor on a 3 yr lease with Ray Catena, NJ which expires on 1 Nov 2008.

My buy out option price reads 21.5k including taxes with residual price of 19600, my Benz has only 25,000 miles used on it and is very well taken care off...what are your suggestions - should I buy my Benz out.. interest rate on the buy out option is pretty high at 7.1 apr????? Also do you think I can negotiate the price and the interest rate? With the economy so bad and the state of the auto industry, I was thinking I should be getting better deal than this. What are your thoughts?

Any help would be greatly appreciated. Thanks in advance.

dtownfb

Before making a decision, you need to find out the real value of your Benz. Post the car's information on this forums (follow template at the bottom of the page): http://townhall-talk.edmunds.com/WebX/.ee9c851/36405

The salesmen on this page will let you know what your Benz is trading for at auction (trade-in prices) and how much it would cost retail. Then you can decide whether to buy it or not.

You may want to check lending options like your bank or credit union for lower rates.

halcut

Thanks.. Posted the info on the other thread.

cremater

hello I have a 05 chevy colorado crew cab the lease ends in Dec with a buyout price of 11288.20 it was a 48 mo lease but the finance company GMAC refuses to negotiate a lower price and has stated that is does not bother them to take a loss at auction anyone have any strategic suggestions to get them to lower the price or do they even do that thanks for any input

volvomax

If GMAC doesn't want to negotiate there isn't much you can do.

firbird

I'm trying to decide if I should buy out my 05 Lexus ES330 with 63,500 mi for $17,800. I'm not sure how picky the dealerships are about body blemishes and interior scratches, etc. I also don't know why my rear electric windows don't work anymore, not fuse-related...so perhaps better to buy it than negotiate a new lease? Also not sure how interest rates work out for a newer vs older vehicle, then there are the maintenance issues to consider. I've also told the dealer to work up numbers on a Lexus IS 2008...any advice on all of these issues?

Thanks.

volvomax

Well, you have a $13,000 car with issues.
I'd try to go for a new one.

drnick5

my lease is coming up for my 2006 accord EXl w navi

I'm WAY under the miles (I'm at about 33,000 and have a 3 year 45,000 mile lease) so I'm sort of forced to buy it.

anyway, I'm wondering the BEST way to go about this. the buy out will be just about 14,000. should I finance through the dealer? go to a private credit union? is my buy out price negotiable? any other tips you can recommend for doing this?

thanks in advance!

qbrozen

Not sure why you think you are forced to buy it ... ??

And, no, your buyout is not negotiable if with Honda Finance. And no need to go to your dealer to finance it. You can deal direct with honda finance. But you should find out what your credit union is offering before doing so, just in case they are lower.

You should definitely check its value with Volvomax, however. Maybe he'll see your post and answer here. Given what my '06 V6 EXL was worth, I'm not sure if yours is worth buying. Mine was a stick, however.

But you gotta let him know all the details. Sounds like a 4-cyl, right? And I'm assuming automatic?

drnick5

Thanks for the response, I'm not FORCED to buy... but in my mind I've paid for 45,000 miles of depreciation... and only driven 33,000 of those miles. so if I just turn the car in, them I'm giving the dealer equity. right?

is it possible to trade in a lease? (buyout is 14,000, if the car is worth 16,000 I'd get 2,000 toward my next car, right?)

I have an 06 accord, EXL with Navi, 4 cyl with manual tranny (its a rare one, lol)

I have 33,000 miles on it. buy out is just about 14,000

firbird

Won't I incur alot of penalty fees to fix the "issues?" Maybe I should just buy it...my credit union has offered me 72 mos loan at 5.99%, dealer said total buy out with tax is 18700. Then there is property tax to consider, higher on a newer vehicle...but if I will be spending lots in repairs on the older vehicle then perhaps it's a wash. I could also see if the credit union would approve a loan on a different new vehicle, maybe an 08...but I'd still have to cough up the cash for the "issues" on the lexus I'm turning in off lease.

By the way, where did you come up with a 13000 value on the car? I thought it was more like 17K?

thanks for any advice.

qbrozen

Yes, it is completely acceptable to trade in a leased vehicle. If indeed it is worth more than the buyout, you would benefit. Additionally, it is cheaper to trade it in then it is to buy it and then trade it because a dealer buying the car from honda finance does not have to pay tax, whereas you will. At least, that's how it is in NJ.

volvomax

Yes, you may incur some penalties,but I doubt it will be $4000.

Cars similar to yours are bringing @ $13,000 at auction.
So, you are paying retail for a car that is not in retail condition.

volvomax

If you want to buy the car,$14,000 isn't a bad price.
The car is prob @ $12-13,000 wholesale.
You don't have any equity though.

gabbo

Not knowing about these types of resources, I got fleeced on my 2005 Acura TL lease. Well the deal wasn't too bad, but I made a few mistakes.

