Purchasing at the End of Your Lease

volvomax

Oh fer crying out loud.
You asked for advice, I gave it.
YOU chose the word, I didn't.
I asked you to clarify your use of the word.
The reply you gave indicated that you in fact were not fleeced, or lied to or dealt with in an underhanded manner.
The only thing that I "berated" you for was making it look as if your dealer did something wrong,which turned out not to be the case.

As for leaving you with a bad taste,that was not my intention.
You do have to undertstand that when you come here and post something, you will be challenged to be accurate.

tidester

It's easy to misconstrue the message when there is no audible or other visual input besides the written word. I think we all understand the situation so we can drop the accusatory tone and resume our usual amicable and supportive dialog.

tidester, host
SUVs and Smart Shopper

nycdude

My 39 month lease on 2006 M35x is up in about 2 months. I will have about 33k miles with a 39k mile allowance. The car is not showroom perfect but I don't think that excessive wear will amount to more than about $500-600. The pre-return inspection is in 2 weeks. Residual, including $150 purchase fee but exclusive of tax is $30,200. Cars with approximately the same mileage are posted on Autotrader.com in a range from 26k-33k. I LOVE the car, which has been trouble-free. If I buy it, I would likely keep it another 3-4 years. Financing is not an issue, but I might want to get an extended warranty (don't know the cost). Any advice? I am really ambivalent between buying this or a new car for about the same price (32k).

boozoo99

Through a fortunate situation I have been given a free car to use so I am currently researching what to do with my current leased car. Here are the specs:

-07 Saturn Vue- 39 month lease up in 12/09- 15k miles/per year
-currently has 27k miles
-residual- $11,500
-Monthly Payments- ~$350
-Edmund's Private Party- $11,800
-Financed through GMAC

From what I have read, it looks like negotiating the buyout price with GMAC is an option. I would need to turn around and sell the car or go to CarMax- what fees are associated with this?

What do you see my best options being? I would like to do this sooner than later since every month it is costing me money.

Any suggestions would be great! Thanks!

kyfdx

Your residual doesn't matter, right now.

GMAC won't negotiate with you, if you are still on the hook for a year's worth of payments. They have no incentive to do so.

Call GMAC and get the current payoff. That is what you have to sell your car for, to get out of the lease. You'll probably find that it's cheaper to keep driving it, and make the payments, then turn it in.

Good luck!
kyfdx

volvomax

Unless your bank will negotiate with you,return the car.
Similar M35's are going over the block @ $20,000 or so.

nycdude

Thanks. Can you explain why the block (I assume that means auction) price should be the point of comparison. If I wanted to replace the car, wouldn't retail be what I was looking at? I haven't been watching this board very long, so I apologize if this has already been discussed. I was told by an Infiniti Financial rep that they don't negotiate the residual.

qbrozen

Can you explain why the block (I assume that means auction) price should be the point of comparison. If I wanted to replace the car, wouldn't retail be what I was looking at?

Volvomax was giving you a price he knows, not necessarily telling you this is what you should pay for your car. Its actual auction sale prices and it is what he can look up for you.

Retail, on the other hand, is an unknown because it all depends on your negotiating skills and the alignment of the moons on the particular day you go to the dealer. For most people, $2500-$3k over the auction price is about the "right price." So if your car auctions for $20k, then average retail is probably in the $23k range.

SO, point of the story is, if you can walk onto a dealer lot and buy a car similar to yours for $23k, then you should not pay more than that to buy yours at lease end.

volvomax

If Infiniti Financial won't negotiate,then just return the car and buy something else.

upsracer

Hi, just wondering if I could get some help deciding what to do with my 05 Acura TSX which I am still happy with and has never had any problems. It is in perfect condition except for a small (quarter sized) mark on the rear bumper. Specs are 6spd Manual w/ Navi, Red w/ black leather, 26,000 miles. I am in NJ (if that metters) and my buyout is about $15,000 plus tax. Thanks in advance for the help.

volvomax

Low miles, buyout price is about right on.

jayess

jeffc - wondering what you decided to do with your Sonata lease ? if you've decided to buy it out, were they 'receptive' to negotiating the price ?

rufuswashere

My 2006 Highlander Hybrid 2WD is coming to the end of its 3 year lease; we've already extended it 6 months because we were too busy to take care of this 6 months ago. The purchase payoff amount listed is $20,368.00. It's in good condition, with 22K miles (low mileage since it's mostly city driving in Boston). Based on what I see similar used cars going for on various web sites, this seems like a good deal, but advice in most places says to try negotiating the payoff price. Agree? If so, with whom? The leasing company is Toyota Financial Services, not the dealer.

