End of lease buyout.

[pmckechnie]

Lease is running out in a few months. This is the first lease for me. At the end of the lease we want to keep the car. I know the residual value but how much will it cost us to get the car? I don't think it is the same as a "leas buyout". In other words, what can I expect?

 

[TurtleBoy]

Lease is running out in a few months. This is the first lease for me. At the end of the lease we want to keep the car. I know the residual value but how much will it cost us to get the car? I don't think it is the same as a "leas buyout". In other words, what can I expect?

It should be spelled out in your lease but generally it is just the residual amount unless there is a purchase option fee.

 

[Mr. Incredible]

it will be the residual amount plus state taxes, for a lease taxes are paid on each monthly payment, taxes are not configured on the total price of the vehicle.

when you purchase out the lease and finance the residual amount the finance company with have to include the tax and pay your state dmv those taxes in order to change the title of ownership loss payee to their name from the leasing company name.


I just went through this with my wife's car last month. while every state is slight different in how the taxes are paid and handled, the transfer of ownership from the leasing company to you and your finance company is the same.

FWIW, check around used vehicles with similar mileage and options to yours, find out if they are selling for less than your residual, if they are you can negotiate with the dealer on the residual, I did it with my wife's car, we got financing through our Credit Union for 1.99% for 48 months, the residual on her car was $19,800 but similar vehicles were selling for around $15K-$17K, so we negotiated with the dealer and they were willing to go down to $15,800 if we financed through them for 5.99% for 60 months.

We took the offer, then used the credit union loan to pay off the dealer loan a week later, so they got no interest out of us, and the loan is now with our CU for 4% cheaper and 12 months less, and the payments are near the same $20 a month more with the CU because of shorter term. But total loan with CU is $18,905 with taxes and interest, with Toyota Financial it would have been $21,155.

we saved over $2,000 in interest and another $2,000 off the residual.

 

[Bourbonncigars]

so we negotiated with the dealer and they were willing to go down to $15,800 if we financed through them for 5.99% for 60 months.

We took the offer, then used the credit union load to pay off the dealer loan a week later,

Fairly common practice, and smart. As long as your credit score doesn't take a hit.

Some people wait and refinance much later then take a second hard credit check and lower their score. And they do stupid things repeatedly, like buying stuff they can't afford. Their credit continually goes to shit. They can't get financing anymore and if they do it's at 40% APR. So they keep the cycle going until there's no money left and bankruptcy is the only way out, then those of us who follow the laws of common sense and frugality get hit with hidden back-end fees, higher interest rates, and higher insurance costs.

Wow. That escalated quickly...

 

[pmckechnie]

We won't be financing the buy out. Cash works every time. I wish I had insisted on paying cash for the car but I let them talk me into the lease. Sales manager said in the end, we would pay less. I am a trusting person by nature and that is the most costly thing in my life. Best I can tell now, the car cost us about $8000 over msrp. I will keep the car but it won't go back where I got it, for anything.

 

[Mr. Incredible]

We won't be financing the buy out. Cash works every time. I wish I had insisted on paying cash for the car but I let them talk me into the lease. Sales manager said in the end, we would pay less. I am a trusting person by nature and that is the most costly thing in my life. Best I can tell now, the car cost us about $8000 over msrp. I will keep the car but it won't go back where I got it, for anything.

negotiate a lower price by letting them sell you a high interest loan, then pay off the loan with the cash, , could save you a few grand.

if you are willing to take a high interesting loan, the dealer will almost always lower the residual because they will make more on the interest, in our case they weren't losing anything by lowering the price $2,000 because they would be making $2,250 on the interest rate, and they knew if they didn't offer us the lower buy-out we would have turned it in and gone elsewhere, that was made very clear from the start, we didn't have to buy the car, we were choosing to do so, and we already had alternate plans if they weren't willing to work with us.


no dealer wants the used car inventory if they can avoid it, for them it was a matter of confusing us with numbers and terms.

My wife and I are both smart people who are good with numbers and finances, so we let them play their game and think they got over on us, then walked away from it $4,000 richer. Dealership and Toyota Financial got nothing out of us. At the end of the day we will have paid only $1,100 in interest and lease money factor. The money factor rate we got on the lease was 0.0004125 (or 0.99% interest).

 

[Mr. Incredible]

Fairly common practice, and smart. As long as your credit score doesn't take a hit.