Long story short, I got a 48 month lease with first payment due at $460 a month. Living in Texas I got stuck paying interest of the full car which increased the cost slightly. The big mistake I made was getting a 12,000 month lease. I ended up changing jobs and will probably be about 12K-14K over over when the car is due in May. The car is also with US Bank, which from what I read is notorious for being very hard on end of lease condition. My concern is I can get hit with about $2500-$3000 when the lease is due.

So I am weighing a couple of options.

1. Get out of the lease and by a late model used car a step down (like a Nissan Altima) for around 15,000, pay it off quickly and drive it till the wheels fall off.

2. Buy the TL on a 4 year note, pay it off in 3 and plan on driving it until the wheels fall off.

I can get out of the TL for 19,000 right now or $16,400 when the lease is up. I'd purchase it through my credit union for a very competitive (4%) rate. I keep thinking that I'll have to write a big check for the end of this lease (or roll it into a note) I'm paying the same net amount. So I may be better off sticking with the TL. It has a few more miles on it, but I have no doubt it will run fine for 5 more years. I'd rather have the bells and whistles of the TL for 5 years than a stripped down Altima.

Does that make sense? Or would buying it be a foolish financial decision?

Also, I read on the site that there can be some flexibility at the end of the lease purchase price. The value for the TL seems fairly close to market. If US Bank thinks they will get less at auction, would they be willing to move off the contract residual price.

When I called about the purchase numbers today, they were quick to waive most of the fees. It seems like they were anxious to make a sale.

jayess

Has anyone had any experience with HMFC ? Will they negotiate, especially in the current car selling economy ? Even though Hyundai resale values are typically less, We have an '07 Sonata GLS with the 02 pkg, basically a power seat, steering wheel audio controls and trip computer that we like but wouldn't mind liking it for a little less to buyout. The 2.5 yr lease expires this April, buyout is $9545 which is in the ballpark for trade value at KBB and Cars dot com. Presently we're about 8000mi under the 15,000 mile/yr allotment lease to date. Years back I was successful negotiating with Ford leasing but that was then and they were fords. Thanks

volvomax

Why are you saying you got fleeced?
YOU may have made some bad decisions, but that isn;t the fault of the dealer,Acura or US Bank.
ALL leases charge interest on the full car, depreciation AND residual.
Not just in TX.
Second, mileage decisions are your call, not the lenders or the dealers.
People routinely take the lower mile lease because they want a lower payment.
Yes,sometimes people's situations change. however, you know how many miles you are driving each month.
The smart thing to do is to put money aside each month to cover the mileage penalty.
Third, US Bank is not difficult at all to deal with. They let you know what kind of condition they expect the car to be in at the return, and they offer a pre-term inspection so there is no confusion.
You owe for the miles,you drove the car.

As for buying the car out, US Bank will work with you, to a point.
Right now, that car is only worth $15,000 or so.
Obviously it will be worth less at the end of the lease.
You may be better off returning the car and paying what you owe if you can't get enough of a discount.
Regardless, please remember that next time you have to be clear on what your needs are in a vehicle and plan accordingly.

volvomax

I doubt it.
$9500 is quite fair for that car,esp w/ low miles.
It's real close to wholesale.

qbrozen

Maybe I missed it ... but how many payments do you have left?

Just remember ... unless you've already done it ... don't let the bank know you are over your miles while negotiating.

gabbo

I should have been more clear. The actualy fleecing came on the not price of the car. It was absolutely my fault because I didn't reseach it nearly as much as recent vehicles. I'm now a lot more knowledgable, thanks to sites like this, about what I should have negotiated upfront regarding the cap cost.

I did think the tax law was different in Texas in that you got charged the whole tax upfront, rather than on the monthly rent charge. But I could be wrong.

I understand paying the miles, it's only fair since the contract was based on less depreciation.

Thanks for the advice on getting the inspection. If the car is worth $15,000 and the penalty is $2500-$3000, then it sounds like it's a wash whether I buy it now (basically rolling in the penalty fee) or turn it end at the end of the lease in six months and pay the penalty. It's just a question of if I want to keep this car or move onto something else.

gabbo

I didn't discuss mileage when we I talked to the bank and won't...thanks!

qbrozen

How many payments left?

Just trying to get a handle on what you would pay if you finished the lease vs buying now.

gabbo

I have 6 payments left...

qbrozen

Ok. Well, in 6 months, the value has nowhere to go but down. As Vmax said, it is worth about $15k right now. So that means you are currently $4k upside down. So I suggest continuing to make your payments and then negotiate the buyout when you have a month or so to go. If its worth, say, $13k at that time, and they sell to you for $14k (just throwing out a random number), then you are only $1k upside-down at that time, plus you got to drive the car for another 6 months.

saablcp

LOL! You got "FLEECED" by the dealer because You (YOU!) agreed to a price before and without doing due diligence! Are you familiar with the term "Caveat Emptor"? Did you expect the dealer to say to you "I'm sorry Mr.Jones your offer to do this deal is much higher than what we in good conscience as owners of a non tax exempt,for profit business operating in a free market economy can accept in good conscience.Give us a moment to come up with a counter offer at a lower,much more reasonable price" !!!!

