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Take over leased vehicle and pay the residual value to buy the car - pro and con?

jgy2001jgy2001 Member Posts: 7
edited September 2014 in Mercedes-Benz

What is the pro and con of taking over a lease vehicle near the end of the lease term, with the intention of purchasing this car at the end of lease paying the residual value?

The person leasing the vehicle is total stranger. Will plan to have the vehicle inspected by mechanic.

Thank you.

Comments

  • steverstever Guest Posts: 52,457
    edited September 2014

    Will the lessor/MB/leasing company let you take over the lease and get the same benefits that the original lessee had (i.e., the right to buy the car for the RV at the end of the lease term)?

    Assuming that's ok (and I don't know the answer), the general rule of thumb is not to buy a leased car unless the residual is close to or lower than the value of the car. If the car is worth more than the residual, then buying it lets you capture that excess "equity" in the car.

  • kyfdxkyfdx Moderator Posts: 187,472

    @jgy2001 said:
    What is the pro and con of taking over a lease vehicle near the end of the lease term, with the intention of purchasing this car at the end of lease paying the residual value?

    The person leasing the vehicle is total stranger. Will plan to have the vehicle inspected by mechanic.

    Thank you.

    A lot depends on the price...

    Edmunds Lease Calculator
    Did you get a good deal? Be sure to come back and share!

    Edmunds Moderator

  • jgy2001jgy2001 Member Posts: 7

    I assume the Kelly Blue Book & NADA calculated residual value is good yard stick to compare with.

    Is lessor/MB/leasing company do not allow somebody else to take over the lease, paying off the remaining term + residual value in cash?

  • kyfdxkyfdx Moderator Posts: 187,472

    @jgy2001 said:
    I assume the Kelly Blue Book & NADA calculated residual value is good yard stick to compare with.

    Is lessor/MB/leasing company do not allow somebody else to take over the lease, paying off the remaining term + residual value in cash?

    I don't think you can do it in one transaction. You would need to assume the lease, then it would be your option to buy it at lease end. Many banks won't allow a lease assumption within the last six months of the term.

    Edmunds Lease Calculator
    Did you get a good deal? Be sure to come back and share!

    Edmunds Moderator

  • isellhondasisellhondas Issaquah WashingtonMember Posts: 20,350

    Be careful. A lot of times residuals are set too high in order to move cars during slow times.

    You may find the residual is more than the car is worth.

  • jgy2001jgy2001 Member Posts: 7

    What is the reasoning behind not allow taking over the lease near the end of the term?

    What is the typical early buy out terms?

    In this case, lets talk about a 2013 MB GLK350 2WD, purchase around mid-2015?

  • jgy2001jgy2001 Member Posts: 7

    Also, we plan to pay off the entire balance in cash when we assume the lease.

  • kyfdxkyfdx Moderator Posts: 187,472

    @jgy2001 said:
    What is the reasoning behind not allow taking over the lease near the end of the term?

    You would have to ask the bank.

    What is the typical early buy out terms?

    It varies from bank to bank. Usually... at worst, it's the residual plus the remaining payments. Sometime slightly less. That's if the current lessee is purchasing the vehicle. Buyout terms can change for a dealer taking the car in trade. You should be wary of state tax issues, as well.

    In this case, lets talk about a 2013 MB GLK350 2WD, purchase around mid-2015?

    Edmunds Lease Calculator
    Did you get a good deal? Be sure to come back and share!

    Edmunds Moderator

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