Any of you honchos ever done this? Can I bargain with the Dealer about the purchase price? Many thanks for any tips or suggestions.
OT: need advice about buying a car coming off a lease...
- Thread starter Frabjous
- Start date
The dealer doesn't have title to the car; the bank or finance company that wrote the lease does. You might want to call them after you've done research comparing the market price of your vehicle to the residual value. If the residual value is less than market, just buy it for that.
Been a long time but in my experience they don't want the car back. They have the expense of transporting it and selling it.
They aren't going to take a bath on it but there is room for negotiation.
I'm assuming it is a lease return not your personal lease but they may be the same. We purchased a lease returned vehicle from the dealer and it was no different than purchasing a new car . If the price is right, go for it. Recognize any expired warranty will not be available. The dealer has to obtain and sell so many lease returned vehicles each year. He picks the vehicle and puts it on his lot for sale at a price that he can obtain a desired ROI. The price is usually somewhat negotiable.
Lots depends on the purchase deal. Did the lease artificially inflate the residual value of the car to get the lease price down? Happens quite often and best to walk away unless the bank is willing to cut a great deal to not have to deal with the car. Banks/dealership will negotiate to some extent, but the difference in residual and actual value might be too large to be worth even trying.
This assumes you don't have mileage overages which, if you are purchasing shouldn't be in the deal, though the dealership/bank will try to include them.
This assumes you don't have mileage overages which, if you are purchasing shouldn't be in the deal, though the dealership/bank will try to include them.
you can definitely bargain with the bank.
I bought my last car off a 3 year lease for way under the price in the lease terms.
Do your research and offer low
I bought my last car off a 3 year lease for way under the price in the lease terms.
Do your research and offer low
based on the title it must be the OP's personal lease return, otherwise buying a used car off someone else's lease is no different than any used car negotiation
I have not done it but I know people that have and I have some knowledge of their experiences. The bank not only has to transport it and sell it, but they also have to somewhat wholesale it to a dealer who then has to go over it and possibly do some reconditioning. So the dealer would only pay as much they believe that they can pay to make the markup they desire.
Another factor is the climate for different types of cars is different at different times. During times of reduced sales or high gas prices more expensive cars seem in less demand and the bank won't want it back as the offers they may get will likely be lower. My old boss bought his Lexus super cruiser off lease when cars were not selling and gas was high about 10 years ago and he got it for significantly less than what the buy out was documented in the lease agreement.
So as others have said, do some research and make them an offer.
Need make/model & whether you’re at/over mileage cap....
If you’re sitting on a vehicle that rots on a lot, you’ve got little/no bargaining power ....
If you’re sitting on a vehicle that rots on a lot, you’ve got little/no bargaining power ....
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This. Your leverage depends on how desirable the car is.
Might want to check the Ohio St boards. Their players have lots of experience with leasing/ buying cars. It never appears to cost them any money so that’s great news for you!
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Might want to check the Ohio St boards. Their players have lots of experiences with leasing/ buying cars. The good news is it appears to never cost them any money so that’s great news for you.
Doubt OP has any family friends eager to extend him a loan, but maybe if he says he's buying it for his gf.
Correct, the original lease was in Michigan for 2 years. Car had just under 20k miles when my local dealer bid on it through the Ford leasing program. car was sent to Pa to the dealer where he then put it on the lot for sale. I got a great price on an almost new vehicle.
I’ve got a ‘17 Tucson lease expiring in December. We obliterated the mileage limit and have 64k on it instead of 36k. We like the car but I’m not enthused about paying 17k for a car that’s worth about 11k. What would you recommend?
Offer $11k and see what they counter with.
Assume you'll owe $6k+ for overmileage, tires, etc if you turn it in.
Another option, not recommended, but dealer will jump on it .... roll over what you owe when you turn in the car into a new lease
Call the leasing company that you pay the bill to. Tell them you like the car, and are interested in purchasing it, but not at the residual price. If they don't make an offer, throw out a really low offer and see what they say. Whatever number they give you, tell them you will think about it. Call back in a few weeks and repeat, except starting at the new number. Repeat until they don't go any lower, you've reached their bottom price. Then decide if you want it at that price. You should ideally start this 4-6 months before the lease expires so that you have plenty of options to compare it to. As others have said, they do not want the car back.
Thanks! Will definitely give that a shot.
