@64met wrote:
@I have 7 months left on a car lease and our plan is to buy the vehicle @ lease end OR before. I called the leasing company trying to work a deal on a purchase, but they said any transactions relative to purchase would be made by dealer. So, what if any leverage do I have? I checked online and the car (2007 VW Jetta Wolfsburg) looks to be selling for $12-14k pending miles, condition, etc. Our payment per month is $311 and to purchase right now would be $12,300.00. Ideally, I just want to buy the car now. Any suggestions, tips in working out a buy out with dealer. Do I just walk in and offer an amount and see what happens? Is there any benefit to the dealer trying to sell car before lease end? Just want to know all my options before approaching dealer. Any ideas/suggestions greatly appreciated. Do you recommend just making remaining lease pmts, then buying? Or try and work a deal with the local VW dealer now and being done with it. FWIW the IR on my lease is 3%.
Thank you!
Hi!
Things including leases do not work out the way you want, or think they should.
1- You can "buy" your lease out now, but you will be expected to make your remaining monthly payments into the purchase. you contracted $XXX a month for XX months and they want that money.
2-There is no "leverage" on the dealer. On lease inception you were told what your lease buy out would be. That is what they are going to ask for your car, plus any fees or monies owed. Its not negotiable, if you do not want to pay it you keep the vehicle until lease end, then you can turn the car in, buy or lease another one from that dealer or from another brand another dealer, but the contracted amount is what they want, plus any fees you do owe.
3- Assuming it is a VW not a bank lease, you are "buying out" the vehicle from the leasing company (they actually "own" the vehicle and are "renting" it to you). The dealership is involved on the behalf of the leasing co, to facilitate the transaction and be sure it is done correctly- plus it is at their advantage to intercede if the numbers do not look good and to get you into a new vehicle with better numbers. Some Leasing companies/bank leases want early termination fees that must be paid to buy the lease out early. VW would probably just want the remaining payments and and end of lease fees.
US Bank used to have a ETF of $3,000 plus a lease term fee of $2000, so if you wanted out of your lease early you were taking a 5K hit. Most people just kept the vehicle till the end.
4- Your interest rate will be a used car interest rate depending on the mileage, age and worth of your leased vehicle, There will be no subvented rates offered. The dealership will submit your at the time credit report/ application and see if you can be financed and at what rates, you can even bring your own financing for the dealership to use. But it will be conventional rates.
5-The dealership receives a small fee from the lease company to facilitate the buy out and other then that there is no real profit for them (other then on the interest rate they offer and any add ons or warranties they can get you to buy.) There is simply no negotiating as there is nothing to negotiate. The dealership does this as a favor to the leasing company and to have th echance to sell you additional product or a new car.
6- if you buy the lease out early you will have to buy a temp tag at the dealership that day as the current plates are in the name of the leasing company and you do not get to keep those plates. (your state may vary but I doubt it)
You contracted a lease for XX months at XX mileage, and at $XXX a month payment. There is no incentive to anyone to help you out of any of those terms. You can buy your lease out, but both the leasing co and the dealership would make more money on you either leasing or buying a new vehicle, so it is simply in their best financial interests to get you into a new lease or new car purchase.
