Dealer Buyout on Mazda Lease

Ask the Hackrs
,
1

I just started my final 12 of a 36 mo lease on a CX-9 Touring. Since it’s a Mazda, my lease is through Chase. I’m curious about what a dealer buyout entails if I trade. I’m considering a trade for multiple reasons:

  1. Since COVID quarantines started, my family can go to one car for at least the next six months. I accepted a VROOM offer on my Civic Hatchback, and now we’re looking at what our options are for trading our lease for something else.

  2. I’ve realized over the past two years that a lease just isn’t the best option for my family. It’d be perfect for me individually, but having two young kids means I am constantly stressed about the condition of the vehicle and cringe every time a stain/tear/scratch happens.

  3. The best offer I’ve gotten from a dealership is $26k for a trade. Individual buyout is $29.7k and dealer buyout is $27.7k. I knew going into this consideration that I’d be upside down a bit, so my goal is to minimize that as much as possible. With the $26k trade offer, that saves over $2.2k in sales tax for my purchase, so it essentially negates the negative equity ($1.7k) and I don’t have to worry about any other charges at the end of my lease.

So my question is regarding the dealer buyout. From my understanding, the buyout is less because the dealer saves sales tax. Understanding the -$1.7k equity from trade value to dealer buyout, am I correct in thinking that this negative equity is my final and last obligation from the lease? If I trade to the dealer and they buyout at Chase’s quote, am I clear from the lease contract, or will I be hit with any unforeseen charges or expected to continue to pay my $399/mo until contract end?

My impression is that if the dealer buys out the lease through my trade, then I’m all clear other than managing the negative equity (which is essentially mitigated by the tax savings of my new purchase). Please correct me if I’m wrong.

2

You are correct.

When you trade the car in, the dealer will pay off the car with Chase, and that will end the lease contract you had with them. The dealer will own the car at that point. There are no other fees, charges, or anything else you have to worry about (and you certainly don’t have to continue to pay your $399 monthly payment).

3 Likes
3

nope, no other charges. no worries!

1 Like
4

Have you gotten quotes from carvana and vroom?

1 Like
5

Yes. $25.5k was the best online quote I had, so I’ve gotten one dealer to beat it by $500. And since I’m trading to a dealer, it also saves over $2k in sales tax for my replacement.

I did, however, accept a $17k Vroom offer on my Civic and am waiting for the paperwork on that. It’s my first experience using a service like that.

6

Ok, correction for anyone that stumbles across this post. I’m being told from a dealership now that the trade value of the lease (through dealer buyout) does not mitigate the sales tax on a new purchase. Since the leasee doesn’t pay sales tax for the full purchase price on the front end, you don’t get the tax value benefit on the back end. So even though the dealer will give me 26k value for my leased trade (which has a dealer buyout of 27.7k), the sales tax for my new purchase isn’t lessened by the trade value of the lease like it would be if I owned the car. I guess this makes sense to me.

Can anyone confirm or deny this?

1 Like