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Old 04-14-2015, 08:53 AM
 
Location: Raleigh
13,623 posts, read 12,242,954 times
Reputation: 20013

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Quote:
Originally Posted by RunD1987 View Post
Hi, bit new with leasing and not sure of options to do at end of the lease. My lease with Toyota ends May 2016 with a cap of 32,000 miles. I really wasn't worried about miles, but lost my job now working farther from home. Was only traveling 6 miles to and from work a day. Now traveling 60 miles to and from work a day. Racking up about 280 miles a month with work alone. I am at 24,000 miles right now. I also have to get new tires after 32,000 miles was told be charged $100 to $400 by Toyota if no new tires on after 32,000 miles when turning the car in. Then over mileage charge was expensive think 50 cents first 1,000 miles and 1.00 for every mile after that.
This is only true if the dealership decides to flip the keys back to the bank and not by the car from Toyota Financial services. If the store sees the car as a viable used car on the lot for the residual value, it won't matter. If the car is in good condition, I would feel comfortable going six thousand miles over the lease without depreciating it too much that the dealer doesn't want to buy it. This, of course, assumes that the residual is on par with or below what the car is selling at auction for. Also, are you sure on the mileage? I thought most TFS leases were 12/15/18K per year.

Quote:
Originally Posted by RunD1987 View Post
I am in the process of fixing the rear bumper of the car, replacing it. Cost about $2,500. Also new windshield on the car driving down the highway rock cracked the windshield to a point the windshield needed to be replaced.
Why don't you let your insurance take care of that?

Quote:
Originally Posted by RunD1987 View Post
The buy out price of the car is $14,200.

I am thinking be better to buy it out do a 36 month loan to buy the car and continue to save money to buy a new car after three year's. Right now paying $325 a month for the lease. Hoping if I do a loan can do $250 a month think that be doable?

Appreciate the feedback. I figure can save up $5,000 for repairs or any cost owed on the car. For down payment if need to lease again.
How do you come to your payment numbers? At 36 months, you are looking at over $400/month to finance the entire buyout number, and closer to your original goal of $250/month at 5 years.

In any case, we need more details. Year, Make, model, trim, etc...
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Old 04-14-2015, 09:08 AM
 
Location: Texas
44,257 posts, read 64,046,055 times
Reputation: 73913
Your residual and your buyout don't have to be the same. The residual is just a guess. It could be higher or it could be lower.

In each case that I have leased car, the residual and the buyout were not the same at all. The first time, they set the residual too high. This resulted in a lower monthly payment for the time of the lease. However, once the lease was up, they realized the car wasn't worth that much. But that wasn't my problem. The next time I leased a car they set the residual too low. So then they owed me money. So what they tried to do instead was get me out of the lease early before I had equity in it. And changed my car out.

Either way, I win.

I like leases.
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Old 04-14-2015, 09:12 AM
 
5,481 posts, read 8,497,934 times
Reputation: 8284
Quote:
Originally Posted by stan4 View Post
Your residual and your buyout don't have to be the same. The residual is just a guess. It could be higher or it could be lower.

In each case that I have leased car, the residual and the buyout were not the same at all. The first time, they set the residual too high. This resulted in a lower monthly payment for the time of the lease. However, once the lease was up, they realized the car wasn't worth that much. But that wasn't my problem. The next time I leased a car they set the residual too low. So then they owed me money. So what they tried to do instead was get me out of the lease early before I had equity in it. And changed my car out.

Either way, I win.

I like leases.
Correct me if I'm wrong, but isn't the residual and the buyout the same thing? Isnt the residual the price you're contracted to pay if you want to purchase the car at lease end?
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Old 04-14-2015, 09:37 AM
 
Location: Texas
44,257 posts, read 64,046,055 times
Reputation: 73913
Quote:
Originally Posted by louie0406 View Post
Correct me if I'm wrong, but isn't the residual and the buyout the same thing? Isnt the residual the price you're contracted to pay if you want to purchase the car at lease end?
No.
Not at all.
The residual is what they base the depreciation on so that they can calculate your monthly payment.

My first car's residual after three years was set at $65k (original price $105k).
HA. Wound up being worth $48k (right around when the market wasn't so hot). And that is what they offered me to pay to buy the car if I wanted it.

[See, the great thing with that is that if I had bought the car and tried to sell it, I would have only been able to sell it for $48k (presumably) when I wanted a newer car. Instead, I paid a very low interest on the depreciation I would have had to take a hit on anyway and if the price was wrong, it's not my problem.]

