Hello folks,
I need some advice about my Volvo XC 60 t6 r design SUV lease which is ending soon.
I had leased it in Aug 2019 for 36 month lease $450 monthly incl taxes with 10k miles year. current Odometer is 30,500 miles. The buyout quote is about $34 1/2k. Residual value is $32k in the lease contract. turn in fee is $350. Carvana is offering approx $39k for it. unfortunately, volvo will not extend the lease.
I do need a car. I am thinking if it makes sense to just buyout the current lease and keep driving it is in excellent condition and serves my needs. Or if I should get the newer make or model, currently XC60 are leasing for about $700+. currently there are no additional loyalty discounts and Costco which I made use of last time. ideally, I would like to keep a new payment under $500, also considering other makes/models.
Questions:
Given the supply chain issues, is buying the current car & driving it for next few years a good idea? Or should I get a new vehicle (does not have to be Volvo)? Looking for a financially smart decision.
While the residual is 32K why is the buyout price about 34 1/2 K? will I need to pay any additional NJ sales tax?
how does lease equity work? if I return it am I losing on $? do Volvo dealers compete for lease returns by offering incentives?
Given the total cost Buyout quote + + any other fees, does it still makes sense to buy out the vehicle? Or does it make sense to use the equity to buy a new ride? also considering any future maintenance issues, so far none, just yearly oil changes taken care by volvo.
Hard to say…
Smartest “financial” move? Keep your xc60 and pay it off then drive it into the ground.
Leasing a new Volvo - you might be able to get closer to $500 mo with the xc60 equity and a cheaper Volvo
Volvo leases can only be bought out by a Volvo dealer or the leasee. they do not offer 3rd party buy outs like Carvana. You can buy it out (pay the tax) and sell to Carvana but you end up eating into the equity with sales tax.
I was in a 2019 XC90 T6 R design with about 30k miles. Buy out was around 38k. Traded it into a Volvo dealer, took the equity and bought a new XC60. I didn’t need the three row anymore. The XC60 is better on gas. I ran some calcs keeping the XC90 and financing for 36 months vs using equity and buying new for 72 months (in the end both have a paid off car thats is 6 yrs old). My math (at least to me) was to get a new xc60, use the XC90 equity as a win and drive this new XC60 for a long time.
Certain markets Volvo has 1000-2500 current owner factory rebate for new leases. So that can be a decent deal to lease a new XC60. I don’t think you will hit $450 like your old lease but with your equity that you can roll over to a new lease and the factory incentive you can get a good deal.
Nah, I do. It’s not great and not worth buying out if you have to pay sales tax. But on a low mileage/clean condition trade-in, there is at least some equity. Dealers don’t want pay out any equity, obviously, but some may.
The problem with lease buyouts on things like Volvos is that (A) for short term ownership eating all that TTL is painful, while (B) they are not really good candidates for long term ownership due to below-average reliability and high warranty prices.
I would maximize/find the highest bid. Not just Carvana (see below). Then try to find a Toyota, Hyundai or Kia dealer to match that on a trade-in towards a PHEV like a RAV4, Sorento, SANTA FE, etc. Use the equity towards a down payment on financing and the trade reduces your tax bill on the new car. Reduce your gas consumption and future maintenance costs in one go. Extend the OEM warranty as far as it goes (8 yrs on Toyota and 10 on Hyundai/Kia AFAIK), and own it long term, that’s the most financially responsible thing you can do IMO.
