End Lease to Purchase conversion. Help appreciated.

[vvvviper]

The bank notified me that I have 10 payments left before my 48 month lease on my '01 Sapphire Blue RT/10 is up. They're suggesting I convert the lease and buy the car now.

The company I work for has generously made all the monthly payments, and will continue to lease end. They're also allowing me to do whatever I want with the car when the lease is over. I can either turn the car in, buy it and resell it, or just buy it and keep it. Considerations include: 9K in mods that came out of my own pocket. I also recently bought a DC extended service contract. 15K miles on the car.

Residual on the car (in 10 months) is 38K. Seems a little low to me. Couple of questions:

1. If I decide to turn the car in, and it's worth more than the residual at end of lease term, does the recieving dealer cut me a check for the difference?

2. If I buy the car outright, am I responsible for any hidden costs above and beyond the payoff / residual? Sales tax?

3. If I want to move into a white Mamba, will I have any additional negotiating power at end of lease term of this vehicle?

4. I think turning the car in is really a poor choice. I'm inclined to just keep it. If I buy it, should I do it now (as the bank suggests) or should I wait until lease end? If the firm picks up the next 10 payments, it seems like I should wait.

Any and all opinions (positive or negative) are appreciated.

 

[King RT10]

Buy the car. The dealer will not cut you a check but instead make the money himself. If you do not want it let someone on this board buy it.

 

[PhoenixGTS]

Anecdotally, my best bud had a Ford Expedition coming off lease. The buyout per the contract was over $20k. He researched that the wholesale auction value of the truck was only $15.4k. He then offered the leasing company $15.4k based on this being the amount they would realize from their own sale if they took the vehicle back (plus they would have to actually take possession for awhile, insure it, and do more paperwork than if he bought it). They said forget it the contract says $20k+. He said either take the $15.4k buyout offer of come and get it. They took the $15.4k and he effectively stuck the leasing company with $5k of depreciation. I never knew lease buyouts were negotiable, but perhaps that is why my bud is rich and I'm not. Moral of this long story is do the numbers. See what they could sell the car for if you gave it back, and don't be afraid to take a swing and try to negotiate the buyout price. All they can say is no.

 

[AviP]

I had leased a 95 Supra TT for 36 months. I totalled it in the 19th month and received a check for 5K from the insurance company. In effect my 19 month lease ended up being a 10 month lease.

 

[vette2viper]

1. If I decide to turn the car in, and it's worth more than the residual at end of lease term, does the recieving dealer cut me a check for the difference?

A. While anything is possible, I surely wouldn't hold my breath for this to happen...very unlikely!

2. If I buy the car outright, am I responsible for any hidden costs above and beyond the payoff / residual? Sales tax?

A. There is usually a processing fee...about $350. Both a friend and I did this around the same time and neither of us had to pay any sales tax. Not sure why because during the lease you are paying a tax on the portion of the total value that you are using...48 months in your case. Also, I didn't pay the processing fee because I had a security deposit that was returned to me as a credit, so it offset that fee.

3. If I want to move into a white Mamba, will I have any additional negotiating power at end of lease term of this vehicle?

A. Certainly not that I can see or would hope for.

4. I think turning the car in is really a poor choice. I'm inclined to just keep it. If I buy it, should I do it now (as the bank suggests) or should I wait until lease end? If the firm picks up the next 10 payments, it seems like I should wait.

A. Ok...first, if going to buy, wait the 10 months...let your company pay. Now, IMHO, you have had this car since day one and know the full condition of it. You would be buying this car for $38k...quite a good deal to me! And the money you already put into mods is still there.

Bottom line on all of this...only YOU know if you want the car and would be happy with the deal. Sounds like in black and white, you have things going for you. Think it over and make your best decision. Good luck with whatever you decide.

 

[SNKEBIT]

what co. do ya work for????? I want that job....

 

[Brad04Mamba]

I lease all my vehicles for various reason, so let me try to answer your questions.

1. If I decide to turn the car in, and it's worth more than the residual at end of lease term, does the recieving dealer cut me a check for the difference?

No! They usuall sell it at auction hoping the residual value covers it.

2. If I buy the car outright, am I responsible for any hidden costs above and beyond the payoff / residual? Sales tax?

Sometimes there is an aquisition fee of a couple of hundred dollors, nothing big. When you register the car after buy out you will pay sales tax on the residual.

3. If I want to move into a white Mamba, will I have any additional negotiating power at end of lease term of this vehicle?

Don't understand the question. Just remember, a lease is just another form of financing, you can get a pay off number anytime and pay it off. If the vehicle is worth more then buy it,if less, turn it in. If you want a Mamba, don't buy the car and sell it, as you will have to pay sales tax. You can sell the car at any time in a lease also, just have the buying party pay the lease company off, and they will send you any profit, then go buy a Mamba.

4. I think turning the car in is really a poor choice. I'm inclined to just keep it. If I buy it, should I do it now (as the bank suggests) or should I wait until lease end? If the firm picks up the next 10 payments, it seems like I should wait.

Your right, I would keep the car until closer to lease end. If you want a new car, sell your 01 before the lease end, pocketing the profit, then get a new car. If you want to keep the car then just pay them the pay off and go. Most likely the residual will be less than the value of the car so turning it in is probably the worst thing to do at any time.

Any other question PM me.

 

[ViperJohn]

Buy it, if you don't want it, offer the buyout to someone on the board for a small fee.

 

[vvvviper]

Hello again:

I just want to thank everyone who was kind enough to respond. Some great ideas were posted and some options were mentioned that I had never considered.

I'm still not exactly sure what I'm going to do with the car. I do have quite a bit invested in it now. I know this Viper and I really enjoy it. I should probably keep it.

If I do sell it, it would only be to get into one of those gorgeous white Mambas. If I go that way, I will take the above advice and offer the buyout to members on this board first.

Turning the lease in is really flawed thinking.

Thanks again,