alir1983

Hi,

I'm looking to turn in my 2015 ES 350 lease early. My dealership said they won't soak up all 13 months of payments but can possibly do half. But only if I get the next car from them is the only way that deal will go through. Just to add, I already am over my mileage by 500 miles so that puts me at 30,500. I have a baby on the way and I wanted to get out of a car and get into a SUV. RX350 leg room is not enough and the GX is a V8 which will not be so economical for my everyday use.

1) Should I just pay remainder of the payments and exit Lexus and get another type of SUV?
2) Stick to Lexus, take the deal for early lease turn in to get into a Rx350 or GX from the same dealer?

Do you guys have any suggestions or thoughts? Please share your experience as well.

SW17LS

You need to call LFS or go online and get your lease payoff. Then get a trade in quote for the car, see how upside down you are. If the dealer is doing it as a turn in they're doing it wrong.

Share re the numbers with us here and we can advise you better.

alir1983

My lease pay-off is $5741.

RXGS

iTrader: (2)

Try swaplease?

alir1983

There is a massive Lexus dealer near where I reside and they are offering a lower monthly payment for a newer model. In that case, swapalease is not working out. I've went up to offering 2k cash incentives. I'm already over my mileage by 500 and if I wait another year i'll be having to pay that overage of about 10k + the full year's payment. I rather turn it in now and not have to pay for overage and get into a SUV.

SW17LS

No it's not. You need to know the total payoff, including the residual. So what dollar figure would buy the car from Lexus, this is what you need to compare to a trade value. Think of it as trading in a car you have a loan on, you need to know the full payoff.

Also, if you trade the car in vs turn it in you don't have to pay any mileage overages.

For instance the payoff on my LS right now is about $56,000. So if I wanted to trade it in and walk away from it somebody would have to buy it from me for $56,000.

And please do not negotiate leases using the monthly payment. You need to negotiate all the terms, purchase price, money factor, drive off or wrapped in costs. The low payment comes from those things, if you just negotiate the payment the dealer is going to pad the deal with profit and screw you.

Maikerusan

Best advice of the year. Dealerships love clients who only want to talk or negotiate monthly payments.

alir1983

My end of lease buyout price is about 27800 and I owe 5741 till end of lease. Adding that both together should be my buy out price.

Here is the response I got back from the dealer. "The lease car is $10,000 under if we took it as a trade, it is leased not owned. The payments of 12 payments left of $440.15 would be is -$5281.8."

SW17LS

It's a little less than that because you save some interest cost.

So you essentially need $33k in trade in order to be traded out of it whole. What he's trying to tell you is if they took it on trade you'd be $10,000 upside down, in other words he can only give you $23k so it's cheaper to turn it in early and pay off the lease.

gmanusmc

You're right Steve, but it sure doesn't make sense to pay for the remaining mileage and then give the car up - if he's gonna pay the remaining payments, might as well keep the vehicle and drive the remaining miles that were just paid for.

SW17LS

Normally I would agree 100%, but he's out of miles. So he's paying .25c a mile for every mile he drives it now. It's possible when he gets to the end he may be able to trade out of the car and get out of the mileage penalty, but he may be better off to swallow his losses now depending on how much he anticipates driving it in the upcoming year.

gmanusmc

Whoops - I misunderstood - thought he meant he was only 500 miles over based on where he is on the lease now. Yes if he's projecting between 15-20k miles over at end of lease, it's gonna cost $4-5k no matter how ya look at it.

SW17LS

500 miles over now, but another year to go. Yep, exactly. If he's going to pay $4-5k anyways he may as well do it now, get the vehicle he wants (with the right amount of mileage for his needs)

lesz

I just did a quick calculation that shows something about how costly, with a lease, it can be to misjudge how many miles you will be driving during the course of the lease.

If you owned a 2-4 year old ES, that car's trade-in/resale value would diminish by about $900 for every additional 10,000 miles you put on the odometer. With a lease, if you drive 10,000 miles more than you had available on the lease, it will cost you $2500 more at the end of the lease.

Thus, if you drive, say, 15,000 miles more than a lease allows, the cost of those extra miles ends up being the equivalent of having paid close to $2500 more for the car than you thought you were paying for the car unless you trade in the car and avoid the excess mileage charge, instead of turning it in and paying the excess mileage charge at the end of the lease. But, even if you do trade in the car, realizing any cost savings assumes that the dealer is going to give you fair trade-in value.

I'll bet that the manufacturers make a good amount of additional profit from people who significantly underestimate how much they are going to drive a car during the course of a lease.

SW17LS

Remember though, you can trade our at the end, so if you can get the residual you won't owe any mileage penalties. Even if you can't quite get the residual the negative equity may be less than the mileage penalty.