End of Lease options
12-29-15, 03:51 PM
#1
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End of Lease options
I'm at the end of my lease next month and not really sure what my options are or the best way to go about finding them out. I used the 'lease to own option' and put down $5,000 two years ago. I've paid my monthly payments on time and have kept the maintenance appointments as required. When I got my Lexus, I had outstanding credit! Unfortunately, I had some financial losses this past year and my credit is not so good. That being said, I was never late on a car payment and am able to keep making payments. I'm not sure if I should talk to the same dealer or directly with Lexus financial. Can I negotiate my options? If anyone has any advice, I would greatly appreciate it!
Misc. info:
2014:Lexus IS250 - 4 door Sedan
Gross Cap. Cost: $38,289
Down payment: $6,800 (includes taxes) -- Agreed to pay $5k as a down payment before the other fees.
All maintenance performed on time by Lexus.
No late payments.
Possible downers:
* Allowed mileage is 20k -- I'm over by approx. 15k. My mileage is approx. 35k
* Car was in two accidents: Both times hit and run while the car was parked. Repairs done by authorized Lexus shop.
*Small scratch on the back driver's side door -- surface scratch
*Small beginning of a crack in leather on arm rest/storage bin between seats.
Misc. info:
2014:Lexus IS250 - 4 door Sedan
Gross Cap. Cost: $38,289
Down payment: $6,800 (includes taxes) -- Agreed to pay $5k as a down payment before the other fees.
All maintenance performed on time by Lexus.
No late payments.
Possible downers:
* Allowed mileage is 20k -- I'm over by approx. 15k. My mileage is approx. 35k
* Car was in two accidents: Both times hit and run while the car was parked. Repairs done by authorized Lexus shop.
*Small scratch on the back driver's side door -- surface scratch
*Small beginning of a crack in leather on arm rest/storage bin between seats.
12-29-15, 05:48 PM
#2
Lexus Fanatic
What are your goals? Do you want to buy the car out? If you want to buy the car out? What you need to do is find financing for the residual buyout price. How bad is your credit?
I would call Lexus financial, tell them you want to buy the car out and see what they can do for you.
Your other options are to turn it in, or trade it in. If you turn it in you will owe excess mileage, .25 a mile ($3,750). If you trade it in, you need to get the residual amount in the payoff.
I would call Lexus financial, tell them you want to buy the car out and see what they can do for you.
Your other options are to turn it in, or trade it in. If you turn it in you will owe excess mileage, .25 a mile ($3,750). If you trade it in, you need to get the residual amount in the payoff.
12-29-15, 06:46 PM
#3
Lexus Fanatic
Welcome to CL. 
I agree with SW15LS. If you want the car (or can live with it in the condition it is in) talk to the dealer and/or Lexus Financial about a buyout at the end of the lease term and see what figures they come up with. That way, wear-and-tear issues won't matter....the car will be yours, lock, stock, and barrel (or the bank's, if you have to re-finance the balance and not pay it all off). The dealership won't have to deal with the scratches, excess mileage, cracked leather, or diminished value from being in two accidents...that will be your problem once it's yours, and the dealership shouldn't have to charge you for them.
One thing that might (?) help with the small surface scratch you mentioned (I've had lot of good luck with it) is SCRATCH-OUT liquid scratch-remover. It won't get out stuff that goes deep into the clearcoat, but works very well on surface crutches, scuffs, stains, blotches, etc....
Make sure, though, that you use the scratch-remover and not the SCRATCH-OUT rubbing-compound.
I agree with SW15LS. If you want the car (or can live with it in the condition it is in) talk to the dealer and/or Lexus Financial about a buyout at the end of the lease term and see what figures they come up with. That way, wear-and-tear issues won't matter....the car will be yours, lock, stock, and barrel (or the bank's, if you have to re-finance the balance and not pay it all off). The dealership won't have to deal with the scratches, excess mileage, cracked leather, or diminished value from being in two accidents...that will be your problem once it's yours, and the dealership shouldn't have to charge you for them.
One thing that might (?) help with the small surface scratch you mentioned (I've had lot of good luck with it) is SCRATCH-OUT liquid scratch-remover. It won't get out stuff that goes deep into the clearcoat, but works very well on surface crutches, scuffs, stains, blotches, etc....
Make sure, though, that you use the scratch-remover and not the SCRATCH-OUT rubbing-compound.
Last edited by mmarshall; 12-29-15 at 06:49 PM.
12-29-15, 08:01 PM
#4
Lexus Fanatic
One thing to be sure you understand though, LFS will NOT under any circumstances negotiate the residual if you buy it out. It is what it is.
12-30-15, 12:26 AM
#5
Lexus Test Driver
I'd buyout the car and keep it. It is still very fresh and modern, with a high amount of life left in it.
Rest assure, no dealer will truly forgive over-mileage. They may say they are, but you won't get as good of a deal over the next vehicle. The demerits roll into something, whether they admit it to you or not.
