Edmunds dealer partner, Bayway Leasing, is now offering transparent lease deals via these forums. Click here to see the latest vehicles!
Options
Popular New Cars
Popular Used Sedans
Popular Used SUVs
Popular Used Pickup Trucks
Popular Used Hatchbacks
Popular Used Minivans
Popular Used Coupes
Popular Used Wagons
Comments
But I'll also admit that I can negotiate a better purchase deal than I can a lease deal. I understand how lease payments are determined (residual values, money factors, etc.) but I've always been able to hammer out a purchase deal that's a better deal in the long run. Of course, the purchase deals have significantly higher payments, which highlights one of the most attractive aspects of a lease- lower monthly payments!
This IS different in that the lease company is also a licensed car dealer and holds title on the car, so they are in effect selling the car at the end of the lease to a 3rd party (with the lessees blessing). No different from what I have done in the past, but had to pay a dealer for the service. Now, if you wanted to buy one of my on-lease cars we would have to find a dealer to pay for the paperwork, since I would have to pay sales tax to buy it off lease and then you would (likely) too. If you lived here you would for sure. Get a dealer to handle the paperwork then you could buy it for my buy out price plus what the dealer charges and then pay tax when you title it at home.
I helped my youngest son lease a new Civic LX sedan w/auto this year. With the cheap lease and incentives he is paying < $200 tax included with only first payment and tags paid at signing. We ran the numbers with the discounted financing at the time and it was a lot more. Even working part time while he goes to collegel he can afford a sub $200 car note and insurance - and drive a new car under warranty. If they offered 0% financing (and they were not at that time) it would have been $100 or more a month including tax to finance for 60 months compared to the lease.
Another hidden factor in most folks lease VS buy thinking is that the majority of folks trade in their used cars and get ripped off by the dealer. If you sell your used car and pocket the equity, then you are doing a lot better - but most folks do not want the hassle. So they always trade before they are paid up, lose on the trade, and get something new. Much better to just lease, return, lease. So nice to shop for a new vehicle without a trade. Many folks tell you they always bargain the dealer up on the trade, but if you are paying wholesale (at or below invoice less incentives) for a new car then you are going to get auction money for a trade - unless it is something highly desireable to the dealer. If they give you decent money for your trade, that is coming out of the new car or you missed an incentive in your pricing.
Any suggestions or similar experiences? Thanks.
If the price in the lease contract is more than the vehicle's current value, don't even consider buying it. Another important question to ask will be regarding the Powertrain Warranty! The 2008 Jeep Grand Cherokee had a 3yr/36k Bumper-to-Bumper Warranty and Lifetime Powertrain Warranty (unlimited miles) BUT only for the ORIGINAL OWNER. Will the Lifetime Powertrain Warranty apply if you purchase it...or will your purchase be seen as a 'transfer' of ownership and invalidate it???
In all honesty, I'd consider all my options before making a decision to purchase it. Consumer Reports ranks the 2008 Grand Cherokee V8 reliability as being 'Poor' and that would make me reluctant to purchase the vehicle for the long haul.
I'm guessing that you haven't driven a 2011 Grand Cherokee yet? I'm fairly certain that once you drive the 2011, you'll be chomping at the bit to turn in your 2008 for one! The interior is amazing, both in quality and appearance/function. The ride and handling are top-notch, as good as anything from Cadillac or Lexus! In my opinion, it's easily the best looking SUV outside, too.
If I'm not mistaken, your '08 Overland has the 5.7L 'Hemi' V8 (standard on the '08 Overland). All 2011 Grand Cherokees have Chrysler's brand new "Pentastar" 3.6L V6 standard. It makes 290hp vs. 330hp in your current 5.7L V8 and it's plenty of power for the 2WD Overland (0-60mph in under 8 secs). It's also rated at 16mpg city and 23mpg highway vs. 13mpg city and 19mpg highway you get now....a 3-4mpg improvement! The 5.7L V8 is still offered as a $1495 option for those who need/want it.
