Lease buyout tips/tricks?

My best 'Tip' is never lease a car.

 

I have not personally experienced this, but friends have had some success in dealing with manufacturer finance arms near the end of the lease. Buying the car directly saves everyone involved the hassle of inspecting the lease-return, and prepping the car for sale. Also, you don't have to pay to bring the car to their idea of "showing only normal wear and tear," and you don't pay for extra miles over the terms of the lease. One friend was contacted by GMAC a few months before his lease was up, asking him about his plans. He told them he was undecided, and over the next couple of months, the deal to buy got sweeter. I think the bottom line is going to be whether the wholesale/auction price of the car they will get is going to be higher or lower than the buyout price. If the car is a hot-seller, with a good resale, Toyota Finance may gamble that they can get more than your previously contracted residual. If there is lower demand, they might be willing to negotiate a lower buyout for you. As the time gets closer, you might be able to comparison shop for a used car just like yours, with similar mileage, to help establish the possible selling price.

 

Why do people think paying for or leasing a new car every 3 years is a good financial investment?

Unless your house is paid for and you have zero debt it is foolish at many levels. It is a Prius. It is not a car meant to impress.

A lease has to be one of the worse investments one can make. Yet dealers talk people into them every day. The number one reason is lower payments. It amazes me that people make foolish decisions and do not care about how much their poor decistion affects them in the future.

Such is life.

 

TFS owns the car, so it's them (not the dealer) who decide if they want to offer you a lower buyout price than the one stated in your lease.

 

sometimes lease specials are better than buying a car. u end up paying less than actually buying a car in the first place. if u know how to do calculations. there are pros and cons of leasing a car. when u get a good deal and if ur buyout is calculated to be about the same or sometimes less, then i say go with the lease because u never know whats gonna happen in 3 years. 1st of all u might want to change ur car after 3 years and after lease u are out. easy as that but with the the purchased car u'd most likely lose money when traded in and u would have payed extra tax in the begining of the purchase because u have to pay for the tax up front when u buy a car vs. when leased. u pay tax for payments only not for the whole car up front. finally and most importantly in my opinion is when u get into an accident. when ur car is been in a accident, than ur car value drops. its inevitable. when u lease a car, after insurance fixs the car and u drive the rest of the term and u just return it and thats it. but with my prius, lease deal sucked thats why i've bought my prius. LOL i've leased many cars and sometimes bought them afterwards with great deals on the buyouts....but in the end a car will never be a investment its necessity and it will always depreciate in value. a lease is paying for estimated depreciation within that term of lease. that's it. u think u pay more because a car depreciates more in first 3 years.

 

Clymberz didn't seem to me to be asking advice about leasing vs buying, but rather for tips on negotiating the best buyout price at the end of his lease. That said, I have to agree with tihsad that there are certainly times when leasing makes sense for some people. Without knowing the facts or reasons why a person leased in the first place, it seems rather judgemental to castigate that person for his personal decision. I have never leased a vehicle for myself, but have done so on behalf of someone who felt it made sense to him. It is simply a means of financing, nothing more. It makes the tax write-off calculations relatively easy for a business vehicle, for example.

 

I have never classified buying a new car as an investment, ever. They are an expense... in most cases you'll lose half the value in less than 5 years. that's probably true unless you bought at VW TDI in the early 2000s and then sold it when they quit selling them in america for the couple of years (2007-2010 or so)

here's why I leased a prius C. It's a 3 year lease, and I need a car to get to work. My old car was paid for, and I nearly paid off a 10k loan with the proceeds from the sale of my old VW, and so that loan payment was gone. now, i pay essentially the same monthly payment as the loan payment was, and for the next 3 years, my monthly cash flow more positive, because I'm using less than half of the fuel, and won't have any worry of maitnence and repairs (new car=warranty).

the only difference being that in 3 years I won't have a even more worthless VW rabbit that gets avg of 26 MPG. Overall I will still lose money, but I didn't have to do a big down payment now to get into a new car that gets 55mpg, and i feel good about that. With the MPG technology improvements I suspect I'll be able to get a car that does even better in 3 years.. maybe i'll decide to buy it and keep it for 10 years or something...

