Purchasing at the End of Your Lease

worr

We had our lease inspection done yesterday and I asked our inspector what the market is and he said in his 15 years this has been a good time to be in a lease as the prices fell on the cars, but a bad time to buy out a lease....the trend is for people to return their lease cars (unless they can negotiate a price) and buy new.

That's what was said.

tpott

Like a lot of other people, I had a great job a year ago...then unfortunately lost it. Been collecting unemployment, but still making my lease payments with no problem. I have two months left on the lease and want to buy the car out. I got $6000.00 in the bank and can continue to make payments. I talked to Subaru of America a month ago and they said I was pre-approved for a loan through Chase Auto Finance (whom I am currently paying for the lease). I am trying to be pre-emptive and make sure Im not gonna get screwed when I go to buy the car out in 2 months.

Any suggestions on this matter?? Does this sound like it will work?? I have never been late or missed a payment+I have taken 6 personal loans out over the years and paid them all back early!

Any advice would be much appreciated....thank you

qbrozen

There's really no way to tell. Based on your history with them, I would think Chase would just put the loan through. I've never had my employment confirmed for an auto loan, personally. But things are a bit different these days. They may check up on you, they may not.

Good luck with your job search, by the way. I hope things turn around soon.

volvomax

If the lender knows you don't have a job,you won't get a loan.
A pre-approval means almost nothing, the bank merely assumes that you still have the same job,salary, etc.
If they find out otherwise, the approval goes away.

otto8

Heck........In my neck of the woods you can buy those 2008 4wd TBs
for $16k !
Sure a few more miles but 2 years newer........................
http://www.usedcarking.com/inventory/details2.asp?vehicle_id=WT10269

wilmo11

I have an 07' Jeep Wrangler that I leased for 39 months. After 26 months I only have 6K miles on it and I absolutely love it and would like to purchase the vehicle. I have leased before but have never bought one out at the end, so I have a few questions.

I understand the buyout price is negotiable? If not, disregard the rest.

I still have roughly 12/13 months before the lease is up, given the current economy would it be in my best interest to buyout out now, or wait until the lease is actually up in order to get the best buyout deal?

My lease is through Chrysler Financial, I assume I would need to contact them to negotiate a buyout price?

This is all I can think of right now. Any help with this would be great. Also ANY additional info you want to add I would appreciate.

dtownfb

In my layman's opinion, you would need to contact Chrysler Financial to discuss the buyout. Just because Chrysler is going through a bankruptcy, don't expect them to cut you a break.

Others can chime in to expected costs.

volvomax

You will have to wait until the end of your lease to get a decent buyout.
Bank has no need to cut itself short right now.

rayd8

My lease is up in 3 weeks.
2006 Toyota 4Runner SR5 V6 4x4 with 22,000 miles.
The residual is 18,700.
Is it worth buying at that price, or am I better off giving it back?
Thanks.

volvomax

It's a good price. A little more than wholesale.

rgeba

(I posted a similar message in the Mazdea3 forum. Sorry for the duplication.)

My lease is up in 2 weeks and I want to buy the car. The purchase option price is good, but the dealer wants to add a $995 admin. fee and a $298 document fee (in addition to tax, title, reg.). Mazda Credit tells me the buyout must be through the dealer, who technically owns the vehicle. After reading the contract, it seems that dealer is legally covered by the phrase "plus official fees and taxes" added after the purchase option price.

It may be legal, but I feel these fees are exorbitant and unjustifiable. Do I have any recourse, or am I hosed? Anyone have any experience with end of lease buyout fees? I can't believe the amount of these charges is "normal".

sebring95

Do you have to buy if from THAT dealer, or just a dealer. Toyota buy-outs require you go through a dealer, but it just has to be any licensed auto dealer. My nearest Toyota dealer wanted $250 to do the paperwork (fair I guess) but I found another dealer that did it for $100. Basically Toyota sells the vehicle to the dealer and then they sell it to you. The Mazda dealer doesn't own your car...that really wouldn't make any sense. But without really looking at your contract it would be hard to say for sure what's required. Perhaps it has to go through a Mazda dealer, but I would think you could go to any of them.

davenga

Our lease is up next month and we're trying to decide if we'll buy or turn the car in. This is our first experience at leasing and when we inquired about purchasing, we were told to go to an authorized Volvo dealer and ask what the fair price would be for the car (2006 Volvo XC90). We did this and made an offer to purchase the car based on that price (actually offered a little more). The leasing company refused our offer and counter offered with a price $3,000 more than the "fair" price we had obtained. . We were on a four-year lease and the car in today's market is not worth what it would have been 4 years ago on a end lease purchase. As I mentioned this is our first experience with leasing and would like input re just how negotiable the end lease purchase price usually is.

davenga

Our lease is thru US BANK and we're hearing that they are very hard to deal with, anybody know anything about this?

tidester

While you're waiting for a reply, have a look at our Buying Your Leased Car article.

