My lease ends in March and i'm thinking about just buying it since there are no good lease deals right now. How negotiable is the residual value. Thanks!
everything's negotiable! (except lease buyouts) all kidding aside, it doesn't hurt to ask. i suppose it depends on what the car's actual value is compared to what they predicted it would be when you first signed up. sometimes tho, they aren't allowed to negotiate because they are just the middleman and it would be too much paperwork. same reason a lot of underwater mortgages couldn't be negotiated, who knows how many entities hold the paper on financing these days?
Like another member said--everything is negotiable. First, assuming your lease is with TFS, don't waste your time with the dealer--speak directly with TFS. I'd suggest researching what the car is worth in advance (check kbb.com, edmunds.com, nada.com, etc.). TFS will certainly know this info. To the extent the market value of the car is lower than your buy-out value, you might be able to negotiate. If it's higher, there's really no incentive for TFS to negotiate.
My residual is in the low 16s and kbb is in the 18s for excellent which my is i think. And it's with TFS. Sounds like I won't be able to haggle...
Your car has to look like it just rolled off the truck to be excellent. No scuffs, no scratches, no dings.
No. The lease residual amount is a hard number in the lease contract. You can't be asked to pay more than what the contract states.
That's the gamble. If the residual is too high, you walk. If the residual is too low, you buy the car (if you like it) or they have no problem reselling it.
wouldnt purchase price be negotiated during the time of leaser inception...just like with real estate rent to own?
Yes it is. Now almost 3 years later inventory is piling up. Early termination offers are advertised. Down payments disappear. Condition problems or excessive mileage aren't noticed. Prices are down. You know that you can buy your used car cheaper on the lot. They know it too. If they can get you to buy your own leased car they don't have to prep it or put it in inventory to sell someday or send it to auction.
Not with a TFS lease--the residual value is set by TFS and the dealer can't modify it (unlike money factor & purchase price).
so how do I go about negotiating the buyout price? I emailed the dealer where I leased from, the lease retention manager said residuals are not negotiable. I'm sure he was trying to get me into another lease but I don't think I want another lease given the crappy lease deals now. To my surprise, 2010 used priuses package 3 are still in the low 20's. My residual is in the low 16's. It doesn't sound promising at all.
If used cars on the lot are selling for $20 why should they sell the used car you are driving to you for less than 16? If you walk they can make $4.
You are in good shape, as is typical in car leases of good value cars. Best negotiation is with the dealer as they have incentives from mfg and leasing company to move product, cars and leases. Leasing company wants new lease, Toyota wants new car sale and in many cases, dealer wants a good selling used car. So you have three things they want and will negotiate on. Same is true with different car dealer, Ford vs. Toyota for example, but they have a bit less to work with since it is the other companies lease partner but the financial dynamics are still there and favor you. Other timing is change of model year when mfg and dealer need to get the previous year models off the lot or any time you see incentives.
So leasing any other car is not foolish? I told you the reasons... that they want a new car every 3 years and doesn't necessary mean they have or don't have a lot of money. but enough to afford a new lease. Again, I personally chose to lease because I was selling my cars and buying in 2-3 years anyway. It made more sense for me to just lease. I don't have to deal with selling.
I was told by my salesperson when I signed my lease that the buyout is negotiable. I am in Fla and leases are with SE Toyota. The sales guy said I should contact SE Toyota in 3 years. If the market value at that time for a 3 year old car is less than the residual, he said they might negotiate.
LOL LOL LOL Do you really believe that a dealer has you best interest in mind? I am sure all my post will be deleted again and I will be threaded of being band again for posting here with an honest view point.