Thank you for your assistance!

volvomax

Negotiations generally only work w/ banks, not the captive lenders of the motor companies.
I don't know if Toyota Financial will negotiate.
Even if they do, you probably don't have much room. Wholesale on your truck is @ $20,000. Remember that you will also have to pay sales tax on the buyout amount.

seefral

Hi -

This is the first time I have leased and my car's lease ends in early January. I like the car and am considering buying it. According to Edmunds pricing, if I were to sell it today I could make $1-2K (although this is not my intent). My question is this --- is the buyout price stated on my lease negotable? If so, how do I go about negotiating?

paulo6

My lease on my Honda Odyssey is about to be over in 4 weeks. My risidual is half decent...I am thinking of buying the car and reselling it in the market. If I buy it from M&I financing and then sell it immediately to a person waiting to buy it from me...will I have to pay the 6% MI sales tax, or is there a way to get out of it? I mean, I will never have to register the car at the DMV myself??

tidester

If you have title to the car and you transfer that title for cash, then you have made a sale subject to tax.

-tidester, host
SUVs and Smart Shopper

volvomax

Generally speaking, if taxes are owed, the bank will collect the tax from you.
This is because the state won't release the title without being paid the tax.

volvomax

Who is your lease co?

wvgasguy

There are huge rebates (sorry dealers, I know it's "marketing support-dealer cash") and discounts going on with the 2008 M35x's. I'd have a hard time wanting to keep the 06 at $30,000 when a few grand more would buy a new one

jnorman76

Hi ... I have a 2006 Chrysler Pacifica base model (4dr wagon, FWD) which I am planning on turning in on 1/20. I have about 35,000 miles on it and it's in good condition. The residual value of the car is $11,101. Currently, Chrysler is not offering me any incentive to stay in the car. I have a $300 turn-in fee, plus the car will need a good detailing ($200) and maybe two new tires ($275). According to TMV, the trade in value is about $10,100. Just wanted to make sure I'm making the right decision here and need some opinions!

Thanks!

Kirstie_H

As someone else mentioned, if you like the car and couldn't get the same quality used vehicle for the $11K, then you should keep it given that you know how it's been cared for.

Having said that, I had a Pacifica for 3 years and it gave me quite a bit of trouble

Also, when you say Chrysler isn't offering an incentive to stay in the car, do you mean reducing the buyout price? Have you out-and-out asked them? If not, it's worth a try - you're no worse off if they say no.

qbrozen

I didn't know you had a Pac, kirstie.

We had no real problems with our '05 for the 3 years we owned it.

I see Chrysler fixed their residuals. Or at least didn't give quite the incentive to the '06s. Ours had an $18k residual and was also worth maybe $12k by the time we were done. I was happy to turn it back in.

jnorman, if Edmunds is over on alot of their values. So odds are your rig is worth much less than what you are seeing. I'd dump it and run. They are VERY lax on turn-in, too, so I wouldn't even sweat the numbers. We had a salesguy do the paperwork on ours. He didn't even look at the tires. Did a quick run around the truck, ticked off all the boxes saying it was OK, and off we went. He didn't even notice the misaligned rear bumper from where it had been hit (twice)!

Kirstie_H

Yup - though mine was an earlier model year, and I never loved it.

jnorman76

Chrysler is not offering to reduce the buyout on the car at all -- at least that was the story a couple of months ago. I spoke with a guy at the dealership who passed along the information -- so should I call Chrysler Financial myself?

jnorman76

I quite frankly am not sure what I could get for $11K in this market (Milwaukee). I have not really started looking, but I was convinced before I came on the forum boards that I was going to turn it in.

I hope they're lax on turn in ... this is my first leased vehicle, and while there's nothing major wrong, I do have one big scratch on the side of the car (not a scrape, but a scratch) that is noticable. A little peeling on the bumper paint, and a couple of dings that are credit card sized or just over.

I also hate that I have to pay the $300 turn-in fee.

qbrozen

yikes! well, that's alot of damage. good luck.

Kirstie_H

Yes, always negotiate with the finance company directly. They're the only ones with the power to make a deal.

volvomax

Yes, always negotiate with the finance company directly. They're the only ones with the power to make a deal.

Usually the captive lenders won't deal w/ the customer directly. The refer you back to the dealer.
If Chrysler Financial tells the dealer there is no negotiation, the customer will get the same answer.

Kirstie_H

Ah, my bad - I thought it was the other way around entirely.

28firefighter

I just have a really quick question.

Does Subaru Chase Finance negotiate lease end residuals? Only reason I ask is that the lease end residual on the legacy we just leased is really high, and even the dealership said that the car would not be worth that much at the end of the lease.

Should we want to purchase it, would Subaru negotiate?

volvomax

If it is through Chase Bank, yes they negotiate.

allinschenk

I'm within 90 days of the end of my lease and the local VW dealership told me that my dealer payoff was $13,394 which doesn't make since to me since my residual is $16,022. VW told me that is had to do with the fair market value, but I'm still a bit confused. Looking at doing a "trade-in" as I am over mileage. Thanks in advance.

volvomax

VW Finance has a history of offering their cars to VW dealers for less than the residual.
However, this offer is only good to VW dealers.