Almost as a backlash, they set up my next car (same GM nonsense) at a too low residual of $32k (OP $76k).
Wrong. It wound up being worth more so I was out of that car early. They weren't interested in my creating equity that they'd have to cut me a check for.

My current lease is at 0.9% with Mercedes Benz (OP $120k). I mean, give me a break. Why the hell would I buy the car if I could come out a winner either way and only pay 0.9% on the depreciation of the car?

I accept all forms of free and nearly free money.
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Old 04-14-2015, 11:12 AM
 
Location: Birmingham
11,787 posts, read 17,634,822 times
Reputation: 10119
Quote:
Originally Posted by louie0406 View Post
Correct me if I'm wrong, but isn't the residual and the buyout the same thing? Isnt the residual the price you're contracted to pay if you want to purchase the car at lease end?
The residual is expressed as a percentage to determine your payment. Sometimes people will say residual value when they talk about the lease buyout amount/payoff so that may be what you are thinking.
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Old 04-14-2015, 11:19 AM
 
5,481 posts, read 8,497,934 times
Reputation: 8284
Quote:
Originally Posted by Tourian View Post
The residual is expressed as a percentage to determine your payment. Sometimes people will say residual value when they talk about the lease buyout amount/payoff so that may be what you are thinking.
So let me ask you this. The lease on my wife's 2012 Nissan rogue is coming to an end in a few months. The residual is $12,900. Is that not the price I would need to pay if we decided to buy it out?
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Old 04-14-2015, 11:38 AM
 
5,481 posts, read 8,497,934 times
Reputation: 8284
Ok just checked my account online. My residual is $12,900 and the payoff amount is as follows:

Payoff Amount: $16,358.81
Good Through: 04/26/15
The security deposit of $0.00 has been deducted, and the payoff includes the appropriate taxes required by your state.

Does this mean I have equity in my lease?
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Old 04-14-2015, 01:21 PM
 
Location: Raleigh
13,623 posts, read 12,242,954 times
Reputation: 20013
Quote:
Originally Posted by louie0406 View Post
Ok just checked my account online. My residual is $12,900 and the payoff amount is as follows:

Payoff Amount: $16,358.81
Good Through: 04/26/15
The security deposit of $0.00 has been deducted, and the payoff includes the appropriate taxes required by your state.

Does this mean I have equity in my lease?
Hmm...How much longer do you owe on the lease and what do you owe on it? Payoff is generally residual+payments. Do you have roughly $3,458 in payments left? Unless I'm missing something, that seems to be a big gap. It could be that the residual doesn't factor in all of the taxes and fees.

Equity in a lease comes when the buyout/residual, that you can purchase the car for, is less than the market rate for the car. It is no different than equity on a car that you bought with a loan.

Quote:
Originally Posted by louie0406 View Post
So let me ask you this. The lease on my wife's 2012 Nissan rogue is coming to an end in a few months. The residual is $12,900. Is that not the price I would need to pay if we decided to buy it out?
Yes, at the end of the lease, it is that amount.

I think there is some confusion over the residual value as written in the lease, and the actual cash value as determined by the market.

I would believe that in cases of the bank being really underwater on the car, that they would offer the leaseholder a lower buyout number to avoid the hassle of retaking posession and losing their shorts at the auction.
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Old 04-14-2015, 01:28 PM
 
5,481 posts, read 8,497,934 times
Reputation: 8284
Quote:
Originally Posted by JONOV View Post
Hmm...How much longer do you owe on the lease and what do you owe on it? Payoff is generally residual+payments. Do you have roughly $3,458 in payments left? Unless I'm missing something, that seems to be a big gap. It could be that the residual doesn't factor in all of the taxes and fees.

Equity in a lease comes when the buyout/residual, that you can purchase the car for, is less than the market rate for the car. It is no different than equity on a car that you bought with a loan.



Yes, at the end of the lease, it is that amount.

I think there is some confusion over the residual value as written in the lease, and the actual cash value as determined by the market.

I would believe that in cases of the bank being really underwater on the car, that they would offer the leaseholder a lower buyout number to avoid the hassle of retaking posession and losing their shorts at the auction.
I have 4 payments of $279 left = $1,116.
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Old 04-14-2015, 05:42 PM
 
2,189 posts, read 2,590,755 times
Reputation: 3736
First time leasing for me as well, I always thought the residual amount was the cost to buy the car at the end of the lease and it's interesting to know that if I ask, they might let me buy the car at a lower price than the residual value?
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