2 questions about buying a car at the end of a lease

[79elcamino]

next summer i am going to lease for the first time and i will most likely buy the car at the end of lease, i would usually have just financed the car from the beginning but i am saving for a house and wedding so the lower payments on the lease are better for me right now. my questions are how does buying a car at then end of the lease work and is there anything i can do to make the car cheaper to buy at the end of the lease?? thanks.

[Stephan]

Re: 2 questions about buying a car at the end of a lease

I'm on my third lease in a row, and looked at a payout in March on my 2nd. It doesn't pay. It costs to much. I got a new car and a new lease and rolled over remaining miles to new lease for same monthly cost plus a small down payment.

The buyout on my 2010 TL would have been about $24,000.00. I'd rather have a fully warranted brand new car at the end of 3 years. You could probably negotiate the buyout but then you need to go get a loan for it. Why not just get a new car?

[Stephan]

Re: 2 questions about buying a car at the end of a lease

Oh, and it seems that the cheaper you negotiate the car for at the beginning of the lease, the higher the buyout declared in your lease document is. It's all about how they play with numbers in the paperwork, always a known annoyance when negotiating a car, whether lease or buy. But that's fine, especially if you don't take the buyout.

[79elcamino]

Re: 2 questions about buying a car at the end of a lease

i like knowing that the car is mine plus id like to through some flowmasters on it.

[Stephan]

Re: 2 questions about buying a car at the end of a lease

I understand, but it will cost more if you use the buyout. And then you have this balloon payment (more than half the list price of the car) at the end of the lease and you have to get a loan (hypothetically) that will cost much more in interest than a new car loan. You really have to crunch the numbers.

Let's say for example, the buyout is $20,000 and the personal loan is 10% for 3 years. The "simple" interest at let's say 10% per annum would total $6,000 so that the buyout would cost you $26,000.00 (plus state tax on that of lets say 7% adding another $1,820.00). You really have to crunch the numbers.

If you want to OWN the vehicle, you're really much better off negotiating a good deal and getting a new car loan at a low interest rate.

[79elcamino]

Re: 2 questions about buying a car at the end of a lease

alright thanks

[BillyJack]

Re: 2 questions about buying a car at the end of a lease

If you want to OWN the vehicle, you're really much better off negotiating a good deal and getting a new car loan at a low interest rate.

Think about it; If you do a 3 year lease and then have to do a finance contract at the end of the lease to pay for the buyout and tax, you'll be making payments for 7 or 8 years. You're better off to negotiate a 6 year loan on a purchase form day one. I've been a salesman and sales manager for GM dealers for over 30 years and have worked thousands upon thousands of lease deals, so I can tell you whatever you need to know, especially if it's a GM car.
BTW, unlike the way it used to be years ago, end-of-lease purchase options are no longer negotiable on any leases thru GM-affiliated lease companies. Your buyout is right on the original contract.

Bill