Hey folks have a question about lease end buyout. I leased a Wrangler at the end of last year. Got all the rebates and discounts, etc. Residual at the time was 71% so it kept my payments low. About a month after, I requested a buyout quote from CCAP. They sent it and it was inline with what I expected after only 1 payment. Doing the math on the remaining payments, the lease buyout should be around 28k. However, my residual on my contract shows $39,xxx. When it comes time at the end of the lease, what will my actual buyout be? Ive requested another buyout statement to see where i sit today and waiting on that to come back.
The buyout at the end of the lease is going to be the residual value plus any taxes and fees needed to register the vehicle in your name. You don’t get to deduct your lease payments from the residual in the contract. You can add the total of all the payments to the residual to figure out how much you will spend to buy out the vehicle at the end of the lease. By the time you do that you will realize if makes no sense to plan to buy a Wrnagler at the end of the lease.
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The buyout doesn’t decrease each month by a full monthly payment. It only decreases by the depreciation portion of each payment.
Your buyout at the end is the residual on your contract plus applicable fees and taxes.
Your buyout at any point during the lease is the adjusted lease balance plus applicable fees and taxes, where the adjusted lease balance is equal to the adjusted capitalized cost less any depreciation payments made to date. If at lease end, you take the adjusted capitalized cost and subtract the sum of all the depreciation portions of the payments made in the entire lease, you would get the residual value.
There you go.
And forget about buying it at the end of the lease.
Noted
Next question. The payoff i got in January showed 46k. Make sense to buy it out now? All feelings aside for PHEV of course. I have 7.5 yrs left on warranty for the battery so not too worried about that if i get a 5 yr purchase.
do you have enough cash in hand or a super low 1% loan?
Unfortunately i do not
Wait for the interest to go down if you plan to do a buyout. What was your MF / Interest on the original loan?
Yeah, was thinking of waiting but trying to guess the fed you know how that goes. MF was around 7.5 or so. It was bad timing since my previous lease was due. Holding out isnt a problem just dont want to get too upside down and keep making payments at the same time.
It’s the same issue as buying at the end: you’d be left holding the bag on depreciation.
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