What do you mean ‘roll over what you owe’ in option #2? Thanks
I don’t recommend it, but if you don’t want to buy the car, and don’t have the cash to pay for the excess mileage, you may be able to get a new car (either buy or lease), and the dealer/bank can add the amount you owe for the excess mileage into your new loan/lease.
Always tell them that you like it. You want them to think there is a deal to be made if they can find it. What you never want to do is tell them it is your only choice, or by far your most favorite. I let them know that too, and I attach time frames when I get serious. Something as simple as a car are a dime a dozen so I never get emotionally attached to one. Its also important to remember that these people are not typically commision salespeople, but they do have incentive to move the car.
I'm in this situation now, I checked with the leasing finance company and found I could extend the lease for up to six months at the original lease price, would get corresponding miles added and during the extended lease period all lease payments go toward reducing the residual (payoff). Reason for doing this is I like my car but the residual is too high and nobody wants car. Was told by several dealers that there are too many 2015, 16, 17 leased cars being returned and the dealers don't want them.
My perspective is that of one who is in the sales profession (non-commission, at that)... when you disclose to me that you “like” something - you’re showing your cards....
the best strategy, always, as a buyer ?
a) project indifference (brand-agnostic, but convey that you are serious about carrying through a transaction, not a tire-kicker);
b) demonstrate authority & readiness to make a decision...
c) product / category knowledge and research in hand ...
b) demonstrate authority & readiness to make a decision...
c) product / category knowledge and research in hand ...
Generally disagree with what you suggest. It is OK to tell the commissioned sales rep (car dealer) you like something; at least you will retain their interest and start the process of negotiations. Yes, you should do your research and be prepared but, remember the rep wants to sell and you have the final decision.
Helps explain why you’re stuck at the end of a lease with a lot-rock....
“Ooo yeah I like this car - I’m flattered that you’d ask me to make six add’l payments at the original lease amount ! “
Silly response from you. Lease market has changed with so many cars being returned at lease end. In past years I have returned my 36 month lease car at about the 30 month mark and was able to achieve some equity toward the next lease thereby extracting an extremely favorable next lease price. Unfortunately, as several dealers have explained there is a glut of returned lease cars; and so, no continuing equity this time around. Thus, so I have an extremely favorable lease price, and since I really like the car, and since I don't drive lots of miles, with these favorable factors why I not keep the car. Maybe in six months market changes, maybe I buy the car and maybe I just return it and get a new one. The best time to buy a car and negotiate with the dealers is when you don't absolutely have to have a car and you can afford to walk away.Helps explain why you’re stuck at the end of a lease with a lot-rock....
“Ooo yeah I like this car - I’m flattered that you’d ask me to make six add’l payments at the original lease amount ! “
IIRC, you can always turn the car in, pay what you owe and walk away so they will be stuck with it. I've done some work with a leasing company and the last thing they want is to take back a vehicle that will be hard to sell because it depreciates while they try to sell it. You're covering six months depreciation and keeping them from having to unload an unpopular vehicle is and is probably why they are happy to extend the lease. The longer they keep you in the vehicle and collect a payment in sucj a situation is a good deal for them. My guess is the deal will come down to what loses them less - selling to you below residual or getting the mileage payment and then trying to unload the vehicle.
True and good advice but always be willing to walk out the door. I once had a dealer give me a final contract pice $500 above our agreed upon price. When I got up he said "You're not going to blow this deal over $500. I said no, but it seems you are..." and started to leave. By the time I got to the door they had "corrected the error" and we closed the deal. They know if you do walk, chances are you are not coming back, so unless you are making a ridiculous offer they will likely counter.
In the end you are not buying a car, they are buying your money.
I work at a Mercedes Benz dealership and can only speak to that, but this happens quite often. We can typically buy a car coming off lease cheaper than the residual. The dealership gets their price from MB Financial, the leasing agency. We then can sell it back to the customer for less than their residual value. Many times there is enough spread to bring the car back, certify it (which adds a year of factory warranty), and sell it back to the consumer for less than residual. The car would also then qualify for any preowned incentives from the manufacturer, low interest rates, etc.
It was intended to be somewhat silly...
Care to fill me in on how the lease market has shifted since you entered into your lease? Earth-to-longago: Lease markets have not changed abruptly over the past 36mos...
