Wh0pp3r

So I'm close the end of my lease (2015 Lexus RC F-sport), Ive checked buy out pricing and its just under 39k last i checked LFS.com, MSRP was just above 50k, total payments under the lease will be shy of 7200, total down 1500.00 when i got the car, currently just under 7k miles. I was also told that I could take the car to another dealer or Carmax, have them appraise it, and use that towards buying a car. I don't understand how that works, hoping for some clarification.

For example, say I went in to Carmax, appraised say 35k, and found a car, valued on the lot at 22k, big difference between the 2, but my lease value is higher. how does that work out?

second scenario is say i find a car valued on the lot for 53k, big difference in pricing, this time the lot vehicle has the higher value, how does that work?

third scenario is i find a vehicle of equal value, what happens then?

Im not delusional that I'm not gonna end up paying something, the house always wins one way or another, I'm just trying to understand how this all works.



pretty much what I'm wondering is if this is true, that I can take a leased vehicle and for the lack of a better term on my end, use it as "credit" towards another car, how do they determine what said "credit" amount is.

I am happy to answer whatever questions I can.

JDR76

It works the same as trading in a financed car that still has a balance owed.

If your LFS buy out is $39k, you would need CarMax to offer at least that much. If they value the trade at $35k, you would need to come up with $4k to close the deal.

If your buy out was less, say $30k, and they offered you $35k on the trade in value, you could then use that $5k to line your pockets or put down toward the next car.

Hope that makes sense.

Wh0pp3r

ahh ok. that actually makes a lot of sense. thank you!

GoHuskers

Yep. It works exactly like @JDR76 said above.

Wh0pp3r

So this could actually benefit me in the sense that if my car is apprised higher than its pay off worth, i may be able to increase the down payment on a car i actually want... interesting. thank you guys!

pbm317

That would be true, but in these days, that's almost never the case. The automakers are using huge incentives to inflate the lease residual to hit the lower competitive monthly payment, and so the true market value is almost always lower than the lease end residual.

FastFord

Done exactly that many times. I never get close to the maximum allowed mileage, and car is always spotless and in excellent condition when I go to trade it in. Most places will take a lease anytime, but doing it just before the lease ends (1-4 months) will probably be more accurate as to the cars value. Lexus has very low residual values. They are much more cautious on a vehicles value after 3,4 years. Therefore getting more for it on a trade than the book value is common for Lexus.

JDR76

I've been 'positive' at trade in time on my last three leases (Tacoma, RX, IS) which makes the process pretty easy. I do not think I'll end up positive on my GS though. That will be a different process though, as I'm thinking I may buy it out and keep it. Never loved a car like I do my GS.

We also currently lease a Highlander Hybrid and I'm quite certain we'll come out positive on that one as well, though my wife wants to buy it out of the lease.

coolsaber

Simple, you compare your trade in value to your LFS buyout value as others have said. The RC- F sport will most likely be a vehicle that LFS buyout will be higher then what carmax will offer (dealers dont want the vehicle and basically 3rd party dealers dont want to invest in the RC-F Sport until later down the pipeline when similar competitors are down in the depreciation dumps), so essentially your in the hypothetical negative (at least until you get the CarMax appraisal that says otherwise). However since its a lease your not in the real negative since LFS will absorb the difference upon lease return. If you like the vehicle buy it out, if not see if getting into a new lease on a Lexus or competitor will yield any "positive" returns from the current lease.

Positive equity is what your looking for in a lease, is when the Lease Buyout (which is basically a hypothetical educated guess of how much a vehicle is worth after lease term) is less then the appraisal value at the end of term. You roll positive equity into a new or used purchase without having to pay any taxes (differs state to state).

Negative equity is the opposite, and while you can roll into this into your next lease, usually a bad idea all around.

Finally since your essentially pay-per-using the RC-F Sport you cant roll anything towards a another purchase. You can purchase the vehicle at least end, then sell the now purchased vehicle at carmax. However in a negative equity situation where you are leasing, and you dont really care for the vehicle, RETURN AND RUN. Its probably cheaper to lease a new model then buyout.

pbm317

Historically yes, but Lexus is not immune to the pressures of the market, as JDR76 is experiencing. There were some crazy aggressive GS lease programs with this generation, and the market has taken a quick turn, especially for that segment.

Wh0pp3r

So then my next question is, does it do me any harm in taking the car for appraisal at carmax? will finding out if i have positive equity hurt me or help me with dealer? having them make the inquiry on the information needed on the vehicle, will it hurt me with the dealer?

coolsaber

Appraisals are not going to hurt you with LFS. I dont know how LFS and dealers operate in regards to negotiating buyouts. Certain brands will negotiate with you for the heck of having one less car at the end of lease return. Doesnt hurt to try and negotiate a better deal and do your due diligence.

JDR76

LFS will not negotiate the buy out.

Wh0pp3r

doing so now. since Carmax is "no haggle" i think i might have to take them the car and appraise it. If i get positive equity ill take the money and run to somewhere where i can do some haggling.

well there goes part of my plan. aha. would you say it benefits me to do the appraisal on the final month once my final payment is done or do it now? or hold off on final payment, appraise and go from there?current buyout according to my LFS is 39,200, minus 3 payments title be around 38,500ish I'm estimating.