Real-World Trade-In Values

28firefighter · July 2018

Ford's lease contract explicitly said that if we prepaid the payments and returned it before the lease expired, they would sell it at auction. We would owe the difference between wholesale value and our remaining payoff.

It is important to properly understand the terms of your captive's lease agreements. Every bank has slightly differing terms and they can choose to limit your options as much as they want.

roadburner · July 2018

@qbrozen:
One more...
Louisville, KY
1999 Wrangler Sahara
5 speed manual,
118k miles
Tires/brakes over 75% remaining
Two year old top
A/C needs evaporator(probably)- otherwise good to very good condition

xwesx · July 2018

qbrozen said:

The leasing company requires you carry a certain level of insurance. What they can do about it or how they find out if you lowered it, I have no idea.

I have had a lien-held vehicle on comprehensive (e.g,. parking) only insurance before. The holder contacted me inquiring about the lack of full coverage, and I just told them it is parked for the winter and I will reinstate full when it is back out on the road. They grumbled about it, but, in the end, just sent me a waiver form that basically said "it's your rear if you're lying to us!" I happily signed and returned it.

Wow; the filter now includes a-r-s-e in the "non-permissable" category. Sensitive bunch we have here!

xwesx · July 2018

kyfdx said:
No.. if you turn in a lease early, you are responsible for the current wholesale market value, and the difference between that and the payoff. Your actual lease payments mean nothing.

Explain this for me, please. What is payoff? Is that the $13,500? So, if wholesale value is $12,500 and payoff is $13,500, then he would only be on the hook for $1K instead of $2,400? Or, would this basically be the $4K we were considering earlier?

qbrozen · July 2018

roadburner said:

@qbrozen: One more... Louisville, KY 1999 Wrangler Sahara 5 speed manual, 118k miles Tires/brakes over 75% remaining Two year old top A/C needs evaporator(probably)- otherwise good to very good condition

Trade with nonworking AC? Maybe $2500.

andres3 · July 2018

28firefighter said:
Ford's lease contract explicitly said that if we prepaid the payments and returned it before the lease expired, they would sell it at auction. We would owe the difference between wholesale value and our remaining payoff.

It is important to properly understand the terms of your captive's lease agreements. Every bank has slightly differing terms and they can choose to limit your options as much as they want.

Well, they can't stop you from parking it in a cave, with the keys inside, and if it's still there at lease end, you return it. The waste on that is of course the mileage remaining, but it seems some leases/banks are incentivizing dust collectors and paper weights.

andres3 · July 2018

28firefighter said:
Ford's lease contract explicitly said that if we prepaid the payments and returned it before the lease expired, they would sell it at auction. We would owe the difference between wholesale value and our remaining payoff.

It is important to properly understand the terms of your captive's lease agreements. Every bank has slightly differing terms and they can choose to limit your options as much as they want.

Well, they can't stop you from parking it in a cave, with the keys inside, and if it's still there at lease end, you return it. The waste on that is of course the mileage remaining, but it seems some leases/banks are incentivizing dust collectors and paper weights.

andres3 · July 2018

xwesx said:

kyfdx said:
No.. if you turn in a lease early, you are responsible for the current wholesale market value, and the difference between that and the payoff. Your actual lease payments mean nothing.
Explain this for me, please. What is payoff? Is that the $13,500? So, if wholesale value is $12,500 and payoff is $13,500, then he would only be on the hook for $1K instead of $2,400? Or, would this basically be the $4K we were considering earlier?

I'm no expert, but my limited understanding was the payoff is what you'd pay had you kept the vehicle for the full duration of the lease:

+Remaining payments
+Residual (since your buying the car in order to "pay them off" to get rid of it early
+ Fees/charges/return/disposition costs

By keeping the car until lease end, my payoff becomes:

1) remaining payments spread out monthly
2) No residual unless I want to keep the car, so essentially the residual is my locked-in "trade-in" value, effectively.
3) Fees/charges/return/disposition costs
4) Penalties for damage beyond normal wear and tear
5) over mileage penalty if applicable at .20/mile
6) insurance and storage costs until lease end

So if you can't get your residual value trading in a car, you might as we'll keep it in a cave until you can trade it back in for residual value? As long as you are not strapped for immediate cash?

explorerx4 · July 2018

@28firefighter,
That kind of makes sense in that they don't want to sit on the car until the lease is up.

steine13 · July 2018

28ff:
"Ford's lease contract explicitly said that if we prepaid the payments and returned it before the lease expired, they would sell it at auction. We would owe the difference between wholesale value and our remaining payoff. "

exp4:
"That kind of makes sense in that they don't want to sit on the car until the lease is up. "

That kind of makes NO sense.
They wouldn't sit on it, they'd do what they'd do anyway, take it to auction or offer it to their dealer network online.
They'd just do it N months early, one more car out of ten thousands, who cares?