Certain Banks will also offer their cars to dealers for less than the residual, esp if the car will be hard to unload at the auction.

jnorman76

I wouldn't categorize it as a "lot of damage" - I think it's just somewhat noticeable. Hopefully, we'll have good luck at turn-in.

jbaek74

I have a 04 ES 330 that only has three payments left on the lease @ $370/ mo. It only has 38,000 miles and the interior is very clean. However, there are some exterior cosmetic problems that would take around $2,000 to repair at a independent body shop. Right now, the payoff from Wells Fargo is $15,900. I need to determine which of the following would be the most cost-effective option:

1) Trade-in the car as-is, now.
2) Spend $2,000 to repair, then trade-in for a new car ASAP.
3) Keep the car for 3 more months, then return the car as-is, pay "excessive wear&tear fees" (would this be a lot more than what an average body shop charges?)
4) Repair the car, then return in 3 months.

I also want to know what you experts think would be the "real-world trade-in value" for this car before and after the repairs.

One last thing, does Wells Fargo negotiate the buyout amount at lease-end?

Thank you...

volvomax

Trading isn't an option. Unmolested, the car is only worth $11-12,000

So, it's either buy it out or return it.
Wells will negotiate the buyout.
If you do plan on returning the car, you are better off repairing it first.
Wells can charge whatever they want to repair the damage and you really don't have any recourse at that point.

jbaek74

Thanks for your advice volvomax - as you stated, trading is definitely out of question...I didn't think the value would be that low...

So, if I were to negotiate a buyout:

What would be a good starting point? and a fair final price to pay?
Would it be better to start negotiating now rather than later towards lease-end?
Any other tips on negotiating a buyout?

Thanks!

volvomax

I'd wait until the end of the lease. That is when the bank is going to be the most motivated.
Plus, the car will continue to depreciate and the auction values will reflect that.

As for a price, I'd shoot for a little over the auction prices.
Maybe a grand more.

jbaek74

Thank you very much for your help sir!!

Happy New Year~~

charlielab

Hi - I'm looking for quick advice on handling the lease termination on my 2005 V8 4 Runner LTD. The lease expires at the end of January 2009. I like the car and have taken care of it. Here are the details:

Location: Atlanta, GA
Make: TOYOTA
Model: 2005 4 Runner LTD (V8 and all options except Navigation System).
Lease Company: US Bank
Lease Terms: 48 Months / 15K Month ($0.18 Overage)
Termination Fee: $395 (If not purchased)
Residual: $20,500
Odometer: 62,000 (Estimated End of Lease Milage)
Condition: Very Good - One 3 inch paint scratch to repair < $250.00 (US Bank Inspection has already been completed).

All things being equal, I would like to purchase the car at the prevailing market rate halfway between auction and retail (I think $16K-$18K). Big SUVs are not in demand now, and the car is probably not worth $20,500 but I'm not sure about the best way to negotiate with US Bank.

Any ideas or help would be greatly appreciated!

volvomax

Just call em up and make an offer.
I think that price range is reasonable.

masn

I'm planning to buy my lease IS 250; I'm confused between residual value and payoff, what is the difference?

My lease ends on 02/2009 and the payoff from LFS is $19818 the TMV are $16888 / $18347 / $19465 (already including the extra mileage).

I'm planning to offer LFS a buy-out of around $18k, is that realistic (to high, to low)? <img src="

Thank you,

sebring95

So what's your residual? I'm guessing the $19,818 payoff number is the residual plus your last 1-2 payments? That would make sense.

FWIW, Toyota/Lexus financial will not negotiate the buyout. Even on those Tundras that are worth $5,000 less than the residual.

qbrozen

Also, that payoff quote MAY include tax. You'll want to confirm.

gadgetguy1

Hi, r350 lease ends Jan, residual is 32k. I see similar models with lower mileage adveried around 26K. Lease is thru MBZ financial. Do they negotiate via the dealer rep? If so, is the process for me to make an offer based on fair market?
I see my current choices as buy out and add the electronics this car lacks in aftermarket, or return and buy a different car..Thanks in advance.

masn

I just called them and my residual is $19,217. LFS told me thst here in FL I need to deal with the dealer not with them. If I decided to buy it, besides the residual do they will charge me other fees (title, sfer, etc)?? if they do what's acceptable and what's not?

Thank you in advance.

volvomax

Dealer will have to collect the same fees they do on a regular sale.
Tax, Title, Registration, Doc Fee, etc.
They may or may not charge an additional fee for doing the deal in the first place.

sebring95

As volvomax mentioned, the dealer handles it all. I found one willing to do it for $250. They're basically buying the vehicle from Toyota/Lexus and then selling it to you as a used vehicle. I found a couple that didn't want to do it at any cost. I'll bet they'd love to get $250 to push some paperwork today!

fastfix

I have a 06 Honda CRV, my lease is up in a few months and i am trying to decide if I should purchase the vehicle. My residual is 11,938, do you think with the current down trend in car sales, that they (Honda Financial Services) will negociate the residual price. It is the base model 2wd , with no additional options, 41K miles.
thanks