Financing a Lease Buyout

[pkulak]

The residual on my 2-year SV/charge lease is about $18,000. At first I thought no way I'd be buying it out, but now I'm thinking it may be possible. I could have about $1000 of mile overage, and then if gas is just a tad higher in a year and a half ($4.50 or so) the true value could be about $16,000 or so. Then, after my mileage fees and the $300 turn-in fee, I'd only be overpaying a bit to get a car that I know has lived it's whole life in the PNW. And with the news that the next-gen isn't coming out until '17, I'll need to do something until then. The other option is re-leasing pretty much the same car all over again.

My question: how would I finance a car that I'm buying for more than it's worth? Would I have to add the difference onto my deposit? Putting down 4-5 grand would be a bit of a bummer. Anyway, thanks to anyone who's familiar with the stuff!

 

[MikeinDenver]

What does NADA say the value of the vehicle is based on your mileage and options? That is typically what banks will finance for.

 

[smkettner]

Call your credit union or bank and tell them the buyout number and they will get you the money.
Should not be a big deal if your credit is good.

 

[evnow]

Checkout the buyout monthly payment vs a 3 year lease on a new Leaf - even after accounting for resale value after 3 years.

Because of the tax credit, you will come out ahead with a new lease.

 

[RonDawg]

Residual on my car after 3 years and 36k miles is supposed to be $16,800. Checking NADA for a 2011 with only 30k miles (which at the rate I'm going is all I expect to put on it) is saying the best I could hope for is $15,725 clean retail. Deduct another $650 for an additional 6k miles.

Edmunds is a bit more generous, saying a 2011 SV with 30k miles is worth $16,664 at dealer retail, of which $599 is added due to less than average mileage. KBB is very pessimistic, saying it's only worth $13k even in excellent condition.

 

[pkulak]

Residual on my car after 3 years and 36k miles is supposed to be $16,800. Checking NADA for a 2011 with only 30k miles (which at the rate I'm going is all I expect to put on it) is saying the best I could hope for is $15,725 clean retail. Deduct another $650 for an additional 6k miles.

Edmunds is a bit more generous, saying a 2011 SV with 30k miles is worth $16,664 at dealer retail, of which $599 is added due to less than average mileage. KBB is very pessimistic, saying it's only worth $13k even in excellent condition.

Ah, good to know. Though, my battery will also probably be in a lot better shape than yours.

 

[kevin672]

I've never done it but from what I understand you should be able to buy out your lease for the cars actual value and not the lease residual when it's time to turn it in.

 

[pkulak]

I've never done it but from what I understand you should be able to buy out your lease for the cars actual value and not the lease residual when it's time to turn it in.

Really? I heard that NMAC never ever negotiated.

 

[MikeinDenver]

I've never done it but from what I understand you should be able to buy out your lease for the cars actual value and not the lease residual when it's time to turn it in.

Really? I heard that NMAC never ever negotiated.

That would be really silly on their part. If the amount they want is more than it is worth just tell them they can have it back process all the paperwork then try to find a buyer or you will buy it for the actual value. Their choice.

 

[pkulak]

Yes, large, multinational corporations always act totally rationally in individual situations.

I would like to know if anyone else has actually been able to negotiate with NMAC.

 

[LTLFTcomposite]

If you aren't upside down on your house you might consider a HELOC. The interest is probably deductible and the rate lower. JMO if you go that route resist the urge to pay the minimum, pay it off aggressively.

 

[RonDawg]

I would like to know if anyone else has actually been able to negotiate with NMAC.

The earliest leased Leafs have already been returned, and I have not yet heard anything about NMAC willing to budge on the residual.

 

[MikeinDenver]

Yes, large, multinational corporations always act totally rationally in individual situations.

I would like to know if anyone else has actually been able to negotiate with NMAC.

One would hope they at least hire people with some common sense that can understand how math works.

 

[MikeinDenver]

I would like to know if anyone else has actually been able to negotiate with NMAC.

The earliest leased Leafs have already been returned, and I have not yet heard anything about NMAC willing to budge on the residual.

If the difference is that significant could you not just turn it in then turn around and buy for the market price? Seems very dumb on Nissan's part.

 

[RonDawg]

I would like to know if anyone else has actually been able to negotiate with NMAC.

The earliest leased Leafs have already been returned, and I have not yet heard anything about NMAC willing to budge on the residual.

If the difference is that significant could you not just turn it in then turn around and buy for the market price? Seems very dumb on Nissan's part.

They may not allow you to do that. If Nissan doesn't want it for its own Certified Pre-Owned program, they'll just send it to auction.

 

[smkettner]

I trust NMAC knows exactly what they are doing. Value to the customer may often exceed the used car market for the original owner.
If you want to let go of your babied vehicle to save a few dollars on a used vehicle from who knows where... NMAC says go for it.
With hundreds of vehicles coming off lease every week they have far more experience than us.

 

[LTLFTcomposite]

Don't forget too they get to stick you with that buyout fee if you decide to keep the car, or the termination fee if you don't. Even if they sell the car for less than the residual they'll make it up in other ways. I'm withholding final judgement until I see what kind of lease deal I can get next time around, but I'm quickly concluding a Leaf is far from the cheapest way to go down the road, even among new car choices.

 

[MikeinDenver]

Don't forget too they get to stick you with that buyout fee if you decide to keep the car, or the termination fee if you don't. Even if they sell the car for less than the residual they'll make it up in other ways. I'm withholding final judgement until I see what kind of lease deal I can get next time around, but I'm quickly concluding a Leaf is far from the cheapest way to go down the road, even among new car choices.

The LEAF isn't the cheapest means but for those that don't want to use any petrol and be able to "fuel" up at home it is a pretty decent value. If I wanted the cheapest mode of transportation I would go with a scooter or if four wheels a Nissan Versa base model. However neither of those is an attractive option in my opinion. For me the LEAF wasn't about being the cheapest way it was about utilizing newer technology and having the ability to never stop at a petrol station.

 

[MikeinDenver]

I trust NMAC knows exactly what they are doing. Value to the customer may often exceed the used car market for the original owner.
If you want to let go of your babied vehicle to save a few dollars on a used vehicle from who knows where... NMAC says go for it.
With hundreds of vehicles coming off lease every week they have far more experience than us.

Maybe a little by which I mean a few hundred but no way is it worth $1K+ over market value to keep the car. I think it has more to do with a policy set without regard for customer satisfaction or business sense.

 

[LTLFTcomposite]

They don't want people buying out the cars at lease end, they want them buying or leasing new ones and selling the used ones as certified preowned, making even more money.