Some people wait and refinance much later then take a second hard credit check and lower their score. And they do stupid things repeatedly, like buying stuff they can't afford. Their credit continually goes to shit. They can't get financing anymore and if they do it's at 40% APR. So they keep the cycle going until there's no money left and bankruptcy is the only way out, then those of us who follow the laws of common sense and frugality get hit with hidden back-end fees, higher interest rates, and higher insurance costs.

Wow. That escalated quickly...

no big hit to the credit score, you can get as many hard hit credit checks as you want in a 30 day cycle only the first one causes the score it, we did the CU loan and the Toyota loan on the same day, so only one hit and we offset than 5 point loss with paying off a CC in full which gained us 7 points on the next cycle. I watch my FICO and each credit service scoring systems very closely. I keep my own running tally of them from month to month, since the majority of CC now offer the service for free. I always find it amusing how different each service scoring is and what they do and don't pick up from the others.

Our credit scores are both in the mid 800s from all three services, and no real unsecured debt we typically don't have issues with securing a loan or financial service, our DTI ratio is very low, around 14%

 

[Mcc]

Lease is running out in a few months. This is the first lease for me. At the end of the lease we want to keep the car. I know the residual value but how much will it cost us to get the car? I don't think it is the same as a "leas buyout". In other words, what can I expect?

Just call Genesis and ask them to send you a statement for the buyout. Simple as that. Has nothing to do with the dealer.

 

[Mr. Incredible]

Just call Genesis and ask them to send you a statement for the buyout. Simple as that. Has nothing to do with the dealer.

That's a bit different than Toyota. I called Toyota and they told me if I wanted to do the buyout I had to go back to the dealer of purchase unless I was using my own financing.

 

[Mcc]

That's a bit different than Toyota. I called Toyota and they told me if I wanted to do the buyout I had to go back to the dealer of purchase unless I was using my own financing.

Not sure what you mean by “unless I was using my own financing”. How else would you buy out?

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[Mr. Incredible]

Not sure what you mean by “unless I was using my own financing”. How else would you buy out?

Using my credit union or bank vs. converting Toyota Financial lease to Toyota Financial loan.

 

[Mcc]

Using my credit union or bank vs. converting Toyota Financial lease to Toyota Financial loan.

So just to clarify. I did my Genesis lease buyout using my credit union. Never set foot in at the dealer.

 

[Mr. Incredible]

So just to clarify. I did my Genesis lease buyout using my credit union. Never set foot in at the dealer.

Understood, and as I said, with Toyota had I done the same I would not have had to gone to the dealer either. But since I wanted to negotiate a lower price than the residual the only way to do that was to use Toyota financing, as such I had to go to the dealer to work the deal, have Toyota finance it, then used my CU to payoff the Toyota loan.


The purpose behind doing it this way was to save several thousand on the buyout. The only way they would negotiate is if I financed through Toyota financial at their higher interest rate.

 

[daviderle]

Although it has been a while, from my one and only lease experience (first 4.6 2009 Genesis sold in GA), If the original deal was done through Hyundai finance, they will not budge one cent and the dealer wants nothing to do with the transaction, other than collecting the termination (/inspection) fee if the car is returned.

 

[Mcc]

The purpose behind doing it this way was to save several thousand on the buyout. The only way they would negotiate is if I financed through Toyota financial at their higher interest rate.

Understood. I bought mine out after a month because the MF was high so no negotiation at that early stage.

 

[Hueydriver]

Let’s assume you want to lease another Genesis at the end of the term! Do you just turn in the old lease and pick up another car and pay what? Sorry for the dumb question but this is also my first lease.

 

[TurtleBoy]

Let’s assume you want to lease another Genesis at the end of the term! Do you just turn in the old lease and pick up another car and pay what? Sorry for the dumb question but this is also my first lease.

Generally you pay nothing (given there is no damage or extra miles) for the old lease since they will waive the disposition fee if you are getting another.

 

[Hueydriver]

Generally you pay nothing (given there is no damage or extra miles) for the old lease since they will waive the disposition fee if you are getting another.

Thanks!

 

[EdP]

Generally you pay nothing (given there is no damage or extra miles) for the old lease since they will waive the disposition fee if you are getting another.

Everything is negotiable with the right dealer. I leased a car some years ago and intended to buy it and was way over on miles. Dealer wanted to move a new car so they offered to eat the extra miles if I bought a new one. I did and overall it was a good deal. .

 

[Mcc]

Everything is negotiable with the right dealer.

Not quite everything is negotiable but what you describe is fairly typical