Buy Out Lease or Lease/Buy New?

Hey guys! Need a little help here and thought this was a good place to ask.

I currently have a 2016 Lincoln MKC Select on lease. $400 a month. It had 15k miles per year for 36 months. I just made my last payment and am at 43,813 miles (I won’t exceed 45,000 before my lease is up). The inspector gave it an excellent review with no issues on anything. If you would have asked me a month ago, I would have said I was definitely buying out this car but I’ve since been debating on whether I should or not.

I recently checked out the new RAV4 and, out of curiosity, asked about trade-in on m Lincoln. I was told $16k. I thought this had to be wrong. The remaining residual on my Lincoln is $20,500. If I buy out my car as originally intended, I’d instantly be over $4k upside down. The dealer wasn’t wrong. KBB on my Lincoln in excellent condition IS $16k (or less).

So I’ve looked at the RAV4 and am anxiously awaiting the RAV4 hybrid which I was told at a car show yesterday will be arriving to dealers the first week of April. The hybrid will likely be $36k and I’m debating on lease vs. buy. Toyotas are known to retain their value and I have already confirmed my insurance will go down slightly ($15 per 6 months).

All of this is to ask what would you do in this scenario? Would you buy out a car you like knowing it will be upside down the minute you do so or would you opt for something else even if the cost will likely be higher?

Thoughts? Suggestions? Have any of you successfully extended your lease to allow for more time to make a decision? Mine is set to end on April 16th.

TIA!

This is how leasing usually works - manufacturers unrealistically inflate the residuals. Buying the car out makes no sense if you’re going to be that upside down. Why would you pay $20,500 for an asset that is worth $16,000? I assume you could easily find a used 2016 MKC in similar condition for less than your buy out if you really want to keep driving one. Turn it in to avoid having perpetual negative equity on a used car. Also, you can call your lender and ask to extend if needed (many threads on this).

I hope you’re not planning to lease the RAV and are comfortable paying full MSRP or close to it. No one is going to deal on a car that has just been released. If you are open to other vehicles, check out shared deals and marketplace sections to see what is ‘leasing well’.