I don't expect that this car will be an investment, but however I do think it will be worth more than the residual at the end of the 3 year lease, and that's especally going to be likely if gas prices go up or even stay at the level they are at now...

 

You have to love people that figure out their finances based on what payments they can afford in a month.

Dealers love selling cars on how much you can afford a month.

Do you think that is the goal? Lease a car and hope the residual is lower than the car is worth and make a couple hundred dollars?

Really what you are doing is paying leasing fees on a new car for three years. The first three years is when a car depreciates most. Then you are turning the car back in and getting a new one only to eat the depression again.

You can gamble and maybe save a couple of hundred dollars beating the residual value or you can save thousands by not putting yourself in a new car every three years and eating a large portion of the depression each time.

 

My wife leased a 2007 Corvette Z06. She put 24,000 miles on it during the lease period. She decided toward the end of the lease she wanted a Mercedes Benz. Because of the condition of the Corvette and the low miles the dealer took her Corvette in on trade and wrote her a $10,000 check. Key is to trade it in before the end of the lease if you think it's worth more than the residual.

If you have an excellent FICO score and don't keep cars much more than 3-4 years I think with the cheap internal lease rates leasing is a great alternative to letting the bank hold a hefty down payment just because you felt the need to own.

To me, the Prius gets new gizmo's and gadgets with each model year just as most every other car does. And there are a few gizmos and gadgets out there now that even my level 5 doesn't have. In 3 years I want a new one just to keep up on the latest stuff available in a car. At the end of the lease I hand them the keys to my 3 year old Prius, they give me a repeat customer loyalty discount and I get another new level 5 that smells nice inside. I just hope they don't mind that I had the windows tinted.

As a bonus, the standard warranty on a Prius is 3 years. They don't hassle me about buying extended warranties during the transaction because it's a 3 year lease...and with 3 year leases I always have a car under warranty.

My dad had an old saying which I found to be almost always true. You either pay car payments or when it's paid off you pay repair/maintenance bills (tires, brakes, general maintenance like wiper blades, radiator flush, cooling system service, tranny repairs, etc.). Id rather just drive a car >3 years old.

 

I always buy my cars..

Nexus 7 ? 2

 

What do you do for a living? What is your credit score?

 

Because it is a good financial transaction for them. And buying a car is not a "financial investment" no matter how one does it since it is a resource consuming fast depreciating item. Cash is king in this depressed economy with high risks financial markets, insecure employment markets, bankrupting health care system, so keeping ones cash vs. dumping it into a cost center like a car makes a lot of sense.

If one wants a new car every three years and to keep total car expenses low both financial and maintenance, leasing is the way to go. Plus there is the fun aspect of promoting and using the latest technology and getting the best fuel efficiency possible and making a difference.

As to the original question, you will likely make a better arrangement with the dealer with whom you are buying the new car as they have room to move on both the old lease and the new one and the new vehicle. Mine offered to buy my Prius back at no charge after 30 days since he could roll it into a new vehicle purchase.

 

ProximalSuns what is your credit score?

 

The only problem I see with making arrangements through the dealer is that he is looking out for #1, which means he is going to profit one way or the other. He has to pay the residual on the lease in order to resell the car. If he can negotiate to lower that residual, he is going to make a higher profit when he sells it. But, as I said in an earlier post, the lessor holds the cards, along with a contract setting the residual. The dealer has no responsibility to take the car for resale; it belongs to the finance arm or bank holding the lease, and they take the profit or loss if the car goes to auction.

Why is that anyone else's business?

 

It is a direct reflection of one’s ability to make solid financial decisions.

 

Actually, it is more an indicator of one's taking personal responsibility for making on time contractual payments or simply keeping promises one has made.

 

I leased and I have a perfect credit score.

 

If you live paycheck to paycheck it will reflect on your credit report. Most people that lease are looking for the lowest monthly payment they can get. They do not look at the long term loss of money getting a new car every 3 years.

Whats your score?

 

Wrong on all counts as any auto finance will tell you and as you learned, or at least we're told here, learned, apparently not.