I'll stick with what I said earlier, "anything is possible in contract law."

Seems like I dodged a bullet when I turned my March 1 lease in on September 10th the year before. Never heard peep about it after.

-Mathias

steine13 · July 2018

Changing the subject, what is the wholesale value for this car:

2012 Volkswagen Tiguan S
80k miles, "blue" -- don't have the exact color.
Assume decent shape, dunno about tires or anything.
This is in mid-Michigan.

Thanks!
There'll be a story to go with this later.

-Mathias

kyfdx · July 2018

xwesx said:

kyfdx said:
No.. if you turn in a lease early, you are responsible for the current wholesale market value, and the difference between that and the payoff. Your actual lease payments mean nothing.
Explain this for me, please. What is payoff? Is that the $13,500? So, if wholesale value is $12,500 and payoff is $13,500, then he would only be on the hook for $1K instead of $2,400? Or, would this basically be the $4K we were considering earlier?

Generally, the payoff on a lease works just like a car loan. It declines from the adjusted CAP cost down to the residual, along with the payments. The payoff usually doesn't include any monthly finance charges that have yet to occur (which is why it's not residual+payments).

If you are buying your car out of the lease early, or trading it in, then there are likely no penalties levied from the leasing bank. But, if you want to give it back to them for disposal, then you are on the hook for the difference between auction value and payoff.

Not every bank treats it the same way, but your contract is for the lease term. If you want to break it, then you may be penalized. It doesn't have to make sense. It's no different than a penalty for early withdrawal on a bank CD. You want out, the bank uses your problem to make money off of you. It's a time-honored tradition.

roadburner · July 2018

steine13 said:
28ff:
"Ford's lease contract explicitly said that if we prepaid the payments and returned it before the lease expired, they would sell it at auction. We would owe the difference between wholesale value and our remaining payoff. "

exp4:
"That kind of makes sense in that they don't want to sit on the car until the lease is up. "

That kind of makes NO sense.
They wouldn't sit on it, they'd do what they'd do anyway, take it to auction or offer it to their dealer network online.
They'd just do it N months early, one more car out of ten thousands, who cares?

I'll stick with what I said earlier, "anything is possible in contract law."

Seems like I dodged a bullet when I turned my March 1 lease in on September 10th the year before. Never heard peep about it after.

-Mathias

I agree, it doesn't make sense. If anything the manufacturer gets a car back when it's worth more money AND they get still get all the lease payments. When I worked at BMW I inspected cars that were turned in several months early; BMW FS didn't care as long as the payments had all been made.

My father and his law partner took out open-end leases on a couple of Caprices in the late '70s. The dealer tried to ding Dad's partner claiming his car brought less at auction than it was worth. The dealer was asked for documentation to prove that and we heard nothing more from the dealer.

qbrozen · July 2018

steine13 said:

Changing the subject, what is the wholesale value for this car: 2012 Volkswagen Tiguan S 80k miles, "blue" -- don't have the exact color. Assume decent shape, dunno about tires or anything. This is in mid-Michigan. Thanks! There'll be a story to go with this later. -Mathias

Assuming AWD, about $6k-$6500

steine13 · July 2018

qbrozen said:

steine13 said:

Changing the subject, what is the wholesale value for this car:

>>There'll be a story to go with this later.

Assuming AWD, about $6k-$6500

Thanks, q!

The story is that this gem was bought used by the stepdaughter of a friend of mine.. against advice of counsel, he assures me..

Then they might have not changed the oil for 16k... which isn't good but not in and of itself a huge problem.
The utter failure occurred when the timing chain jumped a tooth or three and destroyed the top end of the engine. This is apparently a feature with this engine and starts with wear of the cam lobe or the cam follower, I'm hazy on the details... and sloppy maintenance gives just that much more opportunity for excess wear.

