I’m just over one year into a four year lease on a 2024 Lincoln Nautilus. I love the car, but my wife absolutely hates it. I know there’s going to be fairly steep negative equity between what the car is worth versus what the lease buyout price is. I plan on paying the difference in cash rather than getting trapped in a vicious cycle of rolling negative equity into the next car. I’m not interested in selling the lease to someone else. Anyway, my question is on how to get out early. The originating dealer is part of a large auto group with several other auto makers besides Ford/Lincoln. I’m not interested in another Ford or Lincoln. Will I have any trouble with Ford Credit if I go to one of their other auto makers in the group besides the Lincoln dealer? I know Ford is very restrictive on 3rd party buyouts, but I’m hoping that since the originating dealer is part of the group I can work around it.
You can transfer the lease to another person
If you really don’t want to transfer the lease to someone else (the best way to save the most money), I would look to see which of these options loses you less money:
- Buyout the lease at the buyout price (your leasing company can tell you this)
- Payoff the lease and return it (basically just paying the rest of the payments right now; the leasing company can tell you the payoff amount, too)
I don’t know as much about Nautilus depreciation, but I’d assume it’s steep as with any other new car. As such, I’d expect option #2 to be cheaper. It’s definitely worth checking both, though.
I was also exploring these options if I’m unable to transfer my Mach E (thankfully I’ve a good amount of interest after throwing cash incentives at the problem and am in process of getting it transferred).
The originating dealer can give you a complete quote + taxes for the buyout option. This requires a lot of available cash to execute, though. But it might be the smallest loss overall after you re-sell it.
If you choose to early terminate the lease, if your lease contract is similar to mine you actually have two options for early termination, one of which may be much less of a loss than the other depending on the numbers involved.
First option is what would be cheaper in my case, and likely in yours as well. It’s also apparently pretty uncommon though, because the dealership finance person I was talking to about this wasn’t really sure how this worked either until I talked it over with him to confirm how I understood it:
You return the vehicle early and terminate the lease, and you pay the difference between the Unpaid Adjusted Capitalized Cost and the Current Wholesale Market Value of the car. The complication here is that both of those numbers are moving targets depending on when you execute this option. The Unpaid Adjusted Capitalized Cost starts as stated in your lease contract and then reduces on an actuarial basis as you make payments. You’ll need to get this number from Ford Credit/through the dealer to know what it is exactly, but it should be roughly similar to your current buyout quote that you can get from the phone robot. The Current Wholesale Market Value will also be set by the dealer, though you have some contractual options to seek a third party appraisal here if you think they’re screwing you badly on a number.
Second option is as sincladk mentioned, you pay all remaining lease payments and turn the car in. Given a very early termination, this is likely to be a lot more expensive than the first option.
In my particular case, the second option would likely be more than 50% more expensive than the first option.