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I'm not aware of any finance company that will negotiate a lease buyout. Think about it. They would lose money as your monthly lease payment is dependent on the money factors. The residual value is one of those factors. Your choices are to bite the bullet or turn it in and walk away.
Precisely right!
Same here. My lease is up July 2026. Even if my residual value is slightly higher than market value, I'm buying it. This is because I love it, I've had zero problems with it, I know exactly how it's been taken care of and driven, and it only has 15K miles on it at 2 1/2 years old. These aspects are worth the potential extra cost to me.
I, too, would like to buy my 2024 at the end of the lease. I already know the residual is about 38K, but from what I see, there is no way the value of a 2024 will be within $5K of buyout. I don't know what it is worth to keep my car, but $5K seems like a high price I doubt I can stomach.
My friend is a GM for a local auto group. He's told me that if there's money to be made, they'll buy the lease turn in and then sell for a profit. If not, the auto is returned to the leasing finance company which will sell it at auction then write off the loss. This is the main reason they won't negotiate on residual value as they'll get their money one way or the other.
I agree, if the car is worth significantly less than residual, there is no money to be made, and it will be returned to the leasing company. They will then send it to auction somewhere, and it will sell for whatever market value it has. Based on my knowledge of the industry, financial institutions follow a standard path to move cars through the process to auction. Learning that path is my goal, so I can get an acquaintance in the used car industry to try to buy it. This is nowhere near what he usually deals with, but if I know where it will end up, I can get him to try to get it for me.
Try this site: https://stat.vin/
I get it, but not worth the hassle to me. Plus, you have no idea how the auto is treated between the time of turning it in and you finding it. Keep in mind that some of these lease turn ins/auctioned autos can end up almost anywhere depending on who bought them. For me, I'd rather pay a few extra K's than deal with all of that and the risk of something detrimental happening to my GV70. I look at it this way, you'd pay more for a pristine, low mileage auto anyway if buying it used. Same here, but I'm basically buying from myself with the security of knowing everything about it. I also have the incentive to do it because I love the Genesis brand, but hate the new interior on the most recent GV70. So, it's either buy mine or walk away from Genesis and find something else. My residual value is $35,500. I'm not going to find a new luxury crossover for that price and I may not love it like I do my GV70.
I suspect the price differential gap will be much less for the ICE GV70 than for my GV60. The EVs are getting crushed, and due to cashback offers, the leases were made very low monthly with a high residual. I always intended to buy it off lease, and it was a better deal in my mind than buying the car to start due to the incentives. For me, the real question is whether I will be willing to pay the difference when the time comes. If it were only 1 or 2K, then it would be a no-brainer, but if it gets up to 5K+, I would need to think hard.
You're best bet with those numbers is to turn it in and walk away. This isn't between you and Genesis the manufacturer. This is between you and the finance company. This happens with all manufacturers. I had an Infiniti Q60 that I loved a few years back. I wanted to buy it at lease end, but was $11K upside down. I turned it in and walked away. They're not going to budge on the residual value as that number greatly impacted the amount of your monthly lease payment. This would cause them to lose money on the deal and they're simply not going to do that. Especially when they can sell it at auction and write off the loss. There are many factors at play here. The most detrimental is the EV factor. Getting into that niche so early in the game is a risk as no one knew what demand would be over time and this greatly impacts resale value. I have a couple friends who bought their EVs instead of leasing them. They'd like to trade as both have decided that EVs aren't really for them currently. Due to resale/trade in value, they're stuck with them.
I bet they won’t.
The only way they won’t lose you as a customer is if you buy a new Genesis. And they probably will give you a better deal if you do but you aren’t going to impress anyone at Genesis by saying they will lose you. But please go ahead a try.
Of course you realize that there is a trade off between you monthly payments and the residual cost. Why and how do you think they made your monthly more affordable. It’s not magic and the residual they set in three years has little to do with its actual depreciation now.
I agree that this happens with all leases. I suspect the finance companies do not want the headache of always negotiating.
This makes no sense. They can account for the same loss if they sell it at auction or sell it to the lessee at a discount. They must incur some cost to take possession of the car and send it to auction. If they do a paper transaction with the current lessee, they will be able to charge some junk fees specified in the paperwork, so this end of the transaction should cost less. If they can get $1 more for the car from me than at auction, it is a win for them. For the typical lessor organization, the auction result is reasonably predictable, so it makes no sense that they would not offer it at a price closer to reality and still a win for them.
Interesting that you think they will sell the lease turn in for at least 34k.
You are comparing kiwis to pomegranates. One of the main reasons for the massive depreciation is the fact that the car is electric. With the current public perception of EVs, they depreciate very quickly compared to ICE vehicles. I did a quick comparison the other day looking at the Electrified GV70 and the ICE GV70. The EV cost about $10,000 more (+/- depending on the trim level and engine) than the ICE car when new. Then I looked at the price for the 2024 model and about 10,000 miles. The EV was about $2000 LESS than the ICE vehicle. That's $12,000 more depreciation for the EV.
Because it is MUCH easier (and cheaper administratively) to sell 20 off-lease cars at once to the auctioneer than it is to deal with the headaches of the retail public, each of whom will want to renegotiate their own best price, with separate paperwork, registrations, tax submissions, etc., etc. That is probably more like $500 per car and a lot more time and contention than just offloading them in bulk. It makes perfect sense if you view it from the corporate perspective.
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