Purchasing at the End of Your Lease

bostonmdxbuyer · September 2009

Thanks for the replys.
I understand that Lexus Financial owns the cars. But doesn't the dealer have some incentive, in the form of money from Lexus, to sell the car? If so, then perhaps the dealer would be willing to give up some of that money to get the deal done, rather than to give that sale to another dealer. When I have purchased or leased a vehicle in the past, I have tried to get dealers to bid against each other to get the best price. I don't know if the same strategy is possible with a end of lease purchase. If there is no incentive from Lexus to the dealers, then I can't see any advantage to shopping different dealers.
Thanks

sebring95 · September 2009

Once you turn the car in, the car generally either gets auctioned online or will be physically sent to a sale. The dealer would have the ability to bid on the car...so if the auction value is signifianctly less than your residual, I suppose it's feasibly possible to try and get the dealer to buy it at the sale and then sell it back to you. This is what someone I know did with a Tundra pickup that had a ludicrously high residual vs market value. However, that doesn't sound like the case on your vehicle so I don't think you have a leg to stand on negotiating for a better buy-out price. The dealer will facilitate the buy-out for you, but they're essentially just passing the money onto Toyota/Lexus finance.

volvomax · September 2009

Dealer gets no incentive from Lexus Financial to sell a car that Lexus Financial already owns.

paolasoriano · November 2009

Trying to negotiating with Volvo Finance on an end of lease option is very difficult. My buyout option on my SUV is $27,243 and I Kelly Blue Book says that the car is worth 20,000. Any advice on what I should do?

british_rover · November 2009

Go to the dealer you leased the car from originally they might be able to buy the car for a little less then the buy out but not 7,000 dollar less. Volvo is not negotiating on lease buy outs by more then a few hundred dollar right now.

Just turn the car in would be my advice.

davenga · November 2009

was my first time to purchase at end of lease and I learned a LOT. I was given a very different figure (of worth) from my bank, from Volvo finance and Blue Book. It was getting to be stressful for me so I actually decided just to purchase to get this out of the way, BUT when I called back to purchase the price had gone up considerably. I was told that figure changes often based on a number of things. All sounded like a bunch of BS to me but I sent them a check and am glad it's over. Will be the last time I lease. I considered the pros and cons and it just wasn't worth it, financially or mentally.

researchqueen · December 2009

Davenga -- WHOSE price went up? :confuse: The residual value (Volvo's price) shouldn't have gone up.

davenga · December 2009

researchqueen,
lease was through U.S. Bank. Payoff amount went UP from one week to the next.

10sfan · December 2009

I just purchased my MDX off lease. The residual value which was the purchase price was stipulated in the lease. Acura/Honda finance will not negotiate. I contacted several dealers hoping they could buy from Acura at a lower cost after I turned it in to them. I would purchase it from the dealer (two did my service work for years on two Acuras) No deal. Best purchase it direct from the 3rd party lender, in this case it was Acura. The dealers will squeeze you for any dollar amount ( they tried)to handle the buy out direct from the lender

smarty666 · December 2009

If the buyout is terrible, what you can do is find out from the dealer you are turning the car in at what their policy is for returning leased vehicles and whether they send it out to auction or buy it out and put it as a used car on the lot; my last lease the dealer did the latter though I leased another vehicle from them

if the dealership buys the car at auction or buy's it out from the car manufacture and puts it as a used car on their lot, what you can do is write your VIN # down and wait and watch the used car lot at the dealership you turned the car into at and when you see the car returned to the lot you can then go in an buy or finance it with a deal from the dealership itself

I know of several people personally who have done this because their lease buyout was thousands of dollars above what it was worth and they really wanted to keep the car when the lease was up but didn't want to pay thousands of dollars (when all is said and done) over msrp to keep the car

davenga · December 2009

This was my first experience at leasing a vehicle and will be my last. It didn't help tax wise as my tax man had said it would and once I revealed my hand that I wanted to purchase when the lease was up I felt I was against a wall. USBANK was not interested in negotiation on the price, their attitude was more "take it or leave it". The dealership told me USBANK leased cars normally go to auction but not necessarily in the area in which it was leased so could be anywhere. I also learned from this experience that the fact I was conservative on my yearly mileage just drove the price up in the end. (low mileage car) I had also done online research and read MUCH about how extra fees are added on when you turn the car back in at end of lease. There were complaints at the online forum that extra fees were charged when there was really no abnormal "wear and tear" on the car. As I said, no more leasing for me.

ffxjack · December 2009

Thinking of leasing for the first time only because my accountant suggested it and it makes sense for my personal situation.