Kirstie_H

Excuse me, but the buyer already admitted that he/she should have done better homework. We're all very busy, and we don't need to add "scrub salt out of wound" to our to-do lists.

volvomax

I didn't discuss mileage when we I talked to the bank and won't...thanks!

Hmm,that is usually the first question the bank asks.

volvomax

I should have been more clear. The actualy fleecing came on the not price of the car. It was absolutely my fault because I didn't reseach it nearly as much as recent vehicles. I'm now a lot more knowledgable, thanks to sites like this, about what I should have negotiated upfront regarding the cap cost.


OK, I'm lost. The cap cost IS the price of the car.
So, if you didn't get fleeced on the price,what else is there to negotiate on the cap cost? :confuse:

gabbo

Sorry, that was a typo. It was on the cap cost of the car. There was nothing else to negotiate. It was a bad decision on my part, I'm just trying not to compound it with another one and was looking for help.

volvomax

Fine, but how did you get fleeced on the cap cost??
It is a NEGOTIATED price.
If you agreed to it,you didn't get fleeced.
You may have been out-negotiated,but that is life.

kyfdx

Where I come from, if you get taken advantage of on price, through lack of preparation or ignorance, or whatever.... you've been fleeced.

Negotiated sales businesses generally operate that way. When the prospective client isn't well-prepared, the sellers take advantage of the situation.

I'm not sure why you object to the characterization, when you seem to be fine with the way it works? It's just a colloquialism.. all semantics.

As noted before, our friend came here for help, admitting he did a bad job negotiating his last lease. Let's help him, rather than berate him.

regards,
kyfdx
visiting host

sdjb4

If I am gauging the intent of the threadstarter's correctly, he would like good advice as to is present options that would allow him to succesfully complete the lease with as little pocket expense as possible.

Your responses do little to remedy that situation other than finger pointing. He already knows what he did wrong.

So, if I were you, I would take into consideration that sometimes things come up and we have to switch jobs. Why dont you stop judging others and keep your comments to yourself if you arent going to positively contribute. Remember, do unto others......

Have a great day, Volvomax!

dtownfb

A first timer giving lessons to the veteran....... Relax, the moderator addressed this two days ago.

Kirstie_H

Yes, yes... let's all move on. And, if you don't believe that volvomax gives good advice, I suggest you check the real-world trade-in values discussion. Sometimes we all have a bad hair day. I just hope the questions have been answered!

gabbo

As I freely admitted to (and has been pointed out by many others)I know I made some mistakes along the way, I'm just trying to make the best decision right now.

It sounds like I am around $4000 upside down now. It will likely be a similar amount when the lease is up…hopefully less if I can negotiate it down a little bit. The end of lease fees will likely be between $2,000-$3,000 for mileage and any potential wear and tear issues. I could either pay for that when the lease is up or carry it over.

I won't make a final decision to closer to lease end, but I'm seriously considering purchasing it. As I mentioned in the OP, I'm looking to get out of leasing two cars and instead buy one one car and get it paid off quickly. At that point it would come down to spending $15,000-$17000 for a modestly equipped late model car (07 Altima or Camry) or keeping the TL. I love the amenities of the TL and know it's been well cared for. While it's not under the original warranty, I feel confident that with proper care it should continue to be as realiable for the next year or two as a late model car would be with it's 36/48month warranty.

While I would be essentially carrying over the negagtive equity, it's really the money I would have paid in lease payments with the correct mileage. My goal would be to agressively pay it off within 24 months and be done with it. If I changed my mind, I'd essentially be in the same position (having the negative equity situation). But that should decrease over time as depreciation slows and the accelerated payments are applied.

volvomax

Where I come from, if you get taken advantage of on price, through lack of preparation or ignorance, or whatever.... you've been fleeced.

First of all, how do you define being "taken advantage of"?

A dealership is under NO obligation to give out the lowest possible price.
It is up to the consumer to find that out.

Now, in this case, the consumer admitted that he didn't do a good job.
Maybe he did,maybe he didn't.
But, since at no time did he ever contend that the dealer in question lied or misled him, then he cannot contend he was FLEECED.
He simply got out-negotiated. It happens all the time.
I'm not berating the poster for his deal, I'm berating him for making it look like the dealer did something wrong.

gabbo

I chose the wrong word. My mistake. Which I admitted...several times. I didn't ask for pity. I didn't villify the dealer. I made a bad financial decision and took accountability.

But you chose...and continue to choose to 'berate me.' The thing I love(d) about edmunds is the spirit of community and helping other folks. Obviously you have provided a lot of info to people on the site.

But why do you feel this need to 'berate' me for something that I admitted I made a mistake on??? For days on end???

Maybe it makes you feel better....but it's left me with a really bad taste about this site.
Thanks for the warm welcome to this topic.....