Are Lexus end of lease Purchase Option prices negotiable?
06-17-09, 08:02 AM
#1
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Are Lexus end of lease Purchase Option prices negotiable?
I have a 2006 SC 430 which I leased for 3 years/12,000 miles per year, and am extending another 6 months. The new purchase option price at the end of the lease is $32,500.
Someone told me though that with their BMW lease, they were recently able to negotiate and knock off almost $10,000 off a $50,000 end of lease purchase price.
Do Lexus dealers in general also negotiate? And if so how much do people think I might be able to get my terms reduced by?
Someone told me though that with their BMW lease, they were recently able to negotiate and knock off almost $10,000 off a $50,000 end of lease purchase price.
Do Lexus dealers in general also negotiate? And if so how much do people think I might be able to get my terms reduced by?
06-17-09, 08:10 AM
#3
Lexus Champion
around here, Houston, Lexus doesn't seem to be able negotiate too much...I have a friend that was turning in a RX330 off-lease and the residual was markedly higher than KBB or similar vehicles for sale but they couldn't drop the price that much...so he had to turn it in and turn around and buy it from them....stupid but that's the way they seem to operate here.
Same guy has a 335i that his lease is up in July....he's trying to get a deal on it...we'll see....
Same guy has a 335i that his lease is up in July....he's trying to get a deal on it...we'll see....
06-17-09, 08:18 AM
#4
Lexus Champion
BMW subsidizes the residual values on their leases so much that it makes lease-end purchase completely retarded to even consider.
My 335i's lease-end value is 34-35k (sticker was 47,xxx, my actual negotiated price was I think 41k... got a heck of a deal)... that's after 2 years and 34k miles and a wreck to top it all off.
KBB states the current trade-in value of the car is $24,225 in good condition, and that's not considering that it has a wreck on the title and I'm not even sure if you could consider it to be in good condition... might take a few hours of work to get it back to good.
10+ grand in difference between lease end buy option and trade-in is just crazy!
My 335i's lease-end value is 34-35k (sticker was 47,xxx, my actual negotiated price was I think 41k... got a heck of a deal)... that's after 2 years and 34k miles and a wreck to top it all off.
KBB states the current trade-in value of the car is $24,225 in good condition, and that's not considering that it has a wreck on the title and I'm not even sure if you could consider it to be in good condition... might take a few hours of work to get it back to good.
10+ grand in difference between lease end buy option and trade-in is just crazy!
My mom got 3k off her RX400h buyout. She spoke with LFS directly.
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06-17-09, 08:56 AM
#8
I have a 2006 SC 430 which I leased for 3 years/12,000 miles per year, and am extending another 6 months. The new purchase option price at the end of the lease is $32,500.
Someone told me though that with their BMW lease, they were recently able to negotiate and knock off almost $10,000 off a $50,000 end of lease purchase price.
Do Lexus dealers in general also negotiate? And if so how much do people think I might be able to get my terms reduced by?
Someone told me though that with their BMW lease, they were recently able to negotiate and knock off almost $10,000 off a $50,000 end of lease purchase price.
Do Lexus dealers in general also negotiate? And if so how much do people think I might be able to get my terms reduced by?
06-17-09, 09:29 AM
#9
LOL @ the fairy tale stories of friends, moms, the dog getting $10k, $20k off residuals. Absolute BS.. With residuals, the banks is the one who guarantees the value at lease end thus they set it. If any discounts are to be had, it would be the money factor at lease inception.. That number will go down based on your down payments (MSD's and the like).. Now, with regards to negotiating the residual with Lexus.. Yeah right... See for yourself...
The Lexus Lease
There are two basic types of leases available in the automobile industry - Closed End and Open End. Lexus offers only a Closed End lease. To help you compare, both are discussed below:
Open End Lease
Like all types of leases, the end value of the vehicle is established at the beginning of the lease for payment calculation. At the end of the lease the customer, or lessee, may have the option to purchase the vehicle for either the end value determined at the beginning of the lease or the fair market value determined at the end of the lease term. Alternatively, the customer may choose to simply return the vehicle to the leasing company.
The lessee is encouraged to maintain the vehicle's physical and mechanical condition in order to realize the highest resale value at lease end. Any portion of the sale price falling short of the end value is the lessee's responsibility.
Closed End Lease
Unlike the open-end lease, this option does not require the customer (lessee) to "guarantee" a predetermined end value. Instead, the leasing company assumes the risk of estimating the resale price. The lessee agrees to conditions regarding the vehicle's overall condition and kilometer restrictions. Some closed end lease contracts contain an "option to buy" provision for the lessee.
Lexus offers significant advantages over the many competitive lease programs available today.