Anyways, what make was the car and did you know or have any choice on who was financing it? Seems like there's lots of negative posts regarding USBANK.

davenga · December 2009

I leased a new Volvo XC90, first one the dealership had in stock. The dealership handled the financing through USBANK, we didn't ask about other financing because the rate they offered was VERY good. Like you, I leased on the advice of our accountant.
Also, once I started trying to negotiate the purchase at end of lease and running into all kinds of "attitudes" and problems, I researched USBANK on the internet and found that what I was experiencing was a common problem by most who leased through them. I'm sure you've read the online comments already. My brother has his own business and has often leased cars. When I discussed my situation with him he said he'd never experienced problems when he purchased at end of lease and was always able to negotiate successfully. (he didn't use USBANK, don't know who he leased through)
Oh and, I priced the same car I have at dealerships throughout the Atlanta area when I was considering end of lease purchase and it was selling at a much lower price because of the depressed economy at the time but this didn't change the "attitude" (or price) being given me by USBANK for purchase. At the time, Color was important and couldn't find the exact same color to buy off the lot so I went with the purchase of car I was leasing..

macdaddy4x4 · January 2010

I just leased a 2010 acadia and there is $2,500 added to the residual to get to the lease buyout price. Is this common from GM or is this a dealer add on.

davenga · January 2010

Not familiar with this, Macdaddy.

macdaddy4x4 · January 2010

Hoping that someone may have some insight into this. Not sure if this is lender imposed or dealer imposed. My first and possibly last time leasing. The stated residual seemed fair as I paid down the depreciation, but tacking on $2,500 to this to purchase seems like a sneaky way to get you on both ends.

im_brentwood · January 2010

FWIW, Here's Toyota's Policy... I'm a used car manager at a Toyota dealership so I am highly familiar with it.

Basically, at the end of your lease or Balloon you can buy the vehicle out for the contract residual, TFS has never negotiated a residual that I have ever seen.

Now, once we ground a lease return, we have 3 options.

1) Buy it for Payoff. Sometimes this is to our advantage, sometimes not. If we do this, the customer is not charged for any excess wear and tear or mileage. This is an amount we can charge a customer for their lease.

2) Buy for residual. This is also an amount we can charge a customer for their lease return.

3) Market Price. We can request a Market price, if the market price is below residual or payoff, we CANNOT offer the vehicle to the customer for that price. If we buy a vehicle for market Price we can't resell that vehicle to the customer, even if it's certified and priced at retail, if we get caught (And we probably will) TFS charges us back the difference between residual and market price.

Other Manufacturers may be different, but Honda Finance is similar.

Some banks, such as Chase, will not let us buy the vehicle at residual, only at what they feel it's worth. As such, I almost never buy Chase lease returns... more out of protest than anything else.

28firefighter · January 2010

Do any of you have any experience with negotiating lease end residuals with Fifth Third? My 2007 S60 R will be having its lease end in August, and I am contemplating buying it. Curious to know if Fifth Third ever negotiates.

Thanks!

cfrancoz · January 2010

My lease is up next week and I want to purchase the car through a loan - what is the best way for me to proceed?

I talked to the Audi dealer today and if I go through them, they want to outfit the car as a used car they would sell - I know I will be needing brake work sometime soon but I do not want to pay them for that work.

