Car Lease Is UP...

[3happydancers]

I'm not a fan of leasing but we were in a pinch 3 years ago and leasing gave us the best monthly payment. Well, our lease is up at the end of April. We have a2011 Toyota Rav-Base model. It only has 11,000 miles on it. I tried looking the value up on Kelly BB and Edmunds but I don't see prices for base models (to get an idea on whether or not the car has equity). If the car has equity, I could turn it over into another vehicle as dp. Anyhow, DH and I went into Toyota to discuss options, (IE-purchasing the vehicle, which does not seem cost effective). Toyota says the car has 0.00 equity. I'm not sure but I feel as though they are playing hard ball. How is the best way to negotiate? The car is in excellent condition and like I said, only 11,000 miles on the 3 year old vehicle.

We've been doing a bit of research and getting used car loan rates. The lowest we found was 1.99% which makes it very affordable to purchase our lease. I think this is the route we are going to take especially given that we know the history of the car, it has extremely low mileage, and if we decided to sell privately, we could sell it for more than the loan is. Just wanted to say thanks for all your input. You have been very helpful and played an active role helping with our decision!

 

[scrapquitler]

I'm not a fan of leasing but we were in a pinch 3 years ago and leasing gave us the best monthly payment. Well, our lease is up at the end of April. We have a2011 Toyota Rav-Base model. It only has 11,000 miles on it. I tried looking the value up on Kelly BB and Edmunds but I don't see prices for base models (to get an idea on whether or not the car has equity). If the car has equity, I could turn it over into another vehicle as dp. Anyhow, DH and I went into Toyota to discuss options, (IE-purchasing the vehicle, which does not seem cost effective). Toyota says the car has 0.00 equity. I'm not sure but I feel as though they are playing hard ball. How is the best way to negotiate? The car is in excellent condition and like I said, only 11,000 miles on the 3 year old vehicle.

You've only put 11,000 miles on the car in three years? In your situation I would buy a moderately priced used car and drive and drive and drive for years.

 

[3happydancers]

You've only put 11,000 miles on the car in three years? In your situation I would buy a moderately priced used car and drive and drive and drive for years.

Yup, only 11,000. I work very close to home. So you think I should just turn this car in (by the way, they now charge a $350.00 fee which I did not know about, if you do not lease or purchase another car from the dealer), and buy a used car. Then should I just purchase this one, knowing what I have, even if it will ultimately cost a few thousand more than if I had just purchased it from the beginning?

 

[tvguy]

I'm confused, if you're leasing, you would never have equity in the car. You only have equity if you were buying it.
I went to KBB and it lists a base.
Carmax is selling a similar car for $19,599
http://www.carmax.com/enus/view-car...d-8564-c881064bd351&Ep=search:results:results page

I agree that you