2021 XC90 lease end coming up in 3 months. I like the car, have taken good care of it, and just don’t want to deal with the hassle of buying or leasing a new vehicle right now, so I’d like to buy it out at lease end.
I’ve never done this before; wondering if the experts could chime in on my 2 questions…
Payoff amount on VCFS site is ~44k, residual defined my lease is ~37.5k. My understanding is that the residual is the same as the buyout price at lease end, right? Will the payoff amount on VCFS change to reflect that close to the end of the term?
What happens to my 9k in MSDs? Assuming a check is mailed to me upon lease payoff? Does anyone know if there any way VCFS could just roll this into the payoff?
Thx in advance!
EDIT - never mind question #2 - figured out that the answer is that they can roll the MSDs into payment of the balance.
How did you figure that out? They certainly can roll it into the buyout. However, normally the two are considered separate and distinct transactions. You will likely get a check for the MSD’s. I would call VCFS for some clarity if you haven’t done so already.
Each month, VCFS computes the adjusted lease balance (see your contract). This balance declines throughout the term of the lease and converges on the residual at lease end (much like a balloon loan). Therefore, your buyout at lease end is the residual plus any purchase option fee plus taxes thereon plus any other applicable fees. See the purchase option clause in your lease agreement.
I downloaded the lease payoff form, and it includes an authorization “to apply the security deposit to pay off the account” with an amount that matches the MSDs that were paid.
Thanks for the explanation - makes sense. And yes, I will call VCFS just to be sure.
Taxes were indeed the thing that accounted for the discrepancy between payoff and residual. I forgot about NY sales tax, dammit!