Can I just get a used car loan?
thanks for any information you can give me

tidester · January 2010

With a lease, you have the option to purchase the vehicle when it expires. If the dealership is discouraging you from doing that it may be because they think they can sell for more than the residual value which is what you would pay.

tidester, host
SUVs and Smart Shopper

sebring95 · January 2010

Some of the auto branded leasing companies require you to buy the car through a dealership. Toyota is like that, I believe Honda as well. Not sure on VW/Audi, but it's possible. Either way, you should be able to work it out with a dealer in advance under whatever terms you want. I've done this in the past and they usually want something for pushing the paperwork, but otherwise the cost was in line with the buy-out. You can always do the deal through another dealer. In the case of Toyota, it didn't matter what dealer I used so I actually went to a small used lot that only charged me $150 for paperwork. Toyota dealer wanted $500 plus some song and dance. A dealer can make the financing easier as well if you don't have a good relationship with a bank.

paolasoriano · January 2010

Thank you all for the advice on my Volvo truck. Volvo, the dealership & me could not come to an agreement on price. So what I did was turn the car in. Through research on a couple of websites I came accross a company that handled lease returns on my behalf. They gave me the smae advice I found here and told me the same thing you all told me. Volvo would not negotiatioate with me on price.

The car went to auction at in Palm Beach - Manheim and Get Your Car Back represented me on my buy back. They got me into the auction and I was allowed see the car go through the line. It was a very eye opening process for me. These auctions are like car supermarkets. With about 40-50 people looking at each car as it passed by and people online bidding on each car I was shocked.

Well my car came through the line and the price it started at was 16,500 and the car was bid up by me and 3 other people. The final price which I got my car for was 18,500 + the auction fee of 300 dollars and the $500.00 I paid to the company helping me. At the end of day I paid 19,300. I am very happy with the final result. I must say that some things could have gone wrong and I would have had to use Get Your Car Back to represent me at auction to buy another car within 30 days if my result failed.

Again thank you all for you help....

jeff2010 · January 2010

I'm trying to decide what / how to do my lease return. Its up in a couple of months, but it looks like I have a fair amount of equity in the car (a 2007 Acura TL) mainly due to low mileage. The problem is that while I'd like to keep the car, with another kid on the way we really need to move to something bigger. If I buy it and then try to sell it, my understanding is that I'll have to pay sales tax on the car (in California), which would eat up most of the equity. I'm not sure I want another Honda/Acura, but the letters that Honda financial has been sending me suggest that the car can't be traded into another dealer - they won't allow the other dealer to buy the car out. Any suggestions? I could just turn the car back in, but it seems like a waste to do so and lose the equity.

paolasoriano · January 2010

My situation was a bit different than yours. My car was upside down. Meaning the buyout was higher than the book. But was the same is the fact that we both want the car at the end of the lease. I hired Get Your Car Back to work on the options at the end of lease for me and they did a great job. Google the company and look at the information they have online for ending your lease. It is the best I have seen. Sorry I can not help you. My experience was with a car that was worth less than what the company wants not more. I wish I had that problem.

One thing, it seems that you would have to pay sales tax either way. I had to. also the 2500 fee seems really high. Mine was $450. I got hit with when I returned it back to the company. Once again, sorry I could not be more help to you on this one.

lobas1 · February 2010

I am looking for some advise on a Honda Pilot lease that is going to expire in July of this year. I have no interest in keeping the car and am well under the mileage (currently at 23k; allowed 15k per year).

The car is in good condition and has not been in any accidents. I am trying to find out if it is possible to leverage my current lease with the dealer to buy a new Honda Odyssey. I don't want to just turn the car in and go look for a new Honda. Do I have any options?

dtownfb · February 2010

It's been said by others in the past that Honda does not negotiate the residual value on their cars. So all you can do with the Honda dealer is turn the Pilot in. You have no leverage because you do not own the vehicle, Honda Financial owns it and you are simply renting it (leasing).

the only thing you can do is buy the Pilot at the end of the lease for the residual value; then trade it in for a new car. Of course you hope the trade value the dealer gives you is more than the residual value (the price you paid). That's rolling the dice.

Kirstie_H · February 2010

lobas1, dtownfb's advice is good - if you give us details about the vehicle (year, mileage, color, condition, and your location), we may be able to give you a ballpark trade-in amount for it, so you'll have a better idea of whether it's worth buying and then trading in.

rprossil · February 2010

I would suggest going to a Carmax and get a price from them as a guide to see if you're in the ballpark to do a trade towards another vehicle. Then you have an idea of where you are relative to your buyout. The other thing you can do is negotiate for the Odyssey and have the Honda dealer look at your Pilot as a trade. If the mileage and condition are as you state, the dealer may be eager enough to have it that he'll give you a number that makes sense if it sells a new van. Good luck.

