So my lease for the 2020 GX 460 is ending at the end of this year. The original price tag on the car was around $57000. My monthly payments have been $600/mo. So at the end of the lease, I’ll have paid a total $21600. So the car should have $35400 residual value left. However, The dealer is offering $41000+ buyout if I purchase it by the end of this month. Can they really do that? Is it typically normal? Thanks
That’s not how you determine the residual value. You look at your lease document and see what it says.
So it’s a 3 year lease (600 * 36 = 21600). It ends at the end of 2022, and the end of this month is the end of February 2022. That’s 10 months away from the end of the lease, so you won’t pay 600 * 10 = 6000, which means you have already paid 600 * 26 = 15600. The car is worth $57000, you have already paid $15600, and if the value of the car stays the same the remaining amount should be $41400. That’s close to the $41000+ you were told.
Looks like you may be getting a bit of a discount considering the current price increase of late model cars.
An original owner vehicle has more value than an off lease vehicle that is a coupe of years old. You don’t know how hard someone else’s 3 year old off lease vehicle was driven. It’s probably worth paying $1000 or $2000 more just to let it be original owner or driver instead of finding an off lease model that’s a little cheaper, unless you know that you abused it. Automatic transmissions are expensive to repair and do wear out a lot faster when drivers always race away from intersections when the light turns green. Original owner increases the resale value of the car somewhat.
The dealer is not offering . He is saying that is what it will cost you to buy this end of lease vehicle . Go online and see what kind of prices a used GX 460 are being asked for.
Back in May of 2021 you were wanting to get out of this lease so why would you want to buy it now . At that time you said the residual was 36000 . Same advice now as then , talk to the leasing company and get real numbers .
Check your lease, my buyout price was in writing, if yours is that it is a contract in my book!
Anyone can end lease by paying money.
It does not matter what the contract says; not if the dealer wants to sell the car. All you have to do is ask, “You want to sell, I want to buy, now let’s talk a NEW contract…”
Worse case, the dealer says NO. You will be no worse off than you are now. Remember, he’s sticking to the contract so he can’t make it any more expensive than is it now…
Also, do as the others have suggested, find out what other models in the same condition are selling for and that might be a negotiating point. Also, as already mentioned, you know who drove “your car” and how it was cared for; not the same as if you were buying it cold off a lot…
I know my Dodge Ram 2500, Diesel, 4x4, would get me twice the price in the Southwest (AZ, NM, TX…) than it would on the east coast (NY, NJ, FL…). Perhaps your model is not one so easily sold…
REALLY? Bought mine out at he contract price, pre chip shortage, but if you have it in writing threaten to consult your lawyer if they try to rip you off.
His lease ends in December. Its February? Lease ends in 10 months. I missed part where you said you want to buy it this month.
Do you have any facts to back that statement up ?
Me also, depending on the lease buyout price if in the contract might be better to wait. Crunch the numbers.
The lease “residual value” is a complex calculation based on expected resale rates, exoected interest rates, manufacturer’s spiffs and the conjunction of Venus, Mars and the Moon but thankfully it’s clarely stated in your lease documents.
Normally it’s heavily skewed in favor of the Lessor, with the Lessee receiving the tax advantages, but very recently because of the Covid shortages some Lessees may actually find the Buyout to be to their advantage.
It’s simple, Check the resale market value, decide what the vehicle is worth to you, check your buy out and then make your decision.
And for goodness sakes, if you can’t afford a lease - lease buyout on a $60,000 car, stop whining about a couple thousand dollars resale value.
It’s downright “tacky”.and shows that you either couldn’t couldn’t actually afford to buy your car and/or you have no concept of how the rest of the world lives.
I also missed that . This person by this post and his other shows he has no idea how a vehicle lease works. That 41000.00 number is higher that the residual of what he said before was 36000.00 . That is because of the early cancelation of the leasing term . Maybe this person should just finish the lease term , turn it in and buy something less expensive.
The buyout price is on the lease contract. It says something like “at lease conclusion, the car can be bought out for $xx,xxx or turned back to the dealer for resale”
That’s one of the reasons that I take care of our lease cars like they were my own. You never know. Plus, I’ve never turned in a lease car that the dealer wasn’t chomping at the bit to “take off my hands”. It helps when you are negotiating the new lease.
Watch the contract when you sign it. For example, Honda has a clause that states that the car can only be bought by the person leasing or a Honda dealer, not a third party (like another brand of car dealer). This was rarely enforced until recently because the leasing company didn’t really car who bought the car as long as it was out of their hands. Now with the price of used cars going up so high, they want their car back.
I’m no lawyer but I know that a proper contract is legally binding. People huff and puff and threaten, hoping you won’t insist on it. I’ve heard about people getting to buy their leased cars much cheaper than what they would sell for in the current shortage.
Do you normally let people use $57,000 of your money for several years without paying a penny of interest? If not, why do you think Lexus would do that?
Lexus Financial will quote a buyout number through the customers online account or over the phone. There is a residule value that was set at the beginning of the lease but really you can buy out the lease at any time before then. The figure that the dealer quoted could very well be the number for this month.
You pay interest on a lease just like any loan but they call it the money factor.
The process to change any contract is called a “Contract Amendment or Modifiation.” It’s a simple matter where both parties sign and date it. Reference the title of the contract, if applicable; its original parties; and original signing date, so that it is clear what document you are amending. Attach the amendment to the original contract.
Now, I never said it was a “simple matter” to get the dealer to agree to this, but if the dealer wants to get some working capital and the model is not one of the HOT models that they cannot keep on the lot, then there might be some wiggle room on the residual pay off.
As an example, when we bought our 2020 Honda Fit in September of 2020, we ordered our vehicle and signed a contract and left a sizable deposit with the promise of a specific “no-later-than date.”
I’ve bought enough cars in my 70-plus years, and I was an auto mechanic at a Ford and Dodge dealership in the 1960s, to know that “puffing” and “promises” offered by dealers have all the substance of smoke, so I had the delivery date written into the contract as “time is of the essence clause.”
When the Fit did not arrive, I gave them two more days, then we went to the dealership to put their feet to the fire about their “empty promises” (By chance, when I called them earlier that day, my salesman was with another customer so I spoke to another salesman who let me know the “truck” was going to be at least another week–some “back pocket info…”).
My wife really wanted the Fit but we figured we might get some concessions for the added wait. I had planned to buy the Body Side Molding, the Cargo Cover, All Weather Mats, and the Splashguards; not from this dealer, but from another dealership who offered an on-line mail order service for all the OEM parts at greatly reduced prices.
I showed them the order form with the reduced prices, so I know that we were not being greedy and they agreed.
We waited another week and they even agreed to install the body side molding and splashguards so they would be covered under warranty.
So, I’m sure there is an “Aesop Fable” where two creatures come to an agreement to agree on something else, especially if it’s mutually beneficial…
That story has nothing to do with a early cancellation of a lease.