Sticker price for the 2011 Overland 2WD is $39,190. Unless you want a Rear DVD Entertainment System, Towing Package, 5.7L V8 or the pricey high-tech Advance Warning & Adaptive Cruise Control Package, there aren't any other options. The Overland's base price includes 20" wheels, Power Moonroof, Heated front & rear seats, Ventilated (cooled) front leather seats with contrasting edging; Heated hand-stitched leather steering wheel with real wood upper trim and power tilt/telescoping; soft-touch leather door trim panels, dashboard pad and center armrest; Keyless Enter-N-Go (keyless entry, push button start); Power Up/Down Remote Liftgate; Alpine Premium 506-watt 9spkr audio system; rain-sensing wipers; UConnect w/ GPS Nav, SIRIUS satellite radio & traffic and integrated phone capability. You get the idea...a LOT of FEATURES for the price! (Can you tell that I really want one of these?)
The Overland 2WD is selling for around $37,100 ($2000 off MSRP) and there is a $1000 Owner Loyalty Rebate currently that would bring it down to about $36,000. Low APR financing is also being offered at 3.9% for 60 months or 5.9% for 72 months. $36k, with $3k down pymt, financed for 72 months at 5.9% would be about $550/month OR 60 months at 3.9% would be around $615/month.
Keep in mind that incentives and discounts will probably change over the next three months. Newly redesigned vehicles usually aren't introduced with heavy incentives and dealers try to avoid discounting at first, but I'd be willing to bet that deals will be better a few months from now! GOOD LUCK!
I have done a ton of research on the new GC Overland and am as impressed as I can be. I could probably just take one home without driving it, that's how much I like it. I've been very happy with my '08 GC, and for the '11 to be so much better, well, let me just have it already! My problem is, I got such a phenomenal deal on the '08, it will be difficult to match, and also, I'm having problems locating the vehicle I want within a 300 mile radius of where I live. I want a red Overland, no rear DVD, no Adaptive Warning/etc., but I do want the Towing package. Right now I'm leaning toward the V8 but could go either way. I live in central Arkansas (just moved from the Dallas area) and am have been looking at dealers in both areas. One dealer near Fort Worth had an internet price on an Overland of $6200 off MSRP. Not my color tho.
Have to figure out my financing options too, to see if I can do better than what they are offering. Maybe going with an outside finance co. will get me a better rate. Or, if the 08 Jeep is worth more than the residual, sell it to CarMax and put some & down. Or would that void my Loyalty Incentive? Can you get gap insurance on a purchase? I've leased for so long I've forgotten what purchasing is like....
Thanks for the enthusiastic info on the Overland. It is what I want; I just don't know if I'll be able to make it happen or not. Will keep you posted.
Nina
The vast majority of Inferno Red Overland models seem to have the Dark/Light Frost Beige interior color, is that the interior color you would want? Red is also available with Black interior (saw one or two 4WDs so equipped) and will be when the special Saddle Leather trim is available for a slight upgrade charge.
I only spotted one Overland with the 3.6L V6 and it was 4WD, so the 5.7L seems to be almost a 'mandatory' option at least for dealer stock units! You'd probably have to order one to get an Overland 2WD V6 in Red with the Trailer Tow Group. Much easier to just find one out of dealer stock like the two above!
Regarding the Owner Loyalty Rebate, here are the details-
Loyalty Bonus Cash is available towards leasing or retail purchases to customers with a Chrysler, Dodge, or Jeep lease that expired within the past 60 days or will expire before August 3, 2011. Lease turn-in or trade-in is not required. Offer is transferable to immediate family members residing in the same household. See participating dealer for details.
The vast majority of Inferno Red Overland models seem to have the Dark/Light Frost Beige interior color, is that the interior color you would want? Red is also available with Black interior (saw one or two 4WDs so equipped) and will be when the special Saddle Leather trim is available for a slight upgrade charge.
I only spotted one Overland with the 3.6L V6 and it was 4WD, so the 5.7L seems to be almost a 'mandatory' option at least for dealer stock units! You'd probably have to order one to get an Overland 2WD V6 in Red with the Trailer Tow Group. Much easier to just find one out of dealer stock like the two above!
Regarding the Owner Loyalty Rebate, here are the details-
Loyalty Bonus Cash is available towards leasing or retail purchases to customers with a Chrysler, Dodge, or Jeep lease that expired within the past 60 days or will expire before August 3, 2011. Lease turn-in or trade-in is not required. Offer is transferable to immediate family members residing in the same household. See participating dealer for details.
Finance folks-- do they typically waive the turn-in fee if I buy/lease a new vehicle? Right now it appears that the trade-in value is right about what I owe. Do you think it will drop considerably by March? If I'm going to buy a new one, should I pull the trigger now or wait?
