When you extend the payoff amount just decreases from the residual value. It keeps going down as you make payments. Not all of it though as some of your payment is the rent charge (interest). But if you keep checking your payoff it continues to fall.
So how does a lease really work? If I negotiated a deal of $24,000. This includes tags, tax and dealer fees, then turned around and said I want to lease for 36 months with no money down. They came at me with a residual value of $12640. And the money factor at .013. What would the payment be
Calculate a full lease breakdown before walking in. Make the offer to various dealers with cars that fit your spec via phone or email. If you are able to get the deal, submit credit app & docs remotely. Go in store only to pick up. That’s the correct way.
A few hours of learning about leases will save you thousands of dollars and hours of your time. If you have any questions from the articles feel free to ask for help, that’s what the community is here for.
For what it’s worth, I have been auto-renewing my overdue General Motors lease on a month-by-month basis. The e-mail I get every month states that mileage limits and residual value do not change by extending the lease.
From the E-mail …
The extension does not increase the mileage in your original contract. Any mileage incurred that is in excess of the amount allowed during your original lease contract term will be billed at the rate per mile listed in your Agreement. However, if you lease or purchase a new GM vehicle at lease end, you may be eligible to receive an additional monthly mileage allowance equivalent to the terms of the original lease agreement should you exceed your contract mileage. If you do not finance your new GM vehicle with GM Financial, you will need to call or message us to request a mileage waiver once you receive the End of Lease Liability Invoice. Please have your new VIN available.
You are responsible for the extension of insurance coverage or extension of any ancillary products, if any, and assume full responsibility for extending such insurance coverage or ancillary coverage after the expiration date stated in the insurance or ancillary policy or certificate. Extending your lease does not change the residual value of your vehicle