tidester, host
SUVs and Smart Shopper

volvomax

As with any negotiation, the other party is under no obligation to accept your offer.
Obviously, they have another idea of what is fair.
Raise your offer and see what they do.
Or, just turn the car in and buy something else.
Did your dealer give you a wholesale or retail price as "fair"?
If they gave you wholesale, US Bank isn't going to wholesale you the car.

davenga

if I raise my offer $3,000, they will accept. In today's market, that wouldn't be a "fair" price.

dtownfb

If you can provide more information on the car (year, mileage, options, etc.) along with the buyout price in the contract and the dealer's offer, we can give you a better idea if the dealer's offer is too high.

davenga

it's a 2006 XC90 Volvo (leather, sunroof, awd) with 39,000 miles. I offered $21,500. . .they countered with $24,500.

ocb642

My 2006 S60 is coming off of a lease at the end of the month. I would like to buy the car and I am trying to come up with a fair offer to US Bank. The buyout with tax/fees is $17,200. The car is in great shape and only has 20k miles on it. Price seems fair, but I would guess that it is more than they would get at auction. Any thoughts on a good offer price?

qbrozen

volvomax may be able to help you, but you need to give more info. What model? Options?

ocb642

It's a 2.5T AWD, power moonroof, leather, power/heated driver and passenger seats, 1 disc cd player.

davenga

I was told (by the dealer) that if I decide to turn my car back in they in turn will take it to the auction and that my car is going at auction right now for $16,000-$17,000. This makes the buyout price they've given me seem very high. Makes me wonder if I should turn it in and go to the auction and buy it instead of paying the buyout price.

ebbetje

I leased a 2004 Toyota Highlander, I already made the mistake to lease it for 5 years now I prefer a lower payment than the last 5 years Im under the 60.000 miles and they gave me a offer 5 more years $84 less 7.2% apr and it's mine ,wich helps a lot but Im not happy with the 5Year plan that means Im paying of a car in 10 Years that doesn't sound right to me Please Help what should I do????

sebring95

First off, stop looking at payment amount for a moment. What is the buyout amount for your '04 Highlander? It should be in the lease contract. If that amount is a bad deal, then you don't want to buy it out unless there's some specific reason you want to overpay for it. A good place to get the approximate value is on the "real world trade-in" forum here at Edmunds. Someone there can give you an estimate of the value of your Highlander and you can compare that to the lease buy-out.

If "paying off" a vehicle is your goal, then leasing is not the method to use for buying a vehicle. At this point, if the Highlander is a reasonable deal then finance it and pay it off. I would recommend taking the five year payment plan, and then paying whatever extra you can. Or set aside the extra money in a savings and then pay it off early. The savings could be used for repairs if necessary (rainy day fund). It will have taken nine or ten years, but at least it will be paid off. The other option is to buy (not lease) something else. Based on your "payment shopping" it sounds like you really can't afford to buy something new or at least something anywhere near as expensive as the Highlander. So you'll be trying to get into something used for a similar price to your used Highlander.

ebbetje

Thank you so much sebring95 for the fast response and all the info I'll look into the real world trade-in, you are right about the can't afford new.
And buyout amount is $12.900

dtownfb

Assuming it is a V8, i used the Used Car Appraiser here on Edmunds and got this:

http://www.edmunds.com/used/2006/volvo/xc90/100553064/options.html?tmvaction=vdp- result

it seems as though the $24,500 is reasonable by the dealer.

maybe volvomax can chime in...

volvomax

I looked at your information. I'm assuming that the car is a 2.5T AWD.
Your initial offer for a 2.5T was essentially correct.
If it is a 5 cyl, USB is smoking crack.
Maybe USB thinks its a V8??

volvomax

Price is fair, not fabulous.

ocb642

Thanks for the input. I thought it seemed fair compared to what I'm seeing as asking prices elsewhere. I'll probably put in an offer with a 5-10% haircut off the ask and go from there. I'm guessing they'll string me along until the last day.

indyjkraft

Who did you talk to. When they called the person I talked to said no way. I also got a lease buyout quote from a GMAC program person and he said no way. Program cost is all we can do. My residual is close but not close enough. I appreciate any advise you might have. indyjkraft

torr5962

06 CTS, 3.6l engine, sport package and heated seats, 45k miles. Lease up in July. The GMAC lease buyout is 21900. They basically quoted me the retail price when anyone with a brain cell knows this is garbage. They told me deal is non-negotiable. Everything is negotiable no? What could GM be thinking? The market is flooded with these cars. Any ideas why GM is taking hard line?

volvomax

Because they probably are insured for the residual and if they sell the car to you,they lose the insurance.
Just business.

itslisa

I am at the end of a closed-end lease (2006 VW beetle convertible). Car has low miles. Not had the huge problems that I have read by others. My question is this: I need to make a decision, do I buy it or walk away. This was not the primary car, it had been garaged during winters until 08-09. I just went through an horrific divorce and a death of a family member all in the span of three months. I am overwhelmed, inexperienced in solo car purchases. I need to make a sound decision and do not know best sources to consult. Thanks for your help.

dtownfb

Sounds like you had a rough year. hang in there!

let's make this as easy as possible for you. It should come down to looking at the numbers: the residual value vs. what the car is truly worth.

