Sorry if this is basic knowledge, I just want to confirm before I help my daughter out with this.
She is 28 mos into a 36 mos lease (21 VW Tiguan SEL) at which I think is a fairly hefty monthly payment of almost $400 (w PA sales tax). Her current buyout is $23600. From all the data I can gather, the wholesale # on her car is ~$2k more. Please confirm that she has built some equity (thanks to crazy market conditions)? If she would choose to get out of the lease and car now, and buy something used, she could (should?) work this car into any deal as a trade? I realize much of it depends on condition of the car (which is nice) just as any other trade. I also figure it’s wise to move now with the market as it is and why not make these final 8 payments to herself.
As an aside, I’ve explained that maybe her best move is to just buy the car at the buyout for herself, she knows and likes the car, but she feels she needs something larger this time around. Thanks to all.
Its a vw, so any 3rd party dealer eill have a higher buyout. You could buy it yourself and sell to whomever youd like, but the sales tax on the buyout eill probably kill it. You might be able to get a vw dealer to buy it, but theyre probablynnot going to give you wholesale.
You can find out trade in value by plugging your info into any of the sites that purchase vehicles, for example, carmax. When you buy out you’ll have to pay sales tax. I’m not sure on vw third party buyout rules.
She’s focused on a used VW Atlas, likely at a VW dealer. I figure they’d love for her to just come in and sign-away her Tiguan as-is but if she has an equity to deal with, I want her to stand as firm as she can in her knowledge of the situation.
Get as many actual buyout quotes as you can so you have a real basis of estimate. There will be some buyout fees that will eat into the equity, so i wouldnt expect much.
Go with her (if you can) and beat the dealer down as far as you can on the used Atlas. Don’t mention the Tiguan is a trade in/lease return. See if they will give you some additional money off the Atlas as well if you use their financing depending on the rate. You can always then flip the financing if they will give you some of their money from the bank.
When all of that is locked up on the Atlas, then tell them you want high Blue Book for the Tiguan and be prepared for the laughter as it is coming off lease. See how close their number eventually comes to the Carmax number, a KBB buy, etc. and go from there. As close as the Carmax number is on the buyout, the extra $1k or so to deal with the 3rd party buyout may not be worth it if the dealer comes through on the Atlas and price for the Tiguan.
Kids have since entered the picture, and all the things that come with them. She’s looking for a step up in size and likes her VW so the Atlas is a choice. She knows she will likely get a better vehicle going with Toyota, Kia, Honda, etc, and is definitely considering all options. She’s had two leases and feels like buying a lightly used car and keeping it for awhile is the way she wants to go this time.
If I were in her shoes, I would look into buying a new Toyota or Honda once her lease is up. The market might have improved by then and interest rates might also be better.
People feel like making bad decisions all the time.
What was once a very viable strategy no longer is one. Having cherry picked between lightly used and new leases myself, you have to go towards where the value is. Where the TCO is lowest.
Mainstream German cars used to trade between 45-60% of MSRP after 3-4 years. Is that the situation now? No. You’re going to be paying a huge premium over what the normal valuation would have been. And you’re going to regret it because in another 3-4 years that same car is going to be worth ~25-30%.
So that used Atlas with fewer features and fewer safety aids is going to cost you more than a brand new leased Pathfinder or financed Highlander.
That being said I’m going to be very blunt with you. We’ve had many threads where some family member inserted themselves into a child’s/parent’s/nephew’s/baby-daddy’s/sibling’s car buying decision, and the actual buyer couldn’t care less what advice was offered. Is that the case here?
Do the kids require her to get a bigger car right now? If she’s got a couple of months until she really needs the car, I would wait, for all the reasons everyone else has mentioned.