1. Full Disclosure Lease
The Lexus lease contains full disclosure and is written in plain language. All contract details and components for payment calculation are spelled out up front so you know what to expect from start to finish.
2. No Early Termination Penalty
The Lexus Lease assesses no penalty for early termination, aside from depreciation due to usage. You may choose to return the vehicle under the terms of the lease and assume responsibility only for any deficiency due to depreciation. Alternatively, you may simply purchase the vehicle for the remaining principal balance plus taxes and other related charges. Compare this to some competitive leases that charge additional fees or penalties without giving you the option to conclude your lease by purchasing the vehicle.
3. No Termination Fee
The Lexus Lease charges no administrative fee at the conclusion of your lease. In addition, your security deposit is 100% refundable provided there is no excessive wear and tear and the vehicles has not exceeded the allotted kilometres. Compare this to many other leases, which carry a lease termination fee.
4. Option To Purchase
The Lexus Lease is a Closed End lease with an option for you to purchase. The purchase price is based on the predetermined end value plus taxes and other related charges. Should you choose not to exercise this option, your Lexus dealer will handle all the details related to terminating the lease agreement.
5. End Value Guarantee
The closed end Lexus Lease provides the security of knowing that your vehicle's residual or end value is fully guaranteed by Lexus Financial Services. The responsibility for the vehicle's market value is assumed by Lexus Financial Services (Lexus). The customer is responsible only for the vehicle's overall condition as detailed on the lease agreement (appearance, mechanical condition) and charges for kilometres in excess of the allotted amount (excess kilometre charges).
6. What is Guaranteed Asset Protection or GAP protection?
GAP protection is automatically included in all Lexus Leases.
If your vehicle is declared a total loss, GAP will cover the difference (the gap), after you pay the deductible, between what you owe on the remainder of your lease and the amount of your insurance settlement. You are only responsible for excess kilometer charges and any pre-existing damage to the vehicle.
7. "ENCORE"
The "ENCORE" program was created to reward previous customers of Lexus Financial Services. Qualifying customers may receive a reduction in the annual interest rate and full waiver of the security deposit. To qualify, one must have financed or leased through Lexus Financial Services within the last 24 months with a minimum of 12 months activity. Payments must have been made in accordance with the terms of the agreement and the customer will have to qualify for the lease of a new vehicle.
8. Pre-paid Lease Plan
The Pre Paid lease allows you to prepay the vehicle cost for a specific period of time without having to invest in the entire vehicle. In addition to all the advantages of the Lexus lease, benefits include a reduction in finance charges and the convenience of no monthly payments. Compared to a cash purchase, the Pre Paid lease enables you to retain a portion of the vehicle price which you can use for other purposes. http://www.lexus.ca/lexus/experience...ing_second.jsp
There are two basic types of leases available in the automobile industry - Closed End and Open End. Lexus offers only a Closed End lease. To help you compare, both are discussed below:
Open End Lease
Like all types of leases, the end value of the vehicle is established at the beginning of the lease for payment calculation. At the end of the lease the customer, or lessee, may have the option to purchase the vehicle for either the end value determined at the beginning of the lease or the fair market value determined at the end of the lease term. Alternatively, the customer may choose to simply return the vehicle to the leasing company.
The lessee is encouraged to maintain the vehicle's physical and mechanical condition in order to realize the highest resale value at lease end. Any portion of the sale price falling short of the end value is the lessee's responsibility.
Closed End Lease
Unlike the open-end lease, this option does not require the customer (lessee) to "guarantee" a predetermined end value. Instead, the leasing company assumes the risk of estimating the resale price. The lessee agrees to conditions regarding the vehicle's overall condition and kilometer restrictions. Some closed end lease contracts contain an "option to buy" provision for the lessee.
Lexus offers significant advantages over the many competitive lease programs available today.
1. Full Disclosure Lease
The Lexus lease contains full disclosure and is written in plain language. All contract details and components for payment calculation are spelled out up front so you know what to expect from start to finish.
2. No Early Termination Penalty
The Lexus Lease assesses no penalty for early termination, aside from depreciation due to usage. You may choose to return the vehicle under the terms of the lease and assume responsibility only for any deficiency due to depreciation. Alternatively, you may simply purchase the vehicle for the remaining principal balance plus taxes and other related charges. Compare this to some competitive leases that charge additional fees or penalties without giving you the option to conclude your lease by purchasing the vehicle.
3. No Termination Fee
The Lexus Lease charges no administrative fee at the conclusion of your lease. In addition, your security deposit is 100% refundable provided there is no excessive wear and tear and the vehicles has not exceeded the allotted kilometres. Compare this to many other leases, which carry a lease termination fee.
