How does the dealer negotiate price to keep a lease turn-in on their lot?

When a customer returns a lease return, and the dealer wants the car for their inventory, not to send to auction, how exactly does it work for the dealer to get the car? I would like to become educated on this aspect of the process. Do most leasing companies offer the dealer a lower buyout price than the consumer, and the dealer takes that price? Does the dealer have a way to negotiate that price?

I have a Chrysler Capital lease. I love the car, but the buyout is going to be double the car’s market value, which means leasing was absolutely the right choice for that vehicle, and paying the buyout value does not make any sense. But I want to keep the car. Can the dealer I turn the car into negotiate a buyout price with Chrysler Capital that is closer to what the cars are going for at the Manheim auctions, and then sell it back to me after it hits the lot? Probably discouraged, but is it possible, has anyone done it?

I was told dealerships can purchase off lease cars at a discount but not great discounts. for example, my wife turned in her 2018 Equinox at local dealership, the GM wanted to purchase the car because it was in impeccable condition. However after he looked at residual, he responded too expensive and would not make any money on the sale.
You mentioned Manheim auction. My buddy crashed his ATS and insurance would not sell it back to him after they wrote it off. They suggested my buddy go online and bid for his car when it was up for auction. Since he is not a broker he could only watch the auction and not bid. So I got one broker that I know to bid on the caddy. My friend though the salvaged caddy would sell around $3.5K and he would add another $5K in parts. But instead the car sold at auction for over $9K.
My son 2017 VW Jetta residual was $12.5K and he was considering purchase because it had less than 9K miles. Then he changed mind and got a new Jetta Rline. After the auction he received a letter from VW stating the car was sold for $13885.00 at auction.
In the early 2000’s one could get a great deal at Manheim but today it’s not the case.

Here’s an example of Toyota. You will see a lot of them are similar to residual. But there are some that are over residual depending on market


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Why would VW send your son a letter telling him what the car sold for at auction?

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Because if it sells for more than what the residual was he will get a check. Happens to me once.

It depends on the brand and the dealer’s willingness to do so. For BMW, dealers can buy it at a discounted price but they can’t sell it back to the original owner. If they do, the dealer is charged the difference between what they paid and the residual value.

My suggestion would to call Chrysler Capital and see if they will negotiate the buyout knowing they will take a hit at auction.

So did your son get a check back for $1385?

“Because if it sells for more than what the residual was he will get a check. Happens to me once.”

Say what?

I returned my lease. A month or so later I got a check and a letter saying it sold at auction for X and I got the difference. Mazda through Chase

So Toyota wants you to buy the car above market value for some of them? (Obviously you can pass, I would have guessed their price would be below market or at market).

It’s all over the board for sure. We buy them at the market price not necessarily residual. Dealer has 48 hrs exclusive and then they put it out to the dealer network. If all dealers pass it goes to the auction.

Mirai residual is $37k and they offer them to us at 11k

GMs process is fairly similar to this as well.

You can potentially make quite a killing on a mirai… if you find someone to but it I guess haha.

Depends. They are selling pretty cheap on used market. Free fuel and 1.9% for 72 on preowned so it’s a good deal.

I don’t personally sell preowned.

Negative. When I spoke to the second VW Finance rep and asked for confirmation of check. She laughed and though I made it up. I then asked when my son turned in lease that they should of terminated the contract and account from the website. She too was puzzled why the account was still open until post auction. I was a bit mad with VW because they tried to charge my son for missing manual and flat tire. Luckly, the dealership had the manual on a salesman’s desk and also reported the Jetta did not have a flat but just needed air in the tire. When I ended my second E-class lease and turned in with 4K miles under, I did get a check for a few hundred dollars a few weeks later. Which did cover the turn in processing fee.

I think that particular clause is only inserted into the lease contracts of a few states.

Anyway, the chances of having equity at the end of a good (or better) lease deal are really remote, so I wouldn’t lose sleep over it.