sherizel

I have a 2013 ES 350. The dealer called today and said they want my car because it has great resale value. I'm only 14 months in to a 48 month lease. The dealer said I can get a 2014 model, same features and my payments will not increase and they may even decrease.

What is the catch here? Other than extending my lease an additional 4 years, is there any downside to this? My insurance may go up a bit. That's the only thing I can think of.

What red flags should I be looking out for?

Thanks

Dave Mac

What the dealer really wants is to lease you another car and this is just his/her way of trying for a deal. But if you are interested go ahead and see what they are offering but be prepared to walk when the deal is anything other than what he told you - no increase or slight decrease in your lease payment for the exact same car if that is what you want. If you make any change to what you are leasing that is when they can cloud the deal - not unlike a bait-and-switch. Insurance difference will be minimal.

Dave Mac

gmanusmc

Agree with DaveMac - this is just a sales ploy dealers use to create business - unless there was a pretty good down payment on the original lease, there will probably be some negative equity going into the new lease - be very careful.

Bill G

lesz

Adding to what the others have said, the "because we are experiencing especially high demand for the vehicle you are currently driving, we are prepared to offer special pricing or lease terms if you trade in your vehicle now" pitch has become an especially popular sales pitch that dealers are using, but the bottom line is that it is just that, a sales pitch, and, one way or another, the terms will be such that you will be paying for a year's worth of depreciation if you move from a 2013 ES to a similarly equipped 2014 ES. Since a lease deal is based on so many more factors than is a straight cash sale, it is much easier for the dealer to obscure the depreciation cost that you are paying than would be the case if you were trading in the 2013 for a 2014 in a cash purchase for the 2014, but, be assured that you will be paying for that depreciation. Also be assured that the dealer is making similar offers because of alleged "high demand" to owners of virtually every possible vehicle on the road today, and the offer is likely worth considering only if you otherwise would have been inclined to consider trading in your one year old vehicle for a similarly equipped new vehicle.

LexBob2

I agree that it's basically a sales pitch. ES sales were -3% for June and -1% year to date, so they are probably trying to drum up some business. I get these types of mailings from time to time.

wasjr

While this is obviously a sales pitch, what can make this work for you (assuming you paid nothing down on the front end of your current lease) is that, per Edmunds, there are factory incentives for 2014 ES leases of $1,000 bonus cash and they pay the first months payment. There is .9% financing on purchases, so the money factor on leases may be lower than what is in your lease. Additionally, the dealer may be close to the next tier sales for additional factory compensation. These factors may not have been available when you initiated your current lease. The downside is you will be locked into the vehicle longer, if your plan was to move on at the end of your lease term.

However, you still need to negotiate the capitalized cost (purchase price) of the vehicle, considering you will get the $1,000 off; and get the dealer to just release you from your current lease (this may be more complicated if you made a substantial down payment on the front end).

I have a buddy that leases an Acura MDX for business, puts no money down, goes over the allotted miles, and trades in his vehicle in year two of a three year lease (at the model change when there are incentives to move the vehicles) for a new lease at the same or less monthly payment. In his case the high resale value and the new vehicle incentives allow him to do this.

Bbyboomer

I assume ALL sales people are the most honest on EARTH..............sure, right ! IF it sounds too good to be true...it probably is. He/she's in business for one thing,nothing more.Put it all down on paper...it's the only way.You have to see the hard figures in front of you,not rolling off the silver tongue of a salesman.