Would love some opinions.... just not sure if I want to buy the old one or get a new one. The new model has seduced me...
Odds are, there is a pull ahead program and you could even swap it out now while they waive your remaining payments.
'11 GMC Sierra 1500; '08 Charger R/T Daytona; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '08 Maser QP; '11 Mini Cooper S
I agree that the buy now number is fishy - the buy today price is $3,093 higher than the residual + $150 price and you only owe Dec, Jan, and Feb payments. So it seems a lit higher to buy now that it should - unless they have figured in some taxes or something in the today price.
If your goal is get a new ride, then see if a dealer (like carmax) will give you the buyout price on it today. If they will, then let them have it and get a new ride. If you can't find a dealer to cover the buyout, then just turn it in March and get your new vehicle.
Richard64
The last three years of payments are already a sunk cost, so it is not as easy as $38k for a three year old car. You are not seeing that money again no matter what, so it really is $21k-ish for a 08 vs. $37k for the 11. If you want the 11, buy it because you like it, not for resale, etc. Just my thought.
23 Civic Type-R / 22 MDX Type-S / 21 Tesla Y LR / 03 Montero Ltd
Plus, if a person is considering leasing new instead of turning in, I tend to think they're at least halfway to wanting a new vehicle. If the '08 is purchased, then the OP changes his/her mind and wants to sell it soonish, then the overall cost is likely to be greater than a new purchase or new lease.
My first question is usually, "are you happy with your current vehicle?" If the answer is "very," then of course the best financial decision is to buy it. But that's not always the only factor.
MODERATOR /ADMINISTRATOR
Need help navigating? kirstie_h@edmunds.com - or send a private message by clicking on my name.
Share your vehicle reviews
23 Civic Type-R / 22 MDX Type-S / 21 Tesla Y LR / 03 Montero Ltd
Personally, I'd want to get out of the whole lease "thing". Buy your current A4 if you like it. Finance the residual if you have to. Pay it off over whatever period of time that requires. That way, when you're truly ready to buy another car, you can use the current one as a down payment and start the cycle all over again (if you choose). You're current car has about another 6-7 years of life left before some of the repairs will turn costly.
Good luck!
P.s. it seems dealerships are unwilling to negotiate buyout price, but any chance paying in full will give a little sway?...the more saved the better.
It's worth a shot, before trying to do it the other way... much cleaner..
Edmunds Price Checker
Edmunds Lease Calculator
Did you get a good deal? Be sure to come back and share!
Edmunds Moderator
Yes, I'd shop that rate around. If it's within the same 30 days for say, a car purchase, it won't hurt your credit rating. Ask your bank or credit union. At least tell them you're doing so... you might find the rate magically decreases if you've got good credit when you're shopping around.
MODERATOR /ADMINISTRATOR
Need help navigating? kirstie_h@edmunds.com - or send a private message by clicking on my name.
Share your vehicle reviews
Edmunds calculates the Retail Value at around $25,200 and KBB is a bit higher at $26,400. If your car has any options other than the Cold Weather Package that you mentioned, the value would be a little higher. I checked AutoTrader listings for 2008 328xi Sedan with similar mileage and the non-CPO listings were in the $24,800-$27,500 range. Based on that, the Edmunds Dealer Retail Value of $25,200 is accurate, maybe even slightly conservative. BMW dealers are advertising CPO examples of this model with 30-35k miles for $29-$31k!
Purchasing it for $24,000 will actually save you $1800 in fees/excess mileage, so it's actually $22,200 plus tax/doc fee to buy it. If you like the car and want to keep it, this looks like a good deal. If you aren't crazy about the idea of buying it, turning it in and walking away won't be a financial disaster either. Granted, you'll have to pay $1800 just to walk away with nothing, but that may be a small price to pay if you don't want to keep the car!
About the $1800- I'm assuming part of it is for the miles overage, but you also menitoned 'damages'- what sort of damages? If you decide to turn it in, are there any items you could have repaired beforehand that would be less expensive? Are you comfortable that $1800 is an accurate estimate of what you will actually owe?
