My Lease Return is now Offered at Another Dealer for less than my Residual

So my 2017 Buick Encore lease was returned last month. I did a search on the VIN and noticed that it was for sale at another Buick dealer asking price ~$900 less than my residual buyout price. The actual transaction price when it sells will likely be $1-2k less than that.

The dealer probably paid $4-5k less than my residual at wholesale. I would have bought it had they reduced the price. And I probably would have even paid somewhat more than they got at wholesale.

  • Go figure

This is probably the case on 90% of lease returns.

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So their business model is to lose more money on every lease. Maybe this makes sense to someone up in the corporate tower. Doesn’t make sense to me.

Same thing is going to happen to my QX60. I would buy it if they offered me the dealer buy price.

The captives are insured against losses at the end of a lease, I believe, so they end up being made whole.


Who would insure such thing? I mean the way I see it is most lease returns are gonna fetch
Less than their buy out prices so wat insurance entity would even wanna play this ? I’m honestly curious

That is not a question I can answer. You should search and read through the posts of @RVguy as I think that will help shed some light on the business and how/why they set the residuals the way they do.

You can insure virtually anything. All you need is money. They tell you if you win the lottery, get ransom and kidnapping insurance. This isn’t any more radical than that.

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Well Damn, if I’ve ever heard a convincing point this is it

Cars that don’t lease well sometimes don’t lease well because residuals are so low. But then they can have residuals below market at lease end so you can recoup the higher payments by selling to places like vroom for profit. I agree that most great lease hacks don’t work that way but there are probably a lot of mainstream leases that do.

If a car goes through a recall during the life of your lease and the car is selling for less due to that + over production, is it possible to negotiate a lower buyout at end of lease? I imagine a call to the FS department cant hurt right?

All depends on the captive. Some will negotiate, others won’t. You’re at their mercy regarding any negotiation and their policies. As you mentioned…call and find out. The worst that can happen is they say No, and you hand them back the keys.

Thank, my mom is definitely going to end up over mileage limit on 2016 MDX but the lease end buyout is already $2-3k more than similar optioned MDX selling for. Come August, I’m sure the difference will be higher.

AHFC is one that doesn’t negotiate.

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Got it, thanks!

Don’t lease to buy, rarely works out in your favor.

This is totally believable, experienced it myself. That said, I do sometimes want to lease to buy. I wish there were some flexibility in buyout pricing.