paolasoriano · February 2010

Get the true market value on edmunds.com. That price is very accurate. Then look at your buyout price. If your buyout price is lower than the true market value you should buy your car. If your buyout price is higher than your true market value you should return your car.Or you could talk to Debbie Steinberg at Get Your Car Back to see if she will run the numbers for you. If you have a higher market value than residual value then I do not think they can help you.

rookd68 · March 2010

I have a clean '08 Mazda Cx-9 Grand Touring/Nav w/ 19300 miles, lease ended end of Feb, have until next Weds to --- or get off the pot. I want to buy it, I have financing in hand, but I could get .25 point better on my loan if the LTV is 90% of wholesale (around 23,175), anybody work with Mazda and can tell me if there is a posibility that I can get them to negotiate the payoff figure which is $25,900?

Thanks.

rookd68 · March 2010

Well, the plot thickens turns out my sweet finance isn't so sweet, Cap 1 doesn't do lease buyout even from approved dealerships, that info would have been helpful before I applied. Now, I have to turn it in, dealer buy it, i buy it back from dealer as used. Oh, and probably have to pay the dealer all the money I would have saved had I just paid my buyout... Hell no!!!

Anybody know a better way to get around this?

qbrozen · March 2010

yeah, don't use Cap 1. Do you have access to a credit union?

sebring95 · March 2010

Does Mazda finance even let you buy it out directly? Many captive finance companies do not. Toyota/Lexus requires you use a dealer (not necessarily a Toyota dealer, just a dealer) to handle the transaction. The dealer buys the vehicle from the leasing company at the residual and then sells it to you. My Toyota dealer wanted $500 to accomodate (they're crooks on everything though....). So I found a small time dealer that charged $100 to cover the paperwork and it was quite easy. I wasn't financing but I would think it would be easier through a dealer anyway as they can handle all the paperwork/titles/etc. It's no different than if you traded the car in at another dealer....they just buy it from Mazda finance at the residual (plus remaining payments if you're not at the end of the lease).

There's also sometimes a provision for extending your lease on a short-term basis if you need time to shop around. Read the fine print in your lease.

rt2010 · March 2010

Been reading past posts lately -- all good info shared. Thanks...
Coming off a Honda Odyssey 2007 EX lease in 2 weeks. 12k/miles per years, 3 years

Want to possibly purchase at end of lease because nothing new really excites us out there.
$16,988 buy out price on lease + NY tax
Car is in great shape, 35k miles. Is it worth it? TMV is in $17k range. Deals for new ones have been atrocious (not even sure if we are minivan people but like I said nothing fits us). Would finance privately, paying up front for it.

Questions:
1) Does the Honda dealer make any money on the transaction or is it simply a "pass thru" for them? Not crazy about the servicing from the dealership, would prefer to give to some other dealer if someone has to make a buck.
2) It is a lease directly from Honda -- looks like no luck in negotiating. Any advice in getting a slightly better deal?
3) I am reading posts about Odyssey deals but not seeing anything in NY area. Would I be able to step up to EX-L for 3 year, 12k miles/yr, no money down for under $400?
4) Any hidden fees I should be aware of if buying out current 2007 at lease end?
5) Anyone have experience with the wear & tear issue for Honda -- car is in good shape (according to me) - minor scratches, other than that very good. But never know what the 3rd party company could say.

sorry about the tons of questions... thanks in advance. Just really disheartened with all dealers (not necessarily just Honda).

rookd68 · March 2010

unfortunately i have to go to a dealer that is cap 1 authorized

sebring95 · March 2010

I can't fathom the cap1 deal is so special it should narrow your choices of vehicles and limit what/where you buy. If you overpay for a vehicle the good financing likely won't be a good deal anymore.

lanzillotta · March 2010

Hello,

The lease on my 2006 TSX is ending 03/31 and I'd like to buy out the car. The residual value is $15,800 per the lease agreement and the TMV is 19,848. This was a pleasure vehicle and only put 28,500 miles on it during the 4 year lease so this car has some nice equity.

Acura Financial sent me letter saying I'm approved for the lease or purchase of a NEW Acura, nothing mentioning to re: the buyout.