Regardless, the 'fix' is a $4k used engine with 20k miles, installed bya trusted indy shop. Plus $1k for the warranty. Gotta have the warranty

Before he goes down that road, they wanted to know what the numbers looked like, hence the valuation request. Of course, the happy couple was underwater on this thing back when it actually ran.

Man if I ever buy a VW again, it'll be a lease or something with the 2.slow.
Yikes.
Thanks for the quick reply, I'll pass it along!

-mathias

steine13 · July 2018

[I typed all this out earlier and somehow it got lost. Anyone else having problems? Anyway: ]

qb: Assuming AWD, about $6k-$6500

s13: There'll be a story to go with this later.

Got some text messages last night from an old friend of mine.
His stepdaughter and husband bought -- against advice of counsel, of course, he knows his stuff -- this '12 Tiguan. Just to make sure it'd get interesting, they didn't change the oil for 16k.

It turns out there is a problem with wear of the cam follower on the cam lobe -- if I got this right -- and it is exacerbated by sloppy maintenance. At any rate, the timing chain jumped a tooth or three and the engine is toast.
A replacement used engeine with 20k is $4,000. Plus another grand for the warranty. This is at a trusted indie shop, so it's either that or forget it and stop the bleeding. Which I'm betting they were underwater on this thing already back when it ran...

So the $6+ valuation makes it a tough decision. Personally, I'd cut my losses, but I have options. My hunch is they'll be better of paying for the repair. WITH the warranty, the way their luck is running. Andn then hold on for a really long time.

Thanks for the quick reply q, that helps I've passed it along, we'll see what they decide to do..

qbrozen · July 2018

Might want to do some investigating. VW extended the warranty on vehicles with the cam follower and resulting damage, I believe. Of course, not changing the oil for 16k might disqualify them if it can be proven.

brian125 · July 2018

kyfdx said:

xwesx said:

kyfdx said:
No.. if you turn in a lease early, you are responsible for the current wholesale market value, and the difference between that and the payoff. Your actual lease payments mean nothing.
Explain this for me, please. What is payoff? Is that the $13,500? So, if wholesale value is $12,500 and payoff is $13,500, then he would only be on the hook for $1K instead of $2,400? Or, would this basically be the $4K we were considering earlier?

Generally, the payoff on a lease works just like a car loan. It declines from the adjusted CAP cost down to the residual, along with the payments. The payoff usually doesn't include any monthly finance charges that have yet to occur (which is why it's not residual+payments).

If you are buying your car out of the lease early, or trading it in, then there are likely no penalties levied from the leasing bank. But, if you want to give it back to them for disposal, then you are on the hook for the difference between auction value and payoff.

Not every bank treats it the same way, but your contract is for the lease term. If you want to break it, then you may be penalized. It doesn't have to make sense. It's no different than a penalty for early withdrawal on a bank CD. You want out, the bank uses your problem to make money off of you. It's a time-honored tradition.

Its a excellent question that should be on your list of questions before leasing any vehicle. I know people who have got rid of there lease using sites like........lease Swap almost 2 years early. Bargain hunters who care less about brand are looking for lease owners to eat some of the money. It pays for the lease owner to take a hit to dump vehicle . You should save a couple of thousand in INS. money by dumping a 2 yr lease.

steine13 · July 2018

Check it out... My post, the one qb just commented on re the extended warranty...has disappeared. 2nd tome today. And ever.

brian125 · July 2018

steine13 said:
Check it out... My post, the one qb just commented on re the extended warranty...has disappeared. 2nd tome today. And ever.

You need to send a envelope to the Edmunds people to keep in good graces.

kyfdx · July 2018

steine13 said:
Check it out... My post, the one qb just commented on re the extended warranty...has disappeared. 2nd tome today. And ever.

That's weird.. I'll see what I can dig up on it..

Did you write in disappearing ink?

steine13 · July 2018

I haven't 'upgraded' to the new login nonsense, whatever that is. maybe that's it. never happened before, and happened twice today..

kyfdx · July 2018

steine13 said:
I haven't 'upgraded' to the new login nonsense, whatever that is. maybe that's it. never happened before, and happened twice today..

No... that hasn't taken effect, yet.

