Leasing newb here. Really glad I found this forum. I’m currently leasing a 2016 Dodge Challenger and my lease return date is April 2019. I recently heard a story from a friend who was taken to the cleaners when he returned a car in perfectly good condition (I saw it myself). He said Chase bank was his finance company. I’m using Ally bank and looking for any Dos and Donts at the lease end as well as any general tips on how to make sure I don’t end up getting screwed with meaningless charges (to the extent I can control this).
My car is is pretty good condition with minor scratches less than the size of a silver dollar (Ally’s standard of measurement) and a couple larger scratches that my friend is going to buff out or replace for cheap.
Any thoughts? Hoping this topic helps others in a similar position.
Get a pre-inspection. I recently had my Q50 inspected before turning it in. It was banged up pretty bad, but I never bothered fixing it. I thought it was going to be $3-4k in damage and I’d do it myself at a body shop, but turns out Infiniti is only charging me ~$1,200. Some brands/banks are easier than other. The inspector told me Infiniti is pretty easy with this stuff, but if I had the same exact damage on, say, an Audi, it would have been double at least.
Generally when you lease directly through a manufacturer’s financial arm rather than a bank, they are less picky about what they consider damage, which makes sense.
If you drive less than what you are allowed and your car is in decent shape, you should just wait until your lease expires. I did trade-in and sold in past my leased cars, but mainly because I drove over the limit (I figured my fines would be greater if I turned in, than if I absorbed the cost of trade in or subsidized sale). Another reason to turn your car in too early is if you really dislike it (like I passionately dislike the transmission of AWD Acura. It’s a fine car, but dual clutch ZF made transmission just sucks).
The way it works with trade ins is very simple: go to Blue Book, Edmunds dot com and few other websites to estimate the value of your car. Most of the websites will have three columns, pricing your vehicle as a trade-in, private party and retail sale product. After adjustment for mileage and condition you will get a fairly good idea what your car is worth. You could then take it to an independent car appraiser, to confirm the value of your individual car. Dealers will usually pay you close to trade in value (in my case I was offered anywhere from a thousand dollars under trade in up to a thousand dollars above the trade in value). No dealer will pay you the private party or retail value of your car.
As I noted above, if you drove your car within the contractual limits and it has no major defect, then it doesn’t make sense to trade it in, you will loose all the money between it’s payoff amount (which is usually similar to private party value and slightly below retail). Wait until your lease matures, get your car inspected a month before it matures and then go to dealer you got it from, and couple of other dealers with different makes, and see who will offer you the best deal.
Call Ally and find out the earliest you can get an inspection and schedule that. That will give you the most time to decide if you can fix the damage for less than they will charge you.
You should compare you payoff to the car’s value as a trade-in or to sell outright to Carmax, Carvana, or Vroom. Unless one of those buyers stands out way higher than the others, figure you could sell the car for around $2K more than these wholesale bids. Then you’ll need to figure out how to pay it off without being liable for any sales tax if you want to consider that route.
If your wholesale value is well below the payoff, you probably will want to take the car to the end of the lease and let Ally and their insurance eat the negative equity.
You can always make all the remaining payments and turn in the car early. If you’re about to wear the tires down to a chargeable status, that could be worth considering. Also, if you’re about to start paying for excess miles.
Thanks for all the advice, guys. This is really helpful. Here is some additional information/context to consider:
36 mo. lease with 15k miles/year
I’ve only used 19k in the past 2.5 years! (definitely not going to request 15k in my next lease!)
I wasn’t planning on returning it early, and the comments I am seeing further confirm this
I called Ally to ask about the pre-inspection but they said they don’t provide them; instead they inspect the car 5 days or so after it’s been returned to the dealer
–> This is concerning because the friend I referenced in my original post said his car was likely damaged during this holding period and now he is being charged for those damages. Yeesh.
I am considering leasing again once I return the car in April 2019 (currently eyeing the Jeep Cherokee and Subaru WRX as favorites)
The dealer can do pre inspection when you return it and get it in writing. Unless you go to a shady dealer, they will be happy to do it and sell you a new car.
Appraise your car and look at the buyout number. If you break even on a trade or make considerable profit on your car, sell it!. If you sell it and not trade it in, do check the tax laws of your state (in some states you have to pay taxes on the sellout unless you are doing a trade in. ).
Get a pre-inspection done if the buyout doesn’t work for you.
It all depends on the leasing company. When i was with Mercedes, i loved the fact that they did the credit card test to assess the chips/dings and repair and were not at all unfair with on the damage assessment they did on cars. I was never billed once on my lease returns. All i did was switch out the tires when i returned the car and from a scratch perspective, all my scratches and dings were the size of a credit card.
I like the strategy of selling the car or trading it in to the dealer with potentially some equity to go in your pocket or into a trade-out car. But the million dollar question is, how do you get a FAIR appraisal of your car? I’ve read that using Edmunds or similar companies will give you number that is a little higher than the actual value of your car. I did read that another idea would be to ask a random dealer what he or she would pay for the car if you sold it to them, but I can’t imagine most dealers would be candid about what they would ACTUALLY pay. Thoughts on that?
As far as a pre-inspection by the dealership, I was told by Ally that they definitely cannot stop me from doing it, but it would not affect the inspection they will independently perform after the car is returned. In other words, they said “yeah, ok, good luck with that!” I’m still going to do it though, even if they won’t honor it. At least it will give me something to work with if I take the finance company to small claims court (gotta love litigious California).
I personally think Edmunds is a good source to check the value of your car. It’s very simple (choose one of the conditions, add the mileage and options your car came with and it will give you fairly accurate estimate of what your car should trade in for or sell in retail and private market. Most of the dealers I dealt with offered me something close to Edmunds’s trade in value (plus and minus $1000).
Of course you can do deeper search, you can even go to Manheim.com (you can ask your local mechanic if he has a dealer’s license, or just go there one day and make acquaintance with one of the dealers, they will allow you access under their account to the wholesale auction, and you will know what the cars are really sold and bought for by dealers), you can study black book, you can look up blue book and bunch of other sources out there. But in my opinion time and effort you would spend doing this would defeat the purpose, unless you want to be a professional dealer yourself. So, I usually go with Edmunds and similar source, that will put things in perspective for me in just couple of minutes. And it generally works fine for me (though I strongly dislike their new interface on the website, they had much better and user friendly interface). I also do a simple search on cars.com and autotrader.com (you can search anything from local market to everything within hundreds and even thousands of miles radius). Go to one of those sites and search for a car you drive, it will give you an idea what is the asking price on it in retail and private market. You can even pick up the phone , call and ask for a discount. It’s really not that difficult to find out what your car is worth (wholesale as well as private and retail), just don’t overdo it
Carmax will give you a decent offer. Carvana seems to be overpaying right now to gain market recognition, and sometimes Vroom will offer a good number. KBB trade in values are high in my opinion, but there’s also affiliated dealers in there that will deal with you directly. Those will all give you bids without bringing in the car like Carmax requires. You’ll get a good idea with minimal effort.
Asking the dealer to inspect your car is about as good as having a BMW dealer do it for you. They have no say so in the matter. You can look at your lease contract and your car and see what you think, and it’ll probably be right.
I can say if you use kbb, look at dealerships that use kbb to assess your cars worth. They will be pretty close. I struck a deal with caravana in a range that was shown in kbb. It was between the low and high number it showed.
If you use edmunds, look at dealerships that evaluate using Edmunds. I average out the number usually by running appraisals on a few sites and few in person dealerships to get an idea of ballpark. I can tel you vroom uses edmunds and I think carvana is pretty close to kbb numbers.