4. Option To Purchase
The Lexus Lease is a Closed End lease with an option for you to purchase. The purchase price is based on the predetermined end value plus taxes and other related charges. Should you choose not to exercise this option, your Lexus dealer will handle all the details related to terminating the lease agreement.
5. End Value Guarantee
The closed end Lexus Lease provides the security of knowing that your vehicle's residual or end value is fully guaranteed by Lexus Financial Services. The responsibility for the vehicle's market value is assumed by Lexus Financial Services (Lexus). The customer is responsible only for the vehicle's overall condition as detailed on the lease agreement (appearance, mechanical condition) and charges for kilometres in excess of the allotted amount (excess kilometre charges).
6. What is Guaranteed Asset Protection or GAP protection?
GAP protection is automatically included in all Lexus Leases.
If your vehicle is declared a total loss, GAP will cover the difference (the gap), after you pay the deductible, between what you owe on the remainder of your lease and the amount of your insurance settlement. You are only responsible for excess kilometer charges and any pre-existing damage to the vehicle.
7. "ENCORE"
The "ENCORE" program was created to reward previous customers of Lexus Financial Services. Qualifying customers may receive a reduction in the annual interest rate and full waiver of the security deposit. To qualify, one must have financed or leased through Lexus Financial Services within the last 24 months with a minimum of 12 months activity. Payments must have been made in accordance with the terms of the agreement and the customer will have to qualify for the lease of a new vehicle.
8. Pre-paid Lease Plan
The Pre Paid lease allows you to prepay the vehicle cost for a specific period of time without having to invest in the entire vehicle. In addition to all the advantages of the Lexus lease, benefits include a reduction in finance charges and the convenience of no monthly payments. Compared to a cash purchase, the Pre Paid lease enables you to retain a portion of the vehicle price which you can use for other purposes. http://www.lexus.ca/lexus/experience...ing_second.jsp
06-17-09, 10:09 AM
#11
Lexus Test Driver
LOL @ the fairy tale stories of friends, moms, the dog getting $10k, $20k off residuals. Absolute BS.. With residuals, the banks is the one who guarantees the value at lease end thus they set it. If any discounts are to be had, it would be the money factor at lease inception.. That number will go down based on your down payments (MSD's and the like).. Now, with regards to negotiating the residual with Lexus.. Yeah right... See for yourself...
If there is a $6,000 swing between the residual and the fair market price, why would the lender refuse to consider a negotiated buyout. They may end up ahead.
Again--I understand that it is not the norm, but at the end of the lease, if the lender knows that there is no way they can recoup the contract's residual price, why not negotiate?
06-17-09, 10:39 AM
#12
That proves nothing. While I agree that, historically, buy-out prices were inflexible, that language doesn't say that the bank can't save their skin by negotiating if the residual is way overpriced due to unforseen economic developments.
If there is a $6,000 swing between the residual and the fair market price, why would the lender refuse to consider a negotiated buyout. They may end up ahead.
Again--I understand that it is not the norm, but at the end of the lease, if the lender knows that there is no way they can recoup the contract's residual price, why not negotiate?
If there is a $6,000 swing between the residual and the fair market price, why would the lender refuse to consider a negotiated buyout. They may end up ahead.
Again--I understand that it is not the norm, but at the end of the lease, if the lender knows that there is no way they can recoup the contract's residual price, why not negotiate?
06-17-09, 12:43 PM
#13
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Posts: n/a
LOL @ the fairy tale stories of friends, moms, the dog getting $10k, $20k off residuals. Absolute BS.. With residuals, the banks is the one who guarantees the value at lease end thus they set it. If any discounts are to be had, it would be the money factor at lease inception.. That number will go down based on your down payments (MSD's and the like).. Now, with regards to negotiating the residual with Lexus.. Yeah right... See for yourself...
In this market today, ANYTHING is negotiable.
To the OP again if the dealer isn't working with you, talk to LFS directly.
06-17-09, 12:51 PM
#14
Lexus Test Driver
I would think it's a no-brainer, but clearly it's not, so there must be more to it.
06-17-09, 03:08 PM
#15
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LOL @ the fairy tale stories of friends, moms, the dog getting $10k, $20k off residuals. Absolute BS.. With residuals, the banks is the one who guarantees the value at lease end thus they set it. If any discounts are to be had, it would be the money factor at lease inception.. That number will go down based on your down payments (MSD's and the like).. Now, with regards to negotiating the residual with Lexus.. Yeah right... See for yourself...
Thanks for the replies. Seems uncertain whether Lexus dealers or LFS negotiate or not.
Anyone actually ever successfully negotiated an end of lease purchase with Lexus?