Maybe, it's GDPR. You didn't type in German, did you?

steine13 · July 2018

Nein.

isellhondas · July 2018

nyccarguy said:

Mr_Shiftright said:

There are usually two reasons for scarcity in modern used cars. One, there was a high casualty rate or high repair cost; two, few people ordered them when they were new.

I almost bailed on my Prelude at 54K miles when the clutch burnt out and had to be replaced along with the flywheel & thow our bearing to the tune of close to $2,500.

Is your Prelude an SH? If so, replacing that clutch is a [non-permissible content removed]! The guys in our shop hated them!

isellhondas · July 2018

Now, what did I say?

andres3 · July 2018

stickguy said:
Just drive it. One more year won’t kill ya. Put the underwater into the bank to apply to the next car.

One solution is if my Wife will trade me for a year the VW Alltrack for the Kia. This way we don't waste the Kia mileage, give it back in a year, and then both get new cars at the end of the year? I could live with an Alltrack upgrade for a year, it has the very nice Fender audio system. I'd like it a lot more if it had the beige interior instead of black, but she insisted, saying in part the baby would dirty the beige too much. If it had the 2.0T instead of 1.8T I could live with it even longer.

tj11119 · July 2018

Q, this little wagon caught my eye to haul the kids around and wanted to ask how the pricing looks. They've had it sitting on their lot for a couple of months now. They state its a CPO but not sure.

2015 328i xdrive sports wagon
31k miles, white, auto
bmw dealer is asking 24.9k
SoCal

link

Thanks

roadburner · July 2018

tijuana19 said:
Q, this little wagon caught my eye to haul the kids around and wanted to ask how the pricing looks. They've had it sitting on their lot for a couple of months now. They state its a CPO but not sure.

2015 328i xdrive sports wagon
31k miles, white, auto
bmw dealer is asking 24.9k
SoCal

link

Thanks

The base seats are absolutely miserable; I won't own a BMW without sport seats- I owe it to my vertebrae...

nyccarguy · July 2018

andres3 said:

Just drive it. One more year won’t kill ya. Put the underwater into the bank to apply to the next car.
One solution is if my Wife will trade me for a year the VW Alltrack for the Kia. This way we don't waste the Kia mileage, give it back in a year, and then both get new cars at the end of the year? I could live with an Alltrack upgrade for a year, it has the very nice Fender audio system. I'd like it a lot more if it had the beige interior instead of black, but she insisted, saying in part the baby would dirty the beige too much. If it had the 2.0T instead of 1.8T I could live with it even longer.

One thing I noticed in Cape Cod last week. Besides the plethora of Jeeps (which is the official vehicle of The Cape) was the VW All Trak. I’ve seriously seen 1 or maybe 2 “in the Wild” since it came out. I must have seen at least 2 dozen of them on the Cape. Of course outfitted with trunk racks or roof racks... (I know, I’m one to talk).

corvette · July 2018

I think I've seen two or three last-gen Thunderbirds in the past week since someone asked about them. I never see them otherwise.

qbrozen · July 2018

tijuana19 said:

Q, this little wagon caught my eye to haul the kids around and wanted to ask how the pricing looks. They've had it sitting on their lot for a couple of months now. They state its a CPO but not sure. 2015 328i xdrive sports wagon 31k miles, white, auto bmw dealer is asking 24.9k SoCal link Thanks

$23k auction value, so seems like quite a good deal.

tj11119 · July 2018

qbrozen said:

tijuana19 said:

Q, this little wagon caught my eye to haul the kids around and wanted to ask how the pricing looks. They've had it sitting on their lot for a couple of months now. They state its a CPO but not sure.

2015 328i xdrive sports wagon
31k miles, white, auto
bmw dealer is asking 24.9k
SoCal

link

Thanks

$23k auction value, so seems like quite a good deal.

Thanks Q.
Roadrunner has a point with the lack of options like sport package, but I guess at the right price I can be flexible.

preternatural · July 2018

Real world trade in/auction value?

2014 Ford Fusion 1.5L SE
black ext, tan leather int
54,900 miles
Moonroof, Navi, good condition

thank you

qbrozen · July 2018

preternatural said:

Real world trade in/auction value?

