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June 16, 2009

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Rob

You will have a very hard time assessing a vehicle's value by talking to a dealer. It is in their best interest to ensure that you think your car is worth less than it actually is.

If the car is worth more than the trade in price the dealership will be absolutely the last person to tell him so, as if it is they will likely purchase it themselves and resell it for a profit. Unfortunate but a reality.

This individual's best bet would be to research online, places like autotrader to assess what similar vehicles are selling for, even go as far as to go out and take a look at them and inquire about purchasing to get a realistic price.

One thing that is almost certain is that these days there are phenomenal purchasing incentives that are unprecedented for any manufacturer, and all manufacturers want sales.

If you can afford it my suggestion is take the car back and finance a new one (or if in your research you find out that your car is worth more than its buy out value, definitely purchase it and either resell it yourself, or keep on driving.)

Also if you would like to make any inquiry about a lower buyout contact the company that LEASED the car to you, not the dealer.

Crash Corrigan

I think that it often depends on the car company involved. When I was in the used car business, a friend of mine was looking to get a deal on buying out his high-end SUV at the end of his lease. The manufacturer wanted $28k for it, and so he offered them $24K. They told him point blank that they did not negotiate on lease buy-outs. Fair enough, he thought, and walked away. Less than a month later, another dealer called me to ask if I'd be interested in a cheap SUV which he had purchased from the dealer auction. He was straight up and told me that he picked it up cheap for $12k and said that if I wanted it, I could have it for $13k. I made a quick phone call and sold it on for $14k, and as you've probably guessed by now, we're talking the exact same vehicle.

I'm guessing that certain car companies don't like to negotiate on buy-outs as it makes a mockery of the leasing figures, and once word gets around, could end up becoming the norm. However, in this case, the car company should have remembered an old car sales mantra: Sometimes, your first offer is the best one.

Maybe things have changed today what with the current economic climate, but as they always say: Nothing ventured, nothing gained, so you might as well try an offer.

Frank

The dealer may not end up with that leased car if the customer refuses it. Though it is true that the dealer to whom the customer returns the car get first right of refusal on any lease return, the dealer may opt not to buy this car because of many reasons - no room on the lot, slow moving car, condition, and so on. If this is the case the car is the property of the leasing company, and they will generally send it off to auction to get the most out of the sale.

Though I do agree with Rob with the incentives offered today in the market, I would look into a new car.

driver

Rob's last statement is correct but the leasing company WILL direct the customer back to the dealership. GMAC Leaseco, Ford Motor Credit, Financial Linx, whoever just want their money. Don't forget a lease agreement is a binding financial transaction, between the customer and the leasing company, not the dealer! The Auto Factory (in this case Hyundai), may support a lease by buying the rate down from the leasing company (Financial Linx). So say Flinxs' standard rate is 10%, Hyundai Canada buys the rate down to say 2.5%. They (Hyundai) aren't doing anything wrong as all manufacturers do it. It is marketing money plain and simple.
But back to the buyout, the customer is almost always better to get a new car for these reasons:
1) newer safety equipment, more technology, and better fuel economy.
2)full warranty!! After 3-5 years the car will start to break down. Think A/C system, all electronics and computers, brake and fuel lines, major servicing (timing belt, water pump, fuel pump, alternator, brake calipers/wheel cylinders, complete cooling system flush, brake fluid flush, transmission service, new tires, new battery, etc..)
3)lifestyle change, Do you still need that minivan? that big SUV, or just tried of that same car!! (all those scratches!!)
4) almost always the residual value of the car will be too high, unless the vehicle has extremly low kms, and is in fantastic shape.
5) come on be honest, it's a leased car... did you look after it like you owned it? All the little maintenance done? Rotate those tires every oil change? Didn't let the kids eat or drink in the car? If you are a REAL CAR GUY or GAL, you'd buy your car and look after it like it was your baby, you wouldn't lease it (think rent it) because it's really only a 3-5 year test drive, you don't own it.
So for almost everyone out there you should lease a new car every 3-4 years, so you don't get tried of your ride, you get the best fuel economy, the most up-to-date safety stuff on the market, and the worst maintenance would be to buy a new set of tires...maybe.

Gord

I tried to do what this guy wanted to do with a Nissan Maxima. The car was great but the new model came out making the value of mine drop more than 4 thousand below my buyout. I tried to negotiate and was given the following information. When you lease a car the ownership of the car remains with the factory. The dealer doesn't own the car. The dealer cannot negotiate because it doesn't have the right to, only the owner can. The dealer told me the car would go to auction and be sold for even less than I was offering. I tracked the car down after I walked away. It was sold in B.C. for 14,000. I offered 17,000 to the dealer and my buyout was just over 21,000.00. No wonder the car companies are going broke. The gave away 3,000.00 from me alone on this one deal. I now only buy used cars that have come off lease. The deals are excellent.

John Vernile

Call FinanciaLinx and make them an offer directly. Bypassing the dealer will save money and aggravation. The offer should be about 20% less than buyout, than negotiate. FinanciaLinx will incur costs to get rid of the car at auction and they are interested in negotiating.

Trevor McBride

It's important to remember that the car is owned by the manufacturer in a lease and not the franchise dealer. When you walk away the dealer simply leaves it on the lot until the manufacturer picks it up to send to the auction.

In the current market used cars like lease returns are cheap at the auctions and manufacturers like GM are losing big time. This is why you can no longer lease a GM vehicle.

I say walk away and find a car in similar condition and use the savings to pay for gas.

Any Car Finance

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