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Smart Shopper Purchasing at the End of Your Lease
716 messages, Last post on Nov 30, 2009 at 8:03 AM
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Replying to: rodist (Feb 09, 2005 1:23 pm) |
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| I think they call it "Owner's Choice". | |
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Replying to: rodist (Feb 08, 2005 4:23 pm) |
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I'm considering purchasing my 2001 Toyota Corolla at the end of my lease (June 2005). Any advice appreciated: - The car is under mileage (25k) and in outstanding condition - Continually maintained & regularly driven - The buyout amount is $7k For my western PA zip code: - NADA value: Avg Trade-in: $8,025; Avg Retail $9,775 - Edmunds TMV: $8,200; $9,510; $10,923 - Kelly Blue Book: Trade: $6,475; Private party: $8,270 I've read that I should try and negotiate the price with my lending institution, and indeed, they even advertise that they "may be able to offer [me] a savings of $1,000 or more off the NADA Retail value!*" Since my buyout is less than that, that isn't ostensibly a deal, but hopefully it at least indicates a desire on their part to negotiate? If so, what the heck do I offer? I've seen it's not a good idea to tell them you're over mileage, is the same also true of being well under mileage? I saw a few comments with extended warranty offers, but my financing isn't through Toyota; would that be the only way to get such an offer? I feel fairly good about buying it at 7k, but I guess there's no reason not to ask for a better price if it's possible to get it! Again, any tips or advice appreciated; I've read the articles on this site, but most seem to apply to over-mileage vehicles.
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Replying to: erb (Feb 21, 2005 1:48 pm) 2) If this is not TFS, but a private bank, it raises the likelihood that they will bargain on the buyout price.. You need to speak to a "regional manager" or someone that has the power to make decisions... 3) The time to call is in May.. about six weeks before your lease is up.. that way they have current auction reports, and can judge what they will receive for the car.. 4) Not knowing the trim level or options on your Corolla, it is hard to get a good read on the price.. but, just about any '01 Corolla with 25K miles in good shape is worth $7K.. I doubt you can go wrong at that price.. And, you are right.. nothing lost by trying to get it cheaper!! |
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if the residual turns out to be significantly less than current market value, does conventional wisdom say that you should buy it out, since a low residual means overestimated depreciation which you've already paid for thru your lease payments? So, you may as well buy it to get the benefit of what you've paid for, or at least buy it and flip it to get some of your money back. Anything off-base with that logic?
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Replying to: bodble2 (Feb 22, 2005 7:17 pm) Rarely happens in the real-world, though.. Usually, paying the sales tax when you buy the car out will eat up any profits, if you happen to be "right side up". I've done five leases.. Only once has the car been worth the residual at lease end... One other time, the residual was less than I would pay at the dealer for a similar car, but still not worth it to me.. The key to a really good lease payment is a residual that is too optimistic, which pretty much precludes it from being a good buyout deal.. If the residual is lower than actual value at lease end, you got a bad lease deal.. regards, kyfdx
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Replying to: kyfdx (Feb 23, 2005 9:24 am) Also, from examining various lease deals via internet, I have yet to find one where the residual is at or above what I estimate to be market value. They are always less, only question is by how much. Are you aware of any model that has high residuals? I should clarify that I use strictly a non-scientific, personal anecdotal approach to estimate market value. My experience is that if you keep a car for 3+ years, assuming no accident or any other catastrophy, the car would average out at a depreciation rate of around 8 - 9 % per year (if you were to sell it privately). Whereas if I take the difference between MSRP and residual on posted lease deals, the best I have come across is a BMW X3 at less than 12% per annum. Even most of the popular Honda and Toyota models seem to come in at around 13 - 15% per annum. This leads me to conclude that the manufacturer would have to miscalculate big-time to offer a residual higher than probable market value at lease-end. I have not investigated lease deals for the really high-end stuff like MB S-Class, 7-Series Bimmer, Porsches, etc. So perhaps residuals are higher on those models? Personally I may be willing to accept a 2 - 3% difference as a cost of reduced stress from actual ownership, but I would have to think hard about a spread of more than 5% per annum. I suppose if it enables me to lease a car I normally would not be able to afford to buy, then maybe it would be an option, but the prudent side of me precludes going down that road anyway. |
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"Are you aware of any model that has high residuals? " Pontiac Vibe, base, 5sp, pwr package. $12k residual after 24 months. Won't be worth $10 in the real world. -Mathias
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Replying to: steine13 (Feb 26, 2005 11:18 am) Actually I've never checked out American cars --- maybe the American manufacturers all have over-inflated optimism for the market value of their cars.
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