I just leased a Volvo C40 with a large downpayment that puts me in a position where most of the monthly lease payments go toward the rental fee. I just got the first payment in the mail and the current payoff already matches nearly the residual that it is supposed to show after two years of lease payments. So I am thinking why not just pay it off now and skip two years of costly lease payments?
But Volvo restricts the buyout to personal checks and money orders, and cashiers checks (which are sent by the bank as payor on behalf of a customer in the memo line). But Volvo does not allow payment from any 3rd parties. Does this mean I can’t use my own lender to finance my own purchase of the vehicle, and send them a check as lien holder financing my purchase?
Thanks for your input.
As the first party, you are the only one who can buy you lease early without trading on another Volvo or terminating. Whether you send a personal check, cashier’s check, or funding from another lender naming you as the new owner (with them as a lienholder).
Always do the math, but I suspect the rate you lock-in now will be better than your current MF. And sorry to say, there was no lease incentive for the EV tax credit, and buying it out does not make you eligible to claim that.
What’s it worth? Any chance of buying it out, selling for close to MSRP, and buying yourself another new one so you can claim the credit this time?
BTW, if you use Lightstream, they’ll put the money in your account so the payment comes from you and the title comes to you in your name. No lienholder.
You can bring your own financing by doing the buyout through your dealer. Just don’t tell Volvo - they don’t want their dealers do customer financing on lease buyouts
And you can use your own lender directly with Volvo.
Thanks for the replies. Volvo actually was running a $7500 lease credit deal to mimic the $7500 EV tax credit, which was why I went for the lease. About $3500 of that got recaptured by taxes and title, doc, delivery, lease acquisition fees over MSRP. They charge destination fee and acquisition fee around $1K each. The payment was much lower to lease for 24 months than for longer. But the Money Factor is .0035 or something, which is crazy but irrelevant if I turn the transaction into a purchase reasonably quickly, since that number determines the rent, which you don’t pay at all if you buy out the lease. I put $10K down, and wound up with a $60K MSRP car with a $45K buyout price for a 2022 Ultimate C40 at the first payment. I think it might look bad for a lease but for an EV purchase in this market it looks pretty good, especially since I would not have been able to take advantage of the $7500 tax credit because I don’t pay taxes.
Thanks for the replies. I am relieved to know that a personal check includes lender financing checks, or that if it doesn’t at least Lightstream and other lenders will let you deposit funds and then issue your own check to fund the purchase. And that I can also deal with some dealers. So I see I have options. Was a little worried. I would be just throwing money out the window with any lease payments because they could be paying down the principal instead. The residual was I think $38K but it varied up to $42K in different scenarios we ran, I would have to go look again. It is not much less than the present buyout price of $45K. Most the 24 lease payments go to rent.
Thanks. There is a poster above talking about using a Volvo dealer to buy out the lease. Or to process a third party payment, maybe a lender payment? But not sure how that would work. I did read another thread about Carmax buying out Volvo leases but I think they probably don’t anymore.
You can, and in some states it may be required. I’m in CA and have an XC60 lease, volvo just confirmed this week I can send payment directly.
That and acceptable forms of payment are listed on the “payoff request” in your VCFS online account. They also now allow MSDs to be applied directly to your payoff, which was not the case for me in the past.
I don’t know what MSDs are, sorry! But yes, I saw acceptable forms of payment and that is my question. Does that include cashier checks from your lender to purchase the vehicle on your behalf, or only cashier checks from the very same bank on your behalf that do not include a lien on the car. Can you finance the car while buying it out or is it personal purchase money checks only? That was my question, in short. Thank you.
What does the payoff form say? (And I already answered above)
Aside: VCFS will answer these questions and more within a business day by sending a secure message in your VCFS account. In the last month they answered my questions about payoff timing, taxes, and whether Polestar orders counted toward a lease extension (no). You didn’t specify your state in the post so I can only answer for California / this month, but they are the authority for all of these questions.
Please stop playing games with me, I don’t find you to be helpful while your answers make assumptions that are incorrect. I did in fact get a $7500 credit. I read my contract terms and I find them vague. That is why I am asking the forum if they have any experience with how this has actually been interpreted in practice. I am a financial services attorney, so I do not need your coaching to read the contract. I think others answered already in any event. Thank you, OTHERS. I also have read your answer to another member asking about discounts on an XC90, and the same holds true, you tell them there are no discounts when you should at least tell them to look at the corporate website versions of their local dealer pages, that is where I found my $7500 discount. Which you are unaware exists. But you answer as if you have all of the answers and you are also rude and know it all about it.
I do not trust what VCFS says so much as what they do in practice. What one operator says is not one another will do, in practice. If they have a consistent practice, however, that is a better measure to go by. Thanks so much. The state is largely irrelevant for this issue of buying out the lease when the contract terminology is uniform.
As we’ve seen with other captives, that’s not true (Florida for instance has a state law that many have struggled with), but now I’m being argumentative.
I’ve always received consistent answer from VCFS, but that’s my experience. Ford, VW, Subaru/Mazda (Chase), not always the case.
You need to look at the math. Rent charge is basically an interest. If you buy and finance you will still pay interest. You need to compare the interest rate to your current rent charge before deciding.
Oh I signed in with Google and accidentally signed in with a different google so I guess, yes it created a new account. But i just signed it back out again. It doesn’t really warn you that you are creating another account. Or it didn’t that time anyway.
