First off - thank you for reading this and providing your advice.
I got into a 3 year lease in a 2014 Ford Focus SE. The lease is up in August 2017 and I know for a fact that I will over the allowable mileage limit (31,566 miles). Everything would normally be fine but I recently switched positions at work which requires me to drive a lot (I do get compensated for travel + a stipend). Long story short, I expect to have about 40k miles on it at the end of the lease. At a penalty of $0.15 per mile over the limit, it will end up being a ~$1,200 penalty.
So I would be best served to just buy the lease at the end of it’s term, right? Maybe not. I just ran a KBB report and the car’s worth about ~$7k (10 months before the lease is even up). My car has a manual transmission which I believe really doesn’t help the value at all. The residual value on my lease contract is $12k. So if I want to buy the car out at the end of its term, I’d be completely upside down.
So, what are my options? Is the buyout option/price firm? Or can it be brought down to the market value at the time? Is the decision as simple as just calculating which option will screw me less: buying it upside down or paying the penalty?
Can’t you just proactively buy miles before the end of the lease? It’s my understanding that it’s cheaper to do this than to pay penalties at the end of the lease term. For example, when I took over a BMW lease, the original lessee bought a few thousand miles at $.10/each instead of $0.15 for penalty. Check with Ford.
Thanks for the suggestion. I did some research and it looks like I cannot buy additional miles while in the middle of a lease. I wish I could, though. That would solve several problems!
At lease end, you could lease another Ford and roll the $1200 cost into your new lease. You may be able to convince a dealer for a different brand to do that as well.
Or start setting aside $120/mo from your travel reimbursement/stipend so that $1200 won’t be as big of a hit to your wallet in August.
We are only guessing that the mileage overage is going to be 10k miles. What if it goes to 15k etc? It is possible on swapalease to find that magic bullet ie a car that was leased attractively and the owner did not end up driving much. I once found a GLA250 that still had 20k miles left on it for 10 months at 200 a month (when the market price for a new lease would be 300 + 3k down with only 800 miles a month). I do agree there are overheads with 2 cars but they are quantifiable, hence why I am offering it as a possible solution.
And you may get a Ford lease pull ahead program anyway (looks like Ford is desperate to sell it’s cars due to overproduction and/or poor planning)
What happened at Ford during the quarter?
Ford’s U.S. sales fell 6.3% from the third quarter of last year. That was due in part to the timing of deliveries to rental fleets. But Ford also lost ground to some competitors at retail, a worrying sign.
U.S. sales of Ford-brand cars dropped 20%, not a big surprise given the broad global trend away from sedans and toward SUVs. But U.S. sales of Ford-brand SUVs were down 3.4% in the third quarter. That’s something of a surprise, and I’m hoping that Ford explains what happened during the call. Sales of the F-Series pickup line, a major driver of Ford’s global profits, fell 3.3% – in part on short supplies of Super Duty models. Ford transitioned to the all-new 2017 Super Duty during the quarter.
Ford will NOT negotiate the residual buyout price. No way, no how. End of story.
Your cheapest out is to just eat the $1,200 overage cost at the end of the lease…or lease a competing brand’s car and hope they have a lease conquest incentive (GM currently has a $1,500 lease conquest for an Equinox, for example) to offset the $1,200 mileage penalty.
Does Ford have a repeat lease loyalty waiver? GM will waive up to $500 in excess mileage and $500 in wear and waive the turn in fee if you lease with them again within 10 days of turn in.
I was 12,000 miles over on my BMW lease when i returned. I decided to not sign my lease end inspection and let bmw hand the balance owed over to the debt collector, the moment the debt collector called, i settle d for 50% of the total owed. Worked out well for me!
