Hi I just signed a new Volvo lease. But I know some sales folks I spoke with said get the lease first to get the EV rebate then buy it out. But how does this make any financial sense? I would still owe all the interest payments for 35 more months. Any clarity would be appreciated. Thank you.
It depends on the car manufacturer. Hyundai/Kia allow you to buy the lease early and do not charge you the rent(interest) payments. For volvo you are responsible for all the rent payments.
What car is this and where are you located?
If you buy it out immediately, you do not owe rent charge for 35 months. But the finance people don’t want you to do that b/c they lose commission.
Short answer is, you won’t. Look at your immediate buyout amount on your online account. It’s not RV plus all remaining payments plus tax.
Would love to see the contract showing that
Edit: no need. Here is a sample Volvo financial contract that verifies you are NOT responsible for all the rent payments.
1 Like
This is incorrect,
I just checked my Volvo Lease payoff vs RV + Payments Left and there is a $3000 delta
Payments left = $11k (Number online)
Buyout - RV = $8k (Buyout on Website, RV only on contract)
Total Depreciation Left = $7300. (Depreciation only on Contract)
The difference of $700 appears to be Disposition and some taxes and maybe 1 payment.
So no rent charge appears to accrue on a buyout.
OP - what does your contract say?
1 Like
This is what it states:
Payment must be made directly to Assignee for cash or a cash equivalent such as a certified check or an ACH transfer sent directly by you for the following amount: (a) the Base Monthly Payment times the number of Monthly Payments not yet made, PLUS (b) the Residual Value, PLUS (c) an early purchase option fee equal to the amount of the end of Lease Term purchase option fee set forth in Section 23, MINUS (d) the unearned Rent Charge calculated in accordance with an actuarial method. Under this method of determining the unearned Rent Charge, the monthly Rent Charges (including those for the month in which the early termination occurs) are earned in advance on the scheduled due dates of your Monthly Payments and your Monthly Payments are deemed to have been received on their scheduled due dates. You will also owe any official fees and other taxes charged in connection with the purchase of the Vehicle.
There you go.
The question is why would you want to do this? Unless you have a very high MF on the lease and can get a much lower load rate or pay cash, there is no reason to buy most EVs due to depreciation risk.
Because owning for 5+ years can easily beat the annualized net spend of consecutive leases.
Based on the OP’s prior posts it’s a PHEV.
This topic was automatically closed 60 days after the last reply. New replies are no longer allowed.