I have an expiring lease (2016 Volvo XC90 T8 Momentum, 24mo/10k, with only 13k miles), and i’ve been shopping it around to dealers to try to get some equity out of it, but i’m not having any luck. Even when they know I’m looking to find a new lease, they say that they don’t see any equity in the car and are unwilling to entertaining buying it.
I’m not sure if all of the dealers are low-balling me, or if the true market value is just that low. TrueCar says that I should have a few thousand in equity, but not sure how reliable that is.
You will never get any equity on any leased Volvo, period. Unless the RV was in low 40 at inception (which is not your case on 24 months, obviously) and even then it is highly unlikely. I’m about $3.5k negative on 16 S60 with the same mileage on 36 months, granted it is a sedan.
You can find out almost instantly what Carvana and Vroom will offer for your car based on your description. Compare that to your residual + $350, which should be your payoff at expiration. I know KBB is sky high on valuing 2016 XC90s, so that might be where TRUECar is getting their information. If Carvana or Vroom will pay too much for your XC90, let them have it. If you can sell it yourself for something above the payoff, do it. A lot of times private parties pay too much for 2016 XC90s because guides like KBB are too high.
Take a look at what a new 2018 XC90 like yours would cost, and take into account what features on the 2018 aren’t on your 2016. A lot of options for 2016 became standard on the 2018, plus it’s a better sorted car. New XC90 T8s are scare (at least out west), and Momentums and R-Designs are relatively rare vs Inscriptions. That should help your cause, especially if you sell it yourself. Your warranty is half over- that’s a little scary.
The reality is you’ve won and don’t even know it. If your residual is above the wholesale value of the car, that’s depreciation you didn’t pay. You don’t own the car with negative equity- VCFS does.
Thanks all for your responses. The buyout is $43,350. Vroom only offered $40k, so maybe it just is what it is. Carvana couldn’t give me a quote, maybe because the car is too rare and they don’t have enough data points. AutoNation actually gave me a quote of $43,500, but they said they don’t buy “grounded” leases (i paid my last lease payment a few weeks ago).
That said, i did look around at local Volvo dealers’ websites to what they’re selling their used 2016 XC90s for. I couldn’t find one that matches my trim and miles, but if i interpolated what i did find, I estimated that dealers would sell it in the $47k-$49k range. Assuming dealers want to make a few thousand on the sale, I figured they would look to buy my car at around $44k. But my experience with shopping it around to dealers has told me otherwise.
I got a great deal on the lease ($550/mo, $0 cap cost reduction; $54k selling price, $74k MSRP). Enjoyed it while i had it!
Yup, 13k miles, T8. It’s loaded with Convenience pkg, Vision pkg, Climate pkg too. I’m in NJ/NYC metro area.
It does have a small paint chip on the rear bumper (maybe 2cm), but even still, i figure it would ding the price by $1k max. Everything else works great.
I wondered if the reason why dealers were unwilling to offer anything higher was because the dealer would be able to buy the car from Volvo Financial Services at the buyout price themselves after i return the lease, rather than buy it from me at a higher market value price. Is this something that they can/would do?
But, even then, I gotta wonder why places like carmax/vroom/carvana are looking at the same auction data as me and hitting it so low. Hell, a wholesaler should be happy to pick it up at $45k, send it to auction, and make a few bucks.
No one, other than Volvo dealers, will take on a used Volvo unless they make a killing, IMO. They will have to send it straight to an auction or get stuck with it. And even Volvo dealers will want to have at least $5-6K ($1-2K more than standard) margin in order to potentially make $2-3K, I think.
KBB low is $44K + $6,700 for low miles, high $48K + $6,700 for miles. I could see offers for $44-46K w/o paying for the miles. Those things book like a racehorse. I don’t know what the market is like in the northeast, but you got a major discount on it when new.
I think your payoff is a little higher than $43,500, but it’s not super relevant. Do you have what your exact MSRP and residual was? I think it was 59% for your car 24/10.
My suggestion would be to put it on craigslist or autotrader or whatever is used out there and ask for $48,500 for a quick sale and take what you can. VCFS might let you extend the lease so you have extra time to sell it, but you’ll need to renew the registration. If they don’t let you extend the lease, you could order a car and they will extend it. If you change your mind and don’t get the next car, there’s nothing they can do about that. Maybe work a deal on an incoming car and try to sell your current car a few weeks in advance.
What do you mean by “might”? Up to 3 months can be requested directly from the online account, so it’s kind of by default, no? Are you saying they still need to approve it and may deny extension? What would be the reason for denial then, if the account is in good standing? One must request extension longer than 3 months and up to 6 months, as far as I know.
I’ll double check tomorrow, but it’s always been my understanding (after checking a few times) that an extension is not guaranteed. It’s always guaranteed if a new Volvo is ordered. I do know that many extensions have been granted, so it looks like a case-by-case situation.
Ok, thanks. I know I extended once or twice with no problem and without ordering. But it was a long time ago. Probably they still need to do some kind of approval even for up to 3 months, but must be pretty formal since it’s available from the account.
