OT - end of leasing (car) | The Boneyard

OT - end of leasing (car)

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DaddyChoc

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have you ever purchased the vehicle you were leasing? was it financially wise when done?

it was yours so you're familiar with its issues (if any)
 

KnightBridgeAZ

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I've never leased, but one of the folks I know who has leased mentioned that he didn't think that lease / purchase was a good route to go. And he is in the financial service industry, FWIW. He advised me not to lease at all if I planned on keeping the car long term.

Conversely, he thought that car loans are currently a good deal with low interest rates, again, FWIW.
 
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have you ever purchased the vehicle you were leasing? was it financially wise when done?

it was yours so you're familiar with its issues (if any)
Have done 2 leases. You shouldn't plan on buying it out (or not) at the end when making your decision up front. In one case I got them to come way off the contracted buyout price and I bought it at the end. In the other case they wouldn't budge off the contracted buyout price, and I bought it then too.

It all depends on the market pricing of used cars at the time your lease expires. Actually this can be predicted to some extent, for short leases, based on recent/current new car production levels, but you would really have to know what you're doing and also you're betting there aren't going to be any catastrophic events (2008 financial meltdown resulting in GM & Chrysler declaring bankruptcy, "Cash for Clunkers" program, etc.,driving up used car prices).

Best to ignore all that and decide as if you're going to turn it in. Issues should just be financial - like why would you want to invest in a depreciating asset? And how long you want to drive it - will you still own it when it's paid off and you have no car payment (and no warranty)? And cash available for a down payment or outright cash purchase.
 

DaddyChoc

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how about if you went over the miles... and the wear and tear adds up to about 8k (combined)?
 
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I leased my 1st Lexus LS 400 after 48 months offered them a buyout price and they accepted it....I was lucky.....I drove it for 435,000 miles until a drunk driver hit me head on in Philly....The Lexus saved my life....I bought 2 other LS models since. Its a livingroom on wheels.....
 

Icebear

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how about if you went over the miles... and the wear and tear adds up to about 8k (combined)?
Then you calculate your loss to pay for the additional mileage and include it in your calculation as to what to offer on the buyout.
 

DaddyChoc

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I leased my 1st Lexus LS 400 after 48 months offered them a buyout price and they accepted it....I was lucky.....I drove it for 435,000 miles until a drunk driver hit me head on in Philly....The Lexus saved my life....I bought 2 other LS models since. Its a livingroom on wheels.....
did you initially go over the allowed mileage? LS400... I always wanted a "big boy" Lex
 

DaddyChoc

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Then you calculate your loss to pay for the additional mileage and include it in your calculation as to what to offer on the buyout.
I thought they would cancel out everything if you purchased the car/or another car!
 

Icebear

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I thought they would cancel out everything if you purchased the car/or another car!
It will be. But it is still money you already have to pay IF you don't buy out the leased car therefore you should account for the money already going out of pocket. If you owe $1000 in additional mileage that means your buyout is worth an additional $1000 in saved expense to you. So a $10,000 buyout is actually worth 11,000 to you that is the figure you need to compare to the market value as a used car. If the market value is only $9,000 essentially the whole is a wash but if the used market value is 12,000 then you are in a good position paying $10,000 for a $12,000 dollar car plus saving the additional $1,000 expense you owe for mileage.
 

DaddyChoc

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that's what I'm thinking... the buyout is about 16k but there's about 8k in wear/tear/mileage. better off keeping the car and pay the 8k difference, correct?
 
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that's what I'm thinking... the buyout is about 16k but there's about 8k in wear/tear/mileage. better off keeping the car and pay the 8k difference, correct?
They usually don't ding you for wear/tear unless you really beat it up. Excess mileage is very expensive - best to anticipate accurately and contract for the whole mileage you anticipate.
 

CL82

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Check Edmunds.com for the FMV of your car. If it's more than your buyout then you have some leverage. See what you're dealership and others are asking for your car.

Good luck.
 

DaddyChoc

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Check Edmunds.com for the FMV of your car. If it's more than your buyout then you have some leverage. See what you're dealership and others are asking for your car.

Good luck.
its about the same as the buyout... with most about a grand more than my buyout amount
 

UcMiami

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One issue of course not mentioned above - do you actually really like the car? No reason to buy it if you don't like it and the costs are about the same. And has it been problem free - while a car can start breaking down any time, they rarely go from being lemon like to being problem free.
I have never bought off lease, but my business partner did and it was a very good choice, but the buyout was significantly off the actual market price of the used make/model.
 

DaddyChoc

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One issue of course not mentioned above - do you actually really like the car? No reason to buy it if you don't like it and the costs are about the same. And has it been problem free - while a car can start breaking down any time, they rarely go from being lemon like to being problem free.
I have never bought off lease, but my business partner did and it was a very good choice, but the buyout was significantly off the actual market price of the used make/model.
significantly off... higher or lower?
 

UcMiami

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significantly off... higher or lower?
lower.
Just another thought - check the used car price for your make and model but with 2 more years and whatever you estimate your added milage would be. Most cars follow a pretty steady decline in price, but some have a 'sell by date' and their price after x years falls off a cliff. Presumably if you buy it you intend to keep it for a while, but you don't want to get burned in a few years.
 
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DaddyChoc

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lower.
Just another thought - check the used car price for your make and model but with 2 more years and whatever you estimate your added milage would be. Most cars follow a pretty steady decline in price, but some have a 'sell by date' and their price after x years falls off a cliff. Presumably if you buy it you intend to keep it for a while, but you don't want to get burned in a few years.
I peeked around and everything is just about the same... 300-1500 difference higher and lower.

thanks for your input
 

DaddyChoc

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update: lease was purchased, buyout price on actual contract was lower than online (where monthly payments were made) and lower than any vehicle with the same year and mileage.
A "safety inspection" must be done... they can do the repairs or it can be taken to your own mechanic.

Salesman/finance guy tried to say the interest rate on a "lease to own" is 4.5% (standard)... your good credit doesnt matter. He was called out after Honda Corp was mentioned saying that there's no "set rate".

its take up to 10 days for the title to come in from California... strange
 
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