Just wanted to know the dynamics of buying a leased car at the end of lease term. Is the purchase price equal to residual at end of lease plus sales tax? Is there any scope to negotiate that down any further from the pre-determined residual value? If you return your leased vehicle and that car is put on the market as a pre-owned car, will the selling price be higher, equal or less than the residual value? Are you able to negotiate the selling price in that scenario?
You don’t really have much in terms of negotiating room because the lease is (typically) through the car company financial arm (i.e. Honda Financial etc.). The residual is whatever was in the contract. You can buy it at that price or turn it in. The car could be worth more than that and you could buy it and sell/trade it in and make money on it or just buy it and keep it.
My Honda CR-V has a residual of about $17k, but is only worth about $14k, so I’ll be turning it in at the end of the lease. My friend just traded in (sold) a Honda Pilot that was worth $3k more than the residual on the contract and used it toward a new lease.
Not sure what the car company does with the vehicle after it is turned in at the end of the lease.
I was asked if I considered purchasing my vehicle during a call to US Bank the other day. I said ‘not at the buyout terms on the lease’. I was offered $16500 as a buyout over the phone, which was about 4k less than contract shows.
I was interested in buying my Volvo S60 off-lease during summer 2015. Spoke to US Bank two times, and both times they were unwilling to lower the buy-price. I even pointed out that local dealers were selling certified versions w/ similar miles for less than my residual. No avail, unfortunately. I even tried to do something w/ the dealer who sold me the car, but he was more interested in taking it off-lease, certifying it and selling it at market rate. A shame cause I really enjoyed the car.
I actually just bought out my lease. US bank wasn’t in for negotiating price ,however the dealer buy was $10,000 more than my buy price. Yes you pay sales tax ,however I got the sales tax check to turn in to DMV from US bank. I bought it out because,I was undecided what Vehicle I wanted to get into. I will more than likely sell mine ,I do have extremely low miles and some equity. I was actually shocked at the dealer buy…they stated it was because dealers don’t have to pay tax on the vehicles coming or going.