2014 Ford Fusion 1.5L SE
black ext, tan leather int
54,900 miles
Moonroof, Navi, good condition

thank you

About $9k plus or minus a couple hundred depending on location

roadburner · July 2018

2 more(sorry!):

1. 2009 Cooper Clubman
Dark brown/tan interior
automatic, nav, sport seats, sunroof
new tires, service up to date
111,000 miles

2. 2015 GLA 250

qbrozen · July 2018

trade value?

1. maybe $2k.
2. $21k-$22k.

roadburner · July 2018

qbrozen said:
trade value?

1. maybe $2k.
2. $21k-$22k.

Thanks; I'm thinking around $25K is a fair retail price for the GLA.

xwesx · July 2018

andres3 said:

stickguy said:
Just drive it. One more year won’t kill ya. Put the underwater into the bank to apply to the next car.
One solution is if my Wife will trade me for a year the VW Alltrack for the Kia. This way we don't waste the Kia mileage, give it back in a year, and then both get new cars at the end of the year? I could live with an Alltrack upgrade for a year, it has the very nice Fender audio system. I'd like it a lot more if it had the beige interior instead of black, but she insisted, saying in part the baby would dirty the beige too much. If it had the 2.0T instead of 1.8T I could live with it even longer.

I'll let you borrow my 2008 Forester for six months, then you can go back to your Kia with a renewed sense of appreciation.

andres3 · July 2018

xwesx said:

andres3 said:

stickguy said:
Just drive it. One more year won’t kill ya. Put the underwater into the bank to apply to the next car.
One solution is if my Wife will trade me for a year the VW Alltrack for the Kia. This way we don't waste the Kia mileage, give it back in a year, and then both get new cars at the end of the year? I could live with an Alltrack upgrade for a year, it has the very nice Fender audio system. I'd like it a lot more if it had the beige interior instead of black, but she insisted, saying in part the baby would dirty the beige too much. If it had the 2.0T instead of 1.8T I could live with it even longer.
I'll let you borrow my 2008 Forester for six months, then you can go back to your Kia with a renewed sense of appreciation.

The '08 or the'13?

I should have said one solution my wife might consider doing and is thinking about. Not set in stone she'll do it. I think a lot of it is riding on how much of a guarantee she gets from me for a great car in a year's time.

If I promise "cost is no object" I guarantee she'll do it.

qbrozen · July 2018

roadburner said:

qbrozen said:
trade value?

1. maybe $2k.
2. $21k-$22k.
Thanks; I'm thinking around $25K is a fair retail price for the GLA.

ehhh... probably a little on the low side. Remember, trade values aren't auction values. $25k MIGHT work if it was just a used vehicle. CPO? Asking price is about fair.

stickguy · July 2018

Just to compare, local place (good reputation, nice merchandise) has quite a few 2015s with various options, just not CPO, so generally cheaper.

http://www.eimports4less.com/inventory.aspx?_used=true&_make=mercedes-benz&_model=gla&_yearfrom=2015&_yearto=2015

explorerx4 · July 2018

I can't believe GLA's have been around since 2015.

corvette · July 2018

Don't do it, RB! Don't buy a Mercedes Rogue. :@

qbrozen · July 2018

No turbo in a Rogue. :b

roadburner · July 2018

corvette said:
Don't do it, RB! Don't buy a Mercedes Rogue. :@

It's my wife's choice; and better a 7 speed DCT than a CVT- I HATE them...

roadburner · July 2018

stickguy said:
Just to compare, local place (good reputation, nice merchandise) has quite a few 2015s with various options, just not CPO, so generally cheaper.

http://www.eimports4less.com/inventory.aspx?_used=true&_make=mercedes-benz&_model=gla&_yearfrom=2015&_yearto=2015

The CPO we are looking at is pretty well equipped- bi-xenons, Burmester audio, navigation, AMG wheels, etc.

Sandman6472 · July 2018

I had a GLA as a rental back in March and the gas mileage was pretty dismal, and I do mostly highway miles. So bad that after 3 days, I returned it to Enterprise and switched into a more economical vehicle. Nice enough vehicle but sucky mpg's!! Would thing the Clubman would be a bit better here.

The Sandman

28firefighter · July 2018

I thought the GLA only came with Harmon Kardon as an option, not Burmester.

roadburner · July 2018

28firefighter said:
I thought the GLA only came with Harmon Kardon as an option, not Burmester.

I did too- but the build sheet says otherwise...

Real-World Trade-In Values

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