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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: smarty666 (Aug 19, 2009 9:29 am) I'm not sure what MSRP really has to do with the vehicle three years down the road though. The only way to determine if the buy-out is a good deal is to compare that to the current value of the vehicle. If you can buy it out for less than market price, it might be worth considering. If it's worth less than the buy-out, then you benefited (somewhat) because you paid for less depreciation than actual.
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Replying to: sebring95 (Aug 19, 2009 10:09 am) * the msrp was $34,485 * the adjusted capitalized cost (selling price) of the vehicle that the lease was based on was $28043 * I put $2500 down and had $405/month payment at the end of the lease which means at the end of my 3 year lease I put out of pocket $16675 * if I wanted to buy the car at the end of the lease the non-negotiable buyout price was $17932 if you add what I paid out on my lease and add it to the buyout price ($16675 + $17932) you get $34,607; so if I bought the car I would have spent almost $200 dollars over msrp (list price) to keep the vehicle; to me that was no incentive or deal for me to buy the vehicle so I decided not to buy the vehicle and I leased something else from a different car manufacture what I don't understand is, shouldn't the buyout price (once added to the amount I paid out in my lease) be no more than the selling price of the car because the way this was laid out, if I had bought the car the car company would have made almost $6000 profit on me
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Replying to: smarty666 (Aug 19, 2009 10:29 am) First, the payments include interest. Interest on a lease is calculated on the depreciation amount AND the residual. Second, you are also paying tax on your payment and you are adding that to your total price for the car. Put it this way, if you bought the car and financed it, chances are once it's all said and done the purchase price,taxes and fees plus the interest would be way over MSRP.
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Replying to: volvomax (Aug 19, 2009 10:44 am) I have read on edmunds and other sites that most financing companies will or are willing to negotiate the buyout price for a vehicle at lease end because financially it is a lot easier to have the consumer buy it then the cost associated with auctioning, paperwork etc for returning a 3-4 year old car to their lot I was hoping either you are someone else knows which car manufacture fiancing companies are wiling to negotiate with you on the selling price? - from experience I know that Infiniti finance is willing to negotiate but that Toyota financing is unwilling negotiate
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Replying to: smarty666 (Aug 19, 2009 10:55 am) |
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Replying to: volvomax (Aug 19, 2009 11:03 am)
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Replying to: volvomax (Aug 19, 2009 11:03 am)
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Replying to: smarty666 (Aug 19, 2009 11:10 am) This is a business, not a charity. |
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Replying to: smarty666 (Aug 19, 2009 11:21 am)
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Replying to: smarty666 (Aug 19, 2009 10:29 am) That would be true only if there was zero interest on the lease and usually lease rates (money factors) are higher than normal financing rates. I don't know what your sales tax rate was...but assuming average sales tax is 7%...that would make your interest rate (apr) about 9.5% on the amount financed. One reason leases are usually bad deals is the high interest rate which has been proven here. Also, you need to realize these are two seperate transactions. The dealer made $XX when they sold the car to the leasing company for whatever your agreed upon sales price was. The leasing company now is on the hook for the car and they either can sell it to you or sell the vehicle elsewhere. Some of the captive finance arms (toyota motor credit for example) have incentives that can go back and forth on these deals, but essentially that's how it works.
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