I’m a ways away, but is there anyway to track a vehicle (Genesis) that I return after a lease and then purchase at auction?
It is probably not possible. Better to work a deal with your dealer. See if he plans to keep it when you trade it in. If so, see if he will make you a deal on it. If the vehicle is way underwater, then probably easier to let it go and find anew one.
Not without a dealer license. These all go to closed dealer auctions, though if you have a good relationship with the dealer, you’re returning it to, they may be able to buy it from the lender and sell it to you at a better price than residual.
Can they do it?
It’s illegal based on recent discussions on a EQS thread.
I was in the car business for over 20 years, much of it as an executive for a manufacturer, and I’ve never heard of a law preventing a dealer from buying a car from a lender and selling it to a customer, it’s kind of what they do for all used cars.
Granted, I retired from the business in 2015, but unless there is some specific language in their dealer agreement with the finance company, I can’t see how either party would be upset. The lender disposes of the car for market price without auction and transport fees, the dealer gets to mark it up some and collect a doc fee, you get to buy it for closer to retail market price or a bit under.
Talk to your dealer about it, it pays to have a good relationship with them. If it’s something they can’t do, they’ll tell you.
I think something changed since 2015.
I am not an expert and did not try to do it, so just see what others say.
OP should do as suggested, talk to their dealer, they’re the only ones that can confirm if it’s possible or not. It’s definitely not “illegal”, it may not be allowed under the dealer agreement with the lender, but again, we can’t say for sure. It should also be pointed out that this is a Genesis that OP is asking about, and the information from the EQS thread is about a BMW interaction with one salesperson years ago.
It would be great if OP updates later with what the Genesis dealer says about the possible transaction.
We have heard that Nissan Finance recently offered additional $10k off to buy out Ariya leases.
I heard that too, I find it really interesting to see a captive lender offering incentives. My first job out of college was setting up the lease return process for one of the captive finance companies in the early 90s. Even if it made sense, the execs wouldn’t hear of any kind of discount on the buyout. They just lost their shirts at auction later. Their reasoning was that the residual loss had already accounted for as part of the initial incentive cost.
For those of us who don’t have a finance background, does this conceptually mean that losses were already accounted for in the RV from a bookkeeping perspective and that there wasn’t an additional tax advantage to be gained from further discounting at buyout (vs. selling for a loss at auction)?
The manufacturer and the lender are separate entities, even when it’s a captive lender. Money flows from the manufacturer to the captive lender, which, with the manufacturers input, assigns those incentive dollars to a particular vehicle/trim. That $ can be used in various ways…dropping the MF below market rate, raising the residual above expected resale value, or just lease cash. When using an inflated residual, the captive finance company has already received the incentive money from the manufacturer and has covered the expected loss.
I can’t speak to any tax implications, that wasn’t my area of expertise.
Most likely it’s going to a Manheim auction close to where the vehicle was returned, unless the dealer is buying it for their own inventory. Start here and find the closest Manheim lot to you and search for the VIN.
From there, you would need to have or know someone who has a dealer license and/or access to the Manheim auction that your vehicle will be a part of.
Super informative (at least for me). Thanks.
My spouse wants to do this with our Blazer EV.
My brother is the buyer for a dealer that has a Chevrolet franchise, which removes the largest obstacle (willingness). This isn’t the dealer where we got the car.
The plan would be to have my brother watch for the VIN and then buy the car on Manheim online, presumably near us, and his dealership would authorize me as the pick up person on behalf of his dealership.
Of course it’s possible that GMF will ship the car to a market where a higher market price will outweigh the shipping costs, which would make this less convenient for us.
Do you have any idea of how long it typically takes from the time your turn the lease in until it goes to auction?
I get this going back to the 1990s. The logistical costs involved with making these offers combined with lack of executive interest is understandable.
But now, I am not a huge AI guy but this sort of revenue optimization scenario seems like the perfect use case. Have an AI agent review the lease end vehicle inspection, review millions of data points about dealer auctions, seasonality, dealerships off lease purchase history use that information to make determine whether to offer the lessee a discounted buyout rate. If an offer is made it can be done without human interaction. Just send an email a few months before lease maturity and add the option to the online account.
I don’t, sorry. I don’t think that would be predictable given a number of significant variables.
Both time and auction location are going to be unknowns, so you’d have to have at least a couple of fallback plans (one based on time, and the other based on the plan not materializing at all).
If we pursue this, we’d plan to rent something on Turo for a month while we see what happens.
Can you return the lease to your brother’s dealer? Usually, the dealer taking in the lease return has first crack at buying it before the vehicle ships to auction. The price might be higher than the auction price, but should still be less than retail, even accounting for a bit of dealer profit, doc fees, etc.
I remember doing this for a long-term customer on a Tahoe lease when I was GM of a Chevy store back around 2008. The policy and process have likely changed since then, but it’s worth a shot to have your brother’s store reach out to the lender.
Please post how this resolves for you. We have one of the cheap leases on an Equinox EV that ends next year and my wife loves the car and would probably want to keep it we didn’t have to pay the residual price.
The dealership is 800+ miles away, so it wouldn’t be impossible just highly inconvenient.
This is moving well into edge case territory, but for our situation… this dealership used to be in our family. Per the business sale contract, immediate family can buy vehicles “at cost” for life. I’d probably give my brother ~$500 for his trouble.
We also have the option of grounding the current vehicle locally (to us) and having him buy a different one from a GMF event at a Manheim location near us. This is probably the most practical.
I’m going to have him run an auction report for me today to see what the numbers look like on this vehicle, as it may not even make sense.
Happy to post updates, starting with what the auction report shows.
Don’t let yourself fall back into the poofy Lexus trap, get a new lease.