djrabbi

iTrader: (2)

I have my Lexus and was REALLY planning on getting something else after turning it in but I thought it will be a good car for my fiance/future wife. She has a Acura TL at the moment. Wondering once Lexus is up for turn in, can I use the TL against the purchase price to help lower payments or would I have to go through a loophole to get out of it?

DallasDave

iTrader: (1)

I am quite certain they will let you do this, but it might not be the best deal for you/your fiance. Here's what I feel this way:

• Often times a leased vehicle has a slightly inflated residual value. This is due to Manufacturer incentives and/or to help lower monthly payments/cash up front. I certainly don't know if this is the case with your car, but make certain and compare your residual value with comparable models being sold on the open market.
• Since the residual value of your car is already "a fixed amount", the only area the Dealership can make money is on your trade-in. So do your homework beforehand and get ready for a "low ball" quote.

Several years ago we (my wife and I) turned in a leased RX350. Our sister-in-law was in love with our RX and decided to purchase it. Fortunately for her, our residual value was just below market price for the RX. We dealt with a local Lexus Dealer and they did (what they called) an "in and out". We all went to the dealership together. First my wife and I went through the process to turn in the lease, then our sister-in-law and her husband came in to finance the vehicle. There was no haggling on the price (it was sold for exactly the residual), they just negotiated the usual stuff: finance rate, extended warranty, blah, blah. My wife and I left the room as we were "done" and didn't want to be part of "their" deal.

Hopefully your situation will be similar. If your residual value is at or below market price AND they are fair with the trade-in quote, bingo! If this comes through, you'll also have the sales tax benefit. You won't have to pay sales tax on the entire residual amount, only the amount left once the trade-in value is deducted from the sale price.

Good luck!

djrabbi

iTrader: (2)

Yeah I will do more research few months prior. I have a second car already so we wouldn't need another car. Only thing bad with VA is you have to pay tax on the whole car no matter if you are leasing/buying on the whole amount. I know in NJ, you only pay tax on the portion you use.