Determine Volvo Lease-End Options

Ask the Hackrs
1

I previously shared my story here for anyone interested in the background. Lost my job, wife diagnosed with a brain tumor, etc. Long story short, Volvo wouldn’t do anything for me. So I kept it.

Well, it’s about time to decide what I’ll do with it

I lease a 2023 Volvo XC90. I have 9 remaining months left on the lease, however, I don’t think turning the car in at lease end is an option.

I have 57,000 miles on it ($0.25 per mile fee over 30,050 miles), so the mileage overage charge would be large. Volvo will not allow a 3rd party buyout, so in order to trade it in or sell it, I will likely have to purchase it myself first, right?

The current buyout price is $44,558. Taxes in CO would be $3,586 on that purchase price. I also have a $7,500 MSD.

Volvo quoted me $10,000 to turn the car in early.

NADA Book value on trade in is $36,375 - $38,375. I would also save money on taxes if I trade it in vs selling outright. KBB private party value is $38,569. NADA Dealer Price is $44,443.

What is the cheapest way out of this vehicle? Considering all options, including buying it outright now, waiting til lease turn in, trading it in after purchasing it and hoping for a great trade in offer, selling private party, etc.

Is there any other ideas I’m missing? I realize I made my bed, now I’m laying in it - just trying to move on from this nightmare without destroying my family financially.

2

Pls do not buy it in the hope that a dealer or PP will make it worth your while. You may be digging a bigger hole.

Get some bids from carvana, driveway, etc. Click on “I own it” and not financed/leased just to keep it simple at this point.

Don’t be surprised if the ~$6500 in mileage fees is the least worst option for you.

Hopefully your wife’s health and your job situation work out in the meantime

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3

Sorry man. So approx 6700ish in mile overage as of now, or 10k to turn it in now. But by the time your lease is up, assuming you keep driving it, you may owe just about the same in overage. If that’s the case, it ends up the same. So seems like the cheapest option would just be to ride it out, hand the keys back and see if they can accommodate some sort of payment plan for the excess miles at the end. Or use the MSDs that you get back to pay off most of the excess mileage? Either way, I don’t think buying it out is a good idea. Hope all goes well with you and your family.

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Big picture this is right. I’d imagine the problem is OP doesn’t have $6,500 available and you can’t finance the $6,500 fee.

It’s all bad options but $6,500 on a credit card is a big risk without a strategy to pay it off.

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Appreciate it. Truly, I am just thankful we are in a better place than we were before. Wife is doing great, and we’re getting back on our feet.

The problem becomes, we are still a single car household - so 9+ more months of driving puts us in a deeper mileage hole.

I have ran through Carvana and a few others - numbers were pretty brutal. $32,000 on the high end.

Hell, I even thought about trying to do a ‘pull through’ lease of another Volvo just to get out from under this mileage issue but the depreciation is so bad on these I’m not sure that’s a great idea, either.

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6

Thank you, I appreciate that. She’s doing so well, so I’m thankful. The car got us back and forth to Mayo Clinic many times so I am thankful for that as well.

$10,000 is such a hard pill to swallow. While the MSD certainly helps, it’s still money that just feels sunk. Was just hoping there was some idea I hadn’t thought of to try and get creative. Beyond just rolling negative equity into a new loan and kicking the can further down the road

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The thought really becomes - in 9 more months I’ll have probably ~18K more miles on it, using the same math for the previous 27 months. Hopefully less, but have to use estimates.

Then I’m looking at ~11K in mileage fees, plus the remaining 6K in monthly payments I’ll have into it. That to me seems like the worst option, right?

8

If this XC90 has been problem-free and trade assistance is not an option, I would:

  • go back to Volvo and ask if you exercise the termination and pay $10k (MSD + $2500) will they waive any mileage overage as a goodwill gesture?
  • be ready in 3 months to exercise the pull-ahead and lease the least expensive Volvo that accommodates your 1-car family and its budget. Use a broker here to facilitate it, make 3 more payments, eject. If today was 90 days from now I’d recommend an S90 from @Benedetto - maybe Costco Volvo will be back then??
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9

Recently, I buyout my 2024 XC 90 T8 lease after one year of the lease and sold to the local dealer. My buyout was $61k and I sold the car for $60k. I lost $1000. Not bad.

10

@Benedetto posted a super cheap S90 deal today. Could always do the math of making 3 payments now to get within pull ahead territory, and pull the trigger now if any leases come up now.

Edit: disregard, didn’t realize still on the hook for excess mileage, which would make sense .

11

My understanding is that there is no mileage overage charge if I terminate the lease now - they take into account the current mileage when determining their wholesale price and factor that into the 10K amount.

Option 2 could work. That would require 3 payments on the new lease before then buying out and selling? Or terminating early?

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Crazy what 15 additional months does to the resale on these…

13

This may be a silly question (or perhaps none of our business), but what is the goal in getting rid of the Volvo (esp since you mention that you’re a single-car family)? Is that the payments are too high and you want to get a car that costs less? Or something else?

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  • Offer available to current VCFS lessees.
  • Current Sign-pay, Flexible, Care by Volvo subscription lessees are not eligible for the VCFS Lease Pull Ahead Program.
  • Lessee must lease or finance a new MY24 BEV, MY25, or MY25.5 Volvo through VCFS.
  • A new vehicle lease or purchase must be in the name of the original lessee or co-lessee or both.
  • Customer and retailer are responsible for varifying eligible payments by logging your VCFS account online.
  • Customer is responsible for excess wear & use, excess mileage, and any other obligations such as property tax, if applicable.
  • VCFS will waive up to six (6) remaining monthly payments and the vehicle turn-in fee when customer simultaneously leases, or finances a new vehicle through VCFS. Please refer to original customer signed lease agreement for vehicle turn-in fee amount.
  • Any customer payments received before or after the lease pull ahead grounding date in connection with a payment due date on or after the lease pull ahead grounding date will be refunded to the customer.
  • Customer contractual monthly payments due before the lease pull ahead grounding date are not eligible for the VCFS Lease Pull Ahead Program and are the customer’s responsibility.
  • New VCFS Lease Pull Ahead transaction (replacement vehicle) and grounding of existing vehicle must simultaneously take place at the same retailer on the same day. The retailer must physically have the vehicle in their possession to ground within Volvo360.

*Please see the latest official VCFS bulletin or the Program Guidelines for the complete list of terms, conditions and restrictions.

15

You’re coming out of a fire-sale in Q4/24 in the last of this body style and a mid-cycle refresh fueled by tax credits that are expiring. Of course the depreciation is awful, and unfortunately Volvo is one of the most difficult captives to exit a lease early.

If you are trying to save on your payment and are considering MSDs + $2500 to get out 9 months early, thats $305/mo in new money or $1111/mo total to eject 9 months early. A lower payment is kind of an illusion if you need this or a replacement for transportation.

16

Yes, in an ideal world I’d get into a more economical car (lower payment) for the next year or two until we are in a better financial situation. I understand it could be a pipe dream, but that’s best case scenario.

17

Thank you. Looks like the bullet right before the bolded portion states I’m responsible for the mileage overage in that scenario. Unless there’s a way around it through the dealer?

18

Finish the lease, pay for mileage with MSDs (it’s kinda not “out of pocket”) + whatever is on top of $7,500. Or do pull ahead in 3 months into the cheapest Volvo, as others said.

19

Makes complete sense. I was more just surprised but all valid points. I realize this isn’t anyone’s fault but my own. Just trying to do what’s best now that I’m in the situation.

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20

Thank you. Any data points or experience with the pull ahead and whether I’m on the hook for mileage overage?