I had effectively the same question a few threads up for a 2020 SQ5. One consideration is to just extend by default with option to buy later. I don’t think there is any “upside” to buying out early if your effective interest rate is anything like mine (Near 0%). You’re getting 6 more months to pay down depreciation of the car at near 0% interest rate. Used car loans are 6%+ right now so you may as well extend the lease even if you know you are still going to buy out the car.
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Make sure the lessor is reducing the rv / buyout on extension payments. We have seen some lessors reducing the rv, while others are choosing not to.
Yea - good call - i did confirm this with VW financial (handling Audi leases) when I looked into it. They confirmed residual / buyout would continue to go down
Us Bank require a cashier’s check which seems risky to send to NY for such a large amount. Is there any other way to pay them?
can you please explain this in more depth? thanks!
I can,
When you extend your lease some lenders reduce the Buyout amount, and some don’t.
Find out what your bank does when you extend the lease.
So if you have a $10,000 buyout and you extend your payment by 6 Months, some lenders will charge you less than $10,000 if you decide to buy it after 6 months and some still charge you $10,000
Here’s my current situation: 2021 M340i with 20k miles, lease agreement was for 36k miles. My lease is over in 3 months with a $35k buyout. MMR is currently showing $42k.
Assuming my trade in offer is above the buyout and remaining payments am I able to trade it in to BMW and get a check for the difference without buying it out and paying $3k in taxes? Also would I be required to buy/lease a new car to get a trade in offer?
No, you can ‘sell it’ to a BMW dealer and get a check. But there might be a delay in the check due to due dilligence.
Most dealers will ‘encourage’ you to trade it in instead, but it can be sold, if they want to buy it.
I have a 2020 CRV leased during the pandemic. Have 18k miles, allowed 36k. Residual value is just about $19k, one payment left so buyout is also about that. Lease is with Honda. Disposition date is 43 days away. Trade-in equity (checked about a month ago) is about $9k ($28k value), private party sale equity is a bit more.
We like the CRV but now we have a second kid and it’s a little tight. Couldn’t carpool with a friend’s kid to camp this summer because we couldn’t fit 3 car seats, and the dog doesn’t fit when we load up for a road trip. Plus I like driving a new car, I don’t want to buy it out and then end up driving it for years just because it’s paid for. We have the cash to pay it off, would probably just do that unless we found a very low rate loan.
Not sure I want to trade up to something as big as a full 3-row SUV but it would be nice to have a little more space. Passport would probably be a good fit, but I really wanted our next car to be electric, or at least plug in hybrid. If Honda had a plug-in hybrid CRV or Passport in the US I would just go back to them and see how much equity I could get them to apply to the next lease, but they don’t.
So what should I do? Go through the hassle of buying it (I believe there will be some costs for taxes and so on that come with it), then reselling it to a private party? Buy it and trade it in on a new lease with another brand? Suck it up and stick with Honda and put another gas-powered car on the road, and lose my equity as more and more people switch to electric over the next 3 years and demand for ICE cars lowers?
And just as importantly, what car should I buy? I want to be able to put 3 car seats across so we can carpool a friend’s kid occasionally, and I want a car with a big enough trunk for a road trip to my in-laws with all the kid crap and still room for our 50 pound dog, and I want a plug-in hybrid or full electric. Oh, and I want my lease payment to be under $400/month after I apply the equity in the current car.
Mazda CX90 PHEV seems the closest approximation to what you’re looking for.
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Sell your Honda back to the Honda dealer and take a check from them (Unless it’s Ally and then you need to walk the wire of death to get it paid out)
Take that check and look at the Mazda CX-90 hybrid or a Jeep Wrangler 4xe or Grand Cherokee 4xe as those have deals right now.
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We almost exclusively drive around the city in short trips, that is the ideal scenario for a plug-in or full electric vehicle. No range anxiety, lots of places to charge. Also, electric vehicle are taking off. Three years from now when I turn in the next lease, my bet is it will be worth more if it is PHEV or full EV than if it is gas only, so I can hopefully get another equity check. And I have kids and want to put less CO2 into the air. Our electric supplier is already 100% solar so if I charge at home (which is 95% of the use case) I am accomplishing that. In a PHEV my wife could drive 3 years and only use gas for her trips to see her parents 100 miles away about 3x a year, so maybe only a couple of trips to the pump a year.
I don’t want a full 3 row SUV because we live in a city and space is at a premium, and because my wife is the primary driver of this car and she doesn’t love driving larger vehicles. Before kids we drove a Toyota Echo. That’s why I said I preferred something the size of the Passport vs the Pilot. Seems like there are a lot of 3 row SUV options and a lot of CRV sized options but not many in between.
I’d love a Rivian but I don’t want or need to pay $80k for this car. That money is better spent on the kids’ college fund. When they finally come out with the ID Buzz or the Canoo, I will consider trading in my diesel sprinter for one of those.
CX90 PHEV others have mentioned is a good option except for the size, but we may go that route. Also looking at the Outlander PHEV for helping with kid carpool but not sure the interior space will help when we need to haul the dog on road trips.
Three years ago this forum helped me lease a 2020 Ford Explorer XLT and now is time to decide whether to buy it or not. Lease will be over in December.
MSRP $46,025
Purchase price $40,641
Residual value $25,813
APR 0.4%
10K miles/36 months
Current miles 20,870
Payoff $27,098
I got an instant offer from KBB for $27,875, Vroom estimate $28,583, and offer for trade in at a dealer for $28,000. I will probably finance half since the interest rates for used cars are terrible at the moment. I am afraid the interest rates will continue to go up and will be much higher in December. Should I buy the car now or trade it in for another vehicle? Thanks for your help.
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Bumping my post for advice.
What are your needs and what makes/models are you interested in?
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Ford leases are weird, IIRC you (nor 3rd party) can’t buy out within 180 days of disposition, so sooner is better. Ford also really wants the originating dealer to process the buyout. You should call FMC and double check the current rules to updating your timing.
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not sure what state you are in, but that would help answer the question 2a) do you owe sales tax on buyout (likely yes) 2b) does your state offer a sales tax credit for trade-ins processed at the same time as new lease/purchase.
I under the impression I do not have a 3rd party buyout option as my Audi Q5 lease approaches it’s end date. So, I’m wondering if it makes sense for me to buy it and then sell it to Carmax? Do I have to title the vehicle before selling it - which would require sales tax? And is there any other option you might recommend? The buyout is $27k which I believe is close to $10k below market value. Any wisdom? Thanks!
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What’s MSRP and year?
Premium, premium plus? Prestige? Miles?
Values of Q5 have dropped significantly , I wouldn’t be so sure to say you can get close to 37k.
“Market value” meaning retail? No one is going to pay that.
Let’s start talking real numbers and actual bids.
I didn’t mean to imply that I thought I could get $37k. Only that if that’s current retail, then there must be some equity in a $27k buyout.