Buying out a lease

jark

Hello
I am thinking about taking over a friends leased vehicle and buying it after the lease ends. Only 3 months left. Is this a bad idea? The vehicle is excellent condition. I figure the the buyout price is well below the the price they would charge of they took the vehicle in and conditioned it. Is the buyout price negotiable? Any advice or thoughts would be greatly appreciated. Thanks.

Mr_Shiftright

It depends on whether the car is worth the buy out price or not. You can possibly, maybe, negotiate the price with the leasing company but they are under no obligation to negotiate with you. They may prefer to auction it off, and they may even have "residual insurance" so that they're covered for the stated residual amount no matter what.

There is some good common sense in buying a vehicle that you know has been reliable and well-cared-for (presuming that's the case with your friend's car), but if you could find the same car on the open market for thousands less, well that's a good motivation not to buy out the lease---and also consider you've coughed up 3 lease payments and maybe some other charges to take over the lease for thosse 3 months.

kyfdx

Some banks won't allow an assumption within the last six months.

If it's a really good deal, you could give her the money to buy it, then purchase it from her. You'll pay tax twice, but it may be the only way to get it done.

Also, if the buyout is below current value, they have no incentive to negotiate.

jark

Thanks for the input. Very helpful!