Alas, the leasing arena is one littered with carcasses of amateurs and simpletons.... unlike the stock market, the lease market (automotive) is exponentially more predictable and navigable....
lease companies can readily project what the return-market will look like three years down the road as it’s a function of the agreements they write... most are averse, or even too sloppy to move residuals accordingly at Origination.... the lease company surmised there would be a glut of return-cars when they wrote your Agreement, they merely neglected to adjust your residual allowing you to shoulder burden...
For common folk, I’ve always been an advocate of them buying pre-owned vs. leasing... Buy what you can afford, resist the urge to bite on a sexy monthly payment.... Sure, that new car will draw oooh and ahhs and help you fit in with your tract-home neighbors, but leasing ultimately makes you a slave to the dealer... As such, never do i feel sorry for lessees writhing near the end if their agreements.
Unfortunately you are incorrect presuming dealers could project the influx of returning leased cars. The residual % on my car was the standard in use by dealers. With so many attractive deals on new cars the demand for returned leases diminished along with the increased capacity of inventory. In my case, and only my case, I like the car, it has few miles AND each extended lease payment, remember, I have a great deal, serves to reduce the residual (payoff). Thus I am driving an affordable car and increasing my value with each subsequent lease payment. Thus why pay more, when, as said, I like the car and it is cheaper than anything comparable I can get. Maybe in six months it becomes more affordable. Actually a dealer wondered why, with such a manageable payment I wanted to get out of the lease. Projecting, the longer I keep the car the more it depreciates and considering the continued lease payments reduce the payoff it may become more attractive to purchase. Remember, I know the car, I drive the car, I maintain the car. If in the future I choose not to renew or purchase I can walk away with just a small disposition fee due. In the interim, I'm driving a car I like at an extremely below market rate. You do what you choose, this is most convenient for me.
this doesnt make any sense. Making more payment than due, does not change the residual value of the car. That was fixed at the time of the lease, you can't change that. Now the only thing you are doing is accelerating the payments on the amount of money you owe the leasing company. in other words, if you have say a 36 month lease at $200 per month you owe them $7200, paying early or more does nothing to that figure.
Actually you are wrong, extended lease payments DO REDUCE the residual (Payoff); I have the contract to prove it. The advantage to the leasing company is they get a bit more $$$, the advantage to me is I like the car, it has low miles and meets my needs. In a cost effective manner it delays any decisions I need to make. Key: I like the car, Key: I don't need a new car, Key: it meets my needs, Key: I will never get anything less expensive. Have Fun!!!!!!!
I think you need to re read your contract. The residual value is not the payoff. The residual value is what they think the car will be worth in x# of years. Its the part of the car you arent really paying for. They get the residual value from a book.
The residual value is simply an estimate of the wholesale value of the car at the end of the lease term. Understanding where it comes from, and how it affects the price you will pay for a lease, is a bit more complicated.
Residual values, which are sometimes called lease-end values or the lease-end purchase price, are set by the company that is financing the lease, not the dealer. They are an expert guess as to what the car will be worth when the lease ends, and they are typically not negotiable. They take into account expected depreciation, historical demand for that model, and the effect of expected mileage on the car’s value. Experts also look at predicted market conditions, such as the price of gasoline, when determining the residual value. It is nearly always expressed as a percentage of a car’s MSRP, not the selling price.
https://cars.usnews.com/cars-trucks/what-does-residual-value-mean-for-a-car-lease
Lessors know precisely how many cars they have coming off lease at any given time... they even know the ****ing color of each one... The only thing they can’t predict is what percentage they will have to send to auction vs % bought-out by lessee at end-of-lease... not aware of any “deals” where you get to make 6 extra payments that are credited toward the residual value... the BUYOUT price, maybe... sounds like you’re driving a car that has a residual much higher than its market value .... not interchangeable terms
I love looking at the fine print on these too-good-to-be-true low monthly lease offers... i piss my pants when I see the residual value cited in the fine print... if there was ever a red flag waving in your face, that would be it ... #run4Zhills
Obviously you don't understand contracts, I do. My negotiations are with the leasing company, not the dealer. I'm driving a car that I love for cheap, maybe the original dealer made a poor deal. For me I'm quite satisfied with the ride I have had and continue to enjoy. Can't beat the price and it costs me a small disposition fee if I return it AND if I choose to buy the car price goes DOWN with each extended lease payment I make, and it is surprisingly low payment. So for all you experts go search for a better deal.
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