I have a Ford Explorer with six months left on the lease but am done with it and ready for it to be out of my garage. My residual is $26,484 and my monthly payments are $515 making my buyout just under $30k with fees. I have offers from third-party buyers (Carmax, Autonation, etc.) essentially equal to that, but Ford is refusing to allow the third-party purchase (from searching the forum and reading other threads, apparently this isn’t an uncommon scenario).
I’m thinking about just buying the car and then selling it to one of the third party purchasers. Unless I’m missing something, the downside is I’ll have to pay the sales tax (whereas the third party purchaser wouldn’t have to), meaning I’m paying approximately $32k when my offers are $2-3k less than that. But I’ll also be saving $2-3k in monthly payments, so it seems like it’s more or less a wash and I’m that much closer to free space in my garage. The only downside risk I see is the third-party offers going down in between now and when I get the title in 4-6 weeks, but I can’t imagine they’ll go down that much. And that risk would seem to be mitigated if it’s possible to recover the sales tax because I’m immediately reselling the car. Does anyone know if that can be done in Illinois? Looks like it can in some other states (California) but I haven’t found answers for Illinois.
Would appreciate any thoughts, feedback, advice on the above scenario. Thank you in advance!
FMCC directed me to the original leasing dealer. I asked them if they wanted to buy it back and they effectively told me “why would I want to? I’ll get it back in six months for free.”
The “wash” in my mind is because I’m not using the car. I can pay $3k over the next three months for it to hold the garage floor down, or I can pay $3k now to have that space open. Depending on the third-party offers maybe I come out a little bit ahead or a little bit behind, but it’s thin either way hence my calling it a wash. Unless I’m doing the math wrong?
You’re outta luck on recovering the sales tax. If you want to buy it out and resell it, you get to pay the sales tax, so factor it into your buy out costs.
Why don’t you just pay the 3k in remaining payments and return the car now if you want an empty garage? With that sales tax you’re probably only paying a few extra hundred $ and saving yourself the hassle of buying the car, waiting for title, and then selling the car.
I think that is exactly @Caleb_Hani 's question. Calculate the difference between returnin the car now by paying the remaining payments VS buying it out and selling it to a third party.
I personally don’t think it’s such a big hassle if the difference is more than a few hundred dollars.
Thanks @Cladbolg and @YoloYoda for the perspectives. Cladbolg, you may be right. When I started the journey I was looking at washing my hands of it and saving six months of payments. Then Ford said they wouldn’t play (huh? that can’t be right) and I start researching here only to discover it can happen and its common. Then I figure I can still get the savings I’ll just need to cut the check myself and wait on the title, but wait – don’t forget the sales tax. Now I’m four or five steps down the road and it looks like I can’t get around Ford and I can’t get around sales tax, so I’m basically looking at six months of payments for a car I don’t use or buying it out and maybe coming out a few hundred ahead. Maybe I just need to chalk it up as a lesson learned about leasing from Ford.
If you decide to keep it, any amount of use and mileage kept off your other cars is a benefit.
I don’t fault banks for not selling assets below FMV (they have a fiduciary duty to do so), but FMCC’s stance of refusing to sell period would be a good reason to avoid them in the future.