Has anyone dealt with Acura financial on a buyout before? Do they require you to go to a dealership to seek financing or would they handle direct? Should I contact my credit union to ask for a buyout loan?

I'm a bit confused with this process and want to be more informed before I contact Acura.

Thanks for your help.

kyfdx · March 2010

First... Acura Finance and Honda Finance are one and the same..

You should be able to buy your car directly from Acura Finance for the residual amount + sales tax. They don't require you to work through a dealer.

Be prepared to get your own financing, though... I've seen some pretty lousy interest rates on lease buyouts, and some captive finance companies won't finance you, at all.

regards,
kyfdx

lanzillotta · March 2010

Thanks for your response kyfdx.

Any idea which banks are offering competitve rates at this time? I sorta don't want my credit to be run too many times.

kyfdx · March 2010

Everyone seems to be big on PenFed credit union.... I think it's open to pretty much everyone.

Drop in to your local bank branch and ask them for their rates.... they won't have to pull your credit, to tell you that..

lanzillotta · March 2010

Thanks for all your help! I appreciate it.

ljacobson · March 2010

Hi Guys,

Hoping for some advice.......

Have a 2007 Acura MDX/Tech package 42 month lease ending in June. Car is in excellent condition, has 4 new tires, and I completed the $500 30K service. Mileage allotment was 52K and I will be turning it in with approximately 36K. The residual value is $25,615.

If I purchase it would be $25,615 X 7% sales tax which means I could own the car for $27,408. Bottom line is we don't want the car anymore and are looking at sedans, but what's killing me is that I have looked at KBB, Edmunds and NADA and they all suggest a private sales price of like 31K-33K.

Should I just buy it and sell it on my own, or is this something the Acura dealer might want to just buy from me, because he could turn it around and sell it for close to 34K and make a killing?

Thanks,

LJ

sebring95 · March 2010

You could likely trade it in and get a little "equity" out of it. You might try selling to an Acura dealer or even Carmax. Buying and reselling is a possibility and I've done that on a couple leases in the past. It's a bit risky so if it would cause hardship to sit on it awhile I wouldn't recommend it. I also wouldn't recommend it if you have to finance it as that will make a private sale more difficult. Private party buyers in the $30k range can be tough to come across but with a little patience it shouldn't be too tough. I would think you could buy it out and drive it until you find a buyer. Worst case if you have trouble selling privately, you trade it in on your new sedan and most likely worst case get your tax back (depends on the state).

ljacobson · April 2010

Thought I would follow up on the outcome. I had two Acura dealerships bidding me on the car. Wound up with a dealership that took over my last two lease payments and wrote me a check for $1,400. He said they never did that before, but they had a potential buyer for the car. I noticed the next day they put in on their lot at $33,500. I guess it was win for me and a win for them.

eshin53 · April 2010

Hi,

My lease on my 07 range rover HSE is due in about a month. I had a 39 month lease (15k miles/year) with a residual of $37.9k. My current mileage is 62k. I called the dealer and they are unwilling to budge on the price of a buyout. Should I a) purchase the vehicle (market value around $35k) or b) pay the $3.3k overage and get out? Need advice (Car Man?) Thanks in advance!

sebring95 · April 2010

Are you saying the lease buy-out is $35k? Did you contact the leasing company concerning the buy-out? Unless this lease is underwritten by the dealer I wouldn't be talking to them just yet.

grandtotal · April 2010

Do you want to buy the vehicle? When you write market value is around $35K do you mean retail to buy or trade-in value or what?

eshin53 · April 2010

It would be easiest to just keep the car since my family (wife and 2 kids) are use to it. however, $37k is a lot for an 07 with 62k miles on it. when i say market, i used edmunds and kbb appraised value. on average, its coming out to around $35k.

eshin53 · April 2010

sebring95 - the lease buyout on my contract is almost $38k. i did contact the leasing company (land rover capital/cabwest) but they instructed me to contact the dealer where i initially leased it. I called them and they said that the buyout amount is the amount on my contract. one thing to note is that i made the fatal error of telling them the exact miles when they asked for it.

sebring95 · April 2010

I don't see where it makes much different. Either way you're going to take a $3k hit either through mileage or overpaying for the buyout.

Purchasing at the End of Your Lease

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