Renegotiate residual after extension

I have a Jaguar F-Type lease that expires early April. Living in the northeast, I feel like a bit of a fool giving the car back after essentially storing it all winter. Thinking about extending it 6 months so that I can enjoy it all spring, summer and fall. Ultimately, I plan to just buy one pre-owner (not dead set on the actual car I am leasing). My payments are 448/month with 12k miles. So, extending for 6 months will cost me $2700 but shift my purchase from spring to fall. I figure the seasonal discount for fall and further depreciation on cars will make this a financial win.

With that out of the way, the current residual at lease end in April is around $45k. The car is a 2017 base (true base) manual convertible with about 30k miles. Comparable cars seem to go in the $35k range. I know the residual at lease end is pretty much set in stone, but how does it work with extensions? Is there room to negotiate? Is it prorated? The color combo isn’t my favorite, but I am interested in keeping because I know it’s history and !manual! Thanks in advance for the thoughts.

If this is true:

And this is true:

Why on earth start at $10k higher than the going rate to try to work a deal? Isn’t that a big chasm? How would you find that much in negotiations? We’re talking a delta approaching 30%.

Good luck!

:bat:

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It’s a manual ftype that I know the history of and has a good clutch. Many of these cars have clutch problems and finding a manual to begin with is always a challenge. Not saying I will be successful, just curious if it is even worth trying.

@ethanrs should be able to provide an answer.

If you could lease another one for the same payment, doesn’t make much sense to buy one

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Yes, I can!

With payments that low on the F-Type I would definitely recommend extending for the full six months. Mileage is prorated.

Residual is and isn’t set in stone. Ask your grounding dealer what the market based value is when you go to ground (or PM me, I can tell you what it is if they refuse). They get the opportunity to buy the vehicle for much lower than the residual value and sometimes even lower than wholesale value. I would usually take that “market based” number and add $1,000 for a customer so we both gain from it. I think the last F-Type I did was $4,000 less than MMR (wholesale value) and we did a full certification on the car and sold it right back to the customer.

Lmk if you have any other questions about the process.

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Sounds like JLR’s process is similar to BMWs. Do they want you, as the grounding dealership, to buy the car back vs sending to auction? From what I understand, the BMW grounding dealership is only allowed to send back a certain number of cars/year, and are expected to buy them when the customer grounds it.

Awesome! Thanks so much. That is exactly what I needed! Looks like I will get to enjoy it all summer and then go from there. Happy holidays.

You can’t lease even the 4 cylinder for that now. And manual transmission is no longer made. Slap a tune on the car (post lease) and some better wheels and it will be all I ever need for the next decade!

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Almost the same, but we aren’t forced to buy anything. Hypothetically we can send any car to auction you would just miss RPI.

RPI is a JLR program which is essentially a repurchasing incentive that fluctuates depending on the wholesale market. Dealers qualify when they buy more than 50% of grounded vehicles at their dealership. When values go down at auction, which is usually seasonal, we get a larger incentive to buy inventory. Currently, if you purchase more than 50% of lease returns grounded at your dealership you get $600 per car (and you are generally offered a price much lower than wholesale value). Doesn’t sound like a lot, but I made over $30,000 for the dealership in September off purchasing cars. Sure as hell beats overpaying for cars at Manheim competing against non franchised dealers and paying $500-900 per car in buy fees.

BMW used car managers hate their jobs. I’d literally rather be a salesperson than a BMW UCM. The used car manager I know averaged -2,500 per car because BMW forces dealers to buy a certain percentage of cars for way over wholesale value. If I remember correctly they are forced to buy 75% of lease returns, and they have to pay 10% of the loss BMWFS takes at auction on the cars they don’t purchase.

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Yeah, I just had a convo with a sales manager not too long ago, and if this wasn’t the number, it wasn’t far off.

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Interesting, so sounds like the seasonal adjustment factor may work in my favor this fall. Is there an ideal month to turn in an ftype convertible? I typically drive it through the end of November then garage it.

It won’t make a difference for you, generally the dealer gets paid in a range of $300-$600 per car and varies depending on model. This month is actually the first month that it is $600 on everything.

They are still forcing dealers to buy lease returns? I guess that explains how they inflate residuals, making the dealers “help”. They were doing that crap when I was in the business 15 years ago, crazy stuff.

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Thanks again!