The residual value is simple. This is the value of the car as stated in the lease contract. This is what is due to the leasing company at the end of the contract if you choose to keep the car. There is likely some additional fees as well. The actual value of the car is what you need to determine. There are some great car salesman who can help determine the value of your vehicle on the "Real World Trade-In Values" forum: http://townhall-talk.edmunds.com/WebX/.ee9c851?displayRecent

Provide the information at the bottom of the page.

If the "real world" value is less than the residual, walk away and buy another car. If the "Real world" value is greater than the residual and you like the car, then buy it.

sebring95

I agree for the most part, but will add that the buy-out vs street value is not the only considerationg. There's certainly some value to keeping the car you have compared to buying something else. You know the history, the care, maintenance etc. and that's worth something. I paid a about $1,000 more for my Tundra for the lease buyout than I probably could have paid for another one. I would have had to spend time shopping/test driving, inspecting, and negotiating to buy a vehicle with questionable problems/history.

Since you're not overly enthusiastic about car shopping anyway, there's probably quite a bit of value in buying out the lease. That should be a pretty straight forward transaction.

dtownfb

Good points!

Kirstie_H

Also, keep in mind that this vehicle has ultra-low miles on it. It's still practically new!

Lisa, do you NEED this car? I know that you mentioned in email that it's not the only vehicle you owned. If you don't, you might just want to turn it in and walk away.

grandtotal

Nobody NEEDS a Beetle Convertible, it doesn't mean it's not nice to have for sunny days.

Kirstie_H

Oh, by all means... if she wants it and can afford it, that's a different story. She didn't mention whether she enjoys the vehicle or not. You just never know whether the person asking is aware that it's a fairly easy option.

The buyout price of $16K seems fairly reasonable (though I'd wait for a pro's take on the RWTIV) - it lists in my area for $17K as a certified pre-owned, and this is about as close as a private-party vehicle gets to that condition on its own.

dtownfb

volvomax came through with an auction value for her. It looks like the buyout price is a good price for this car.

If she is happy with the car and it suits her need, I would tell her to buy it.

itslisa

Yes, my bug convert. is my only car. Up to my divorce there was a 5 series BMW and the Volvo x-ctry wgn. Neither are my cars. I know that a VW bug is NOT historically known for being free of problems. I talked with many owners b-4 leasing it. So far I have not had huge probelms. With very low miles, not sure if it will become a 'pain in the bumpus'. I just want to make the best (financial) decision and I am having difficulty.....

grandtotal

The best financial decision is to walk away from the Beetle and buy a Corolla. You'll get 7 or 8 years of trouble free service from it and it will still be worth something when you decide to sell it.

kyfdx

Sounds boring, though... She just got divorced.. now, she has to give up her fun car, too?

If you like the Beetle, it certainly has low miles, and the price seems decent.. It's not like you are stuck with it for life, if you decide to buy it.. If it turns out to be problematic, you can always dump it and buy that Corolla..

(See? I got a cheap car last year to save money... now, I'm bored.. )

grandtotal

Sounds boring, though... She just got divorced.. now, she has to give up her fun car, too?

I agree entirely with you. That's why I emphasised the word financial in my answer. The problem is that the first time the Beetle is problematic it could be quite expensive.

itslisa

It occured to me that I did not thank all of you who responded to my quandry. My apologies........

Kirstie_H

No problem, Lisa - that's what we're here for!

Just a quick question for others - has anyone had experience negotiating the buyout price on VWs? IMO, it's always worth asking, even if they say no.

sebring95

RE: Negotiating with VW:

I have heard of others doing so but not recently. It's a tough position when you have a very low mileage unit as that's usually the first question they ask. Never hurts to ask a few times though.

tmjohnson39

Help!!! We are at the end of a 5 year lease on a Chrysler Pacifica(would never do it again). The leasing company's inspector gave the car raving reviews and recommended no penalty charges for wear and tear. Now with 2 weeks before turn in we received a letter advising that we should buy the car to avoid a charge we will be responsible for regarding alleged "frame damage". The car was in an accident where the rear quarter panel was replaced. The repairing dealer stated that there was "no frame damage". Leasing company is claiming quarter panel replacement, which is immaculate, from factory and unable to detect by looking at it, substantially diminishes the cars value and we will be responsible for the difference between market value and what they sell it for. What can we do?
Lease states "I also recognize that if the vehicle has suffered frame damage or substantial other damage, even though the damage may have been repaired, the value of the vehicle will be substantially less than the value of an identical vehicle which has not had frame damage or suffered other damage." Any assistance would be greatly appreciated. Thank you!

grandtotal

Have the vehicle inspected by an independent inspector and (assuming the inspector finds no unrepaired damage) send a copy of his/her report to the leasing company by recorded delivery. Return the car on time.