In speaking to my dealership, I found out that the extended maintenance that runs about $2000.00 or so does not cover a good portion of the major things that could go wrong with your vehicle and that a separate "mechanics warranty" would have to be purchased in addition to the "generic" extended maintenance warranty for a total of close to $6000.00 for both; will cover 6 years/100k miles, or something along those lines. BMWs are pricey to own so don't go into purchasing your 328xi without getting details on extended warranty costs.
I just had to get something replaced on my vehicle that required some extensive maneuvering just to get to whatever little piece they needed to fix/replace; the price for the new part was minimal but hearing that they spent almost 20 hours working on my car and knowing that the labor rate is $145.00 an hour .................imagine waltzing into your dealership, returning your loaner to pick up your vehicle and being handed a bill for upwards of $3000.00 due on the spot?
Just keep that in mind as you consider taking on ownership of your vehicle. Talk to your dealer as I think the mechanics warranty may be localized while the “generic” extended maintenance warranties, I've read, can be shopped for at various dealerships for competitive pricing. Ask all the questions and get all of the pricing details in advance so you are fully aware of what happens once that car is officially all yours.
The way I see it, you pay the finance charges for the entire loan amount and you pay down a fixed amount of depreciation.
At the end of the leasing period, the actual value of the car is either more than or less than the residual price.
If the value is more than the residual price then you simply buy out the lease. In this case, you have lost nothing over buying the the car originally.
If the value of the value of the car is less than the residual price (and assuming you did not exceed the miles) then you hand over the car to the leasing company.
The above assumes that the buying and leasing financing rates are the same (which I am finding is not a bad assumption).
So - if I am doing the lease math correctly (and for the financially inclined) the leasing company is selling a call and a put option to me at a strike (residual price) for a fixed expiration (lease term) and doesn't seem to be charging for it. Leasing always seems to be financially better than buying because I have no option there - I own the asset and am exposed to the upside as well as downside.
Appreciate any feedback.
Thanks.
The rest usually comes down to fees, additional insurance costs, required gap coverages, possible mileage/condition charges. Plus you're required to make a financial decision at the end of the lease. Even if you give it back, you have to guy buy a new/used vehicle. If you go into it planning to buy out at the end (and finance it) you'll end up spending a lot more in interest over the full term. Rarely can you buy it out at the end and make any money on it. There may be some collateral but there's usually quite a few fees completing the buy out and then whatever costs you have to sell it.
IMHO, the average consumer is far more likely to spend more money on a lease than financing. They either don't understand the terms, get charged too much cap costs, or are only going that route for the cheap payment.
Jeep has 36K miles and it's in perfect condition.
The only way you might come out ahead is if you tried to sell it privately...but obviously you'd have to get at least more than the tax to make it worthwhile.
For many years I have simply negotiated a vehicle price and then let the dealer structure it to fit the needs of the dealership. If I negotiate a price of $20,000 that is the price I will pay. I am always happy if the dealer structures the price as $19,800 for the vehicle and $200 for a documentation fee. Sales taxes are not applied to this fee, which actually makes my out the door cost a bit less.
The key is to never let the dealer add any fees, other than those required by the Government such as sales tax and plates, to the price a customer is willing to pay for a vehicle. If a particular dealer insists on adding an outrageous fee (such as those in Florida or Virginia) to that pricet the customer should simply walk away. There is always another dealer from whom a car can be bought.
Customers need to recognize in any car deal it is actually the salesperson who is dependent on the customer. Once a customer walks out the door, the salesman has no assurance the customer will return to buy the vehicle. My experience has shown not many dealers really want to lose a sale over a documentation fee which, after all, is not a cost to the dealer which needs to be covered in the sale.
Telling people to walk away simply means they won't be buying a car in that market, which may mean the whole state or region. Better advice would be as you said, work from a total number.
Ideally we would have just purchased the car originally -- I recognize the financial shortcomings in going the lease-buy route. Given our current circumstances, though, it seems most in our favor (and within our budget) to purchase the car (which is in great shape) and make the move to buy a new car a few years down the line.
OR --- do we turn it in and buy a different, more expensive, used car now? Thanks for any input!
The dealer is wrong about the mileage (assuming it's a Honda Finance lease). He is likely telling you that, to incentivize you to buy a new car from him. I'm pretty sure you can buy your car from Honda Finance, directly, without involving the dealer, once the time comes.. (it used to be that way).
Edmunds Price Checker
Edmunds Lease Calculator
Did you get a good deal? Be sure to come back and share!
Edmunds Moderator