Rest assure, no dealer will truly forgive over-mileage. They may say they are, but you won't get as good of a deal over the next vehicle. The demerits roll into something, whether they admit it to you or not.
12-30-15, 04:42 AM
#6
Lexus Test Driver
Why is this a "downer?":
Your car is under warranty; the leather shouldn't "crack" within 3 years. Take it back to the dealer and make them replace it under warranty. They might resist at first, but you tell them this is a Lexus with high quality leather, and it should not crack in that period of time. I've had this done 2x under warranty on an Acura and a Honda.
Your car is under warranty; the leather shouldn't "crack" within 3 years. Take it back to the dealer and make them replace it under warranty. They might resist at first, but you tell them this is a Lexus with high quality leather, and it should not crack in that period of time. I've had this done 2x under warranty on an Acura and a Honda.
12-30-15, 04:43 AM
#7
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12-30-15, 10:42 AM
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Residual value / true market value
I've read about that rule being strictly followed. When I was researching that, I read something saying that "if a car's true value is equal to or exceeds it's residual value that it's best to use the vehicle as a trade-in. This keeps you from paying the termination fee and eliminates any wear and tear charges." I looked at my lease agreement and the residual value is 31,897 and the true market value (according to Edmunds) is 36,229. I think I should get my car actually evaluated by a shop to see what the true value is. But if it is indeed over the residual value, does that give me more room to negotiate?
12-30-15, 10:51 AM
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Not sure what I want yet, depends on my options (if any)
What are your goals? Do you want to buy the car out? If you want to buy the car out? What you need to do is find financing for the residual buyout price. How bad is your credit?
I would call Lexus financial, tell them you want to buy the car out and see what they can do for you.
Your other options are to turn it in, or trade it in. If you turn it in you will owe excess mileage, .25 a mile ($3,750). If you trade it in, you need to get the residual amount in the payoff.
I would call Lexus financial, tell them you want to buy the car out and see what they can do for you.
Your other options are to turn it in, or trade it in. If you turn it in you will owe excess mileage, .25 a mile ($3,750). If you trade it in, you need to get the residual amount in the payoff.
I need to get my car looked at by a shop to get the actual true market value but I did an inquiry on Edmunds and they estimated it at $36,229 and the lease says the residual value is $31,897. I replied to a thread earlier asking if this would give me any negotiating room. Do you think it would?
I'm pulling my credit reports later today to see how bad it is.
12-30-15, 10:53 AM
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Size of cracked leather ?
Why is this a "downer?":
Your car is under warranty; the leather shouldn't "crack" within 3 years. Take it back to the dealer and make them replace it under warranty. They might resist at first, but you tell them this is a Lexus with high quality leather, and it should not crack in that period of time. I've had this done 2x under warranty on an Acura and a Honda.
Your car is under warranty; the leather shouldn't "crack" within 3 years. Take it back to the dealer and make them replace it under warranty. They might resist at first, but you tell them this is a Lexus with high quality leather, and it should not crack in that period of time. I've had this done 2x under warranty on an Acura and a Honda.
12-30-15, 11:00 AM
#11
Lexus Fanatic
Sorry...perhaps I wasn't clear. I do like the brand......SCRATCH OUT makes both a regular scratch remover and a much more harsh rubbing compound, which is not suitable for light scratches. My intention was to recommend the regular scratch-remover, because it comes in the same yellow color and style bottle as the rubbing compound...they could be confused if you don't look closely.
12-30-15, 11:03 AM
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Scratch Out
Sorry...perhaps I wasn't clear. I do like the brand......SCRATCH OUT makes both a regular scratch remover and a much more harsh rubbing compound, which is not suitable for light scratches. My intention was to recommend the regular scratch-remover, because it comes in the same yellow color and style bottle as the rubbing compound...they could be confused if you don't look closely.
12-30-15, 07:04 PM
#13
Lexus Test Driver
You are covered both ways--if it's normal wear and tear, then they shouldn't be able to ding you on the return; if it's more than normal wear and tear, then unless you did something to cause a crack in the leather, the warranty should cover it.
12-31-15, 05:41 AM
#14
Lexus Fanatic
Originally Posted by tozdc21
I've read about that rule being strictly followed. When I was researching that, I read something saying that "if a car's true value is equal to or exceeds it's residual value that it's best to use the vehicle as a trade-in. This keeps you from paying the termination fee and eliminates any wear and tear charges." I looked at my lease agreement and the residual value is 31,897 and the true market value (according to Edmunds) is 36,229. I think I should get my car actually evaluated by a shop to see what the true value is. But if it is indeed over the residual value, does that give me more room to negotiate?
01-02-16, 01:33 PM
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I just did some more research with different sites and got this info below. The residual value is 31,897.50. All of the estimates I found online are less than that. Does this 'help' me negotiating an exchange on a new lease?
Edmunds
*trade in - 26,691
*dealer retail - 30,554
*private party - 28,833
KBB -- 25,528
Edmunds
*trade in - 26,691
*dealer retail - 30,554
*private party - 28,833
KBB -- 25,528