Taktix1

The lease for my 07 IS250 AWD is up in July 2010. I'm at 29k miles and only paid for 30k. I had a few questions:

1) Is there a way for me to just purchase the car outright now? or will the dealership tack on the extra months of payments they'll be missing out on by me purchasing early?
2) Are there any other fees for going over the limit in miles besides the .25 cents a mile?
3) I did a search and someone else who leased an LS460 was turning in his lease and wanted to know if the lease buy out price was negotiable. The replies seemed split 50/50 whether or not that can happen, any one else have any thoughts?

iRock

iTrader: (12)

U definately can buy the car out anytime u want

15951

1. You can purchase the car anytime during the lease, BUT the purchase price will be the agreed upon residual plus the balance of outstanding payments. So if the residual is $22k and you still owe 6 payments at $500, the purchase price will be $25k plus applicable taxes, etc.

2. No, BUT going over the limit in miles means you're driving the car a lot, so there's more opportunity for incidental damages (dents, etc.) that you'll be responsible for at lease termination. Of course, buying the car exempts you from any fees, mileage or otherwise.

3. No, the lease buyout is not negotiable. Believe me, I've beat this one to death, and the bottom line is that all you can really do to potentially get a lower buyout on the vehicle is to turn it in, hope your dealer keeps the car (does not go to auction with it), and then make an offer on it the next day. Even if this scenario does work out for you, you'll still be responsible for all fees at lease end, as you'll technically be returning the vehicle and then purchasing it later.

Some leasing companies negotiate lease-end buyout. LFS is not one of them. This used to really tick me off, but when you look at it from their standpoint, it makes sense: You leased the car based on an agreed-upon residual value, and made payments accordingly. Taking money off the sale at end of lease is really back-end negotiating. Even though it's often in the leasing company's best interests to do so to move cars and avoid reconditioning fees, most don't these days.

Taktix1

Thanks for all the great info! Does it make financial sense to purchase a car after a lease? I've been hearing that it's usually not a good idea

ScKcBc

iTrader: (2)

Usually it doesnt. Its real simple to calculate.

Add up your # of payments and get a total (eg. $500 a month x 36 months is $18,000)

Then add that to your buyout. (eg. buyout = 22k, so 40k total spent)

Now to make it worse, take that 22k buyout and use a finance calculator (unless you have 22k cash to pay it off which most people dont).

A decent rate right now is 6% on a 5 year loan on a 3 year old car (which your car will be in 7/10). At 6% financing 22k for 5 years is going to be $425.32. Multiply that by 60 and you get $25,519. Now add that to your original 18k and you get 43519$ and thats NOT including the TAX on the buyout which in NY would cost you another 1800$ or so.

So then you can decide if it was worth it.




Alternatively, you can just look at your buyout and look at what a similar year/make/model is going for. If your buyout is 25k, but a similarly equipped car in the same year is going for 22k, then its DEF not worth it to buy it out because you basically have it sold for free back to the dealer. Then you can just buy another one if you really like the car.

IS4U2NV

This isn't 100% accurate. You actually don't pay interest on the remaining lease payments for the car (which are figured in to what your monthly payment is) An example stating that your buyout price is $22K and you have 6 payments left of $500/ea for a total of $3000 to make the buyout $25K is actually higher than what you would actually pay if you purchase the car before the lease is up. All you have to do is either contact your dealer and find out exactly what your buy out price is on the car, or call the lexus financial service number and go through the automated menus until you get to that option and it will tell you exactly what your buyout price is month by month as you make payments. Given there are many factors that vary from customer to customer with percentage rates/deals etc, and it may not add up to much of a difference, but, the total is lower than what you would assume it to be.
Given, if you choose to go from a lease in to purchasing a vehicle, depending upon what your interest/term rates are....yes....it will be indeed adding to the price of the car in the long run, but the original price is not going to be what was previously stated here. Just thought I would let you know that it is as simple as making a phone call to find out.

tex2670

Did you look at your lease? That will answer the basic questions. As to whether it makes financial sense, it depends on what the blue book value of the car is vs your buyout (plus sales tax).