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Take over leased vehicle and pay the residual value to buy the car - pro and con?
jgy2001
Member Posts: 7
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.
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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.
A lot depends on the price...
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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.
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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.
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?
Also, we plan to pay off the entire balance in cash when we assume the lease.
You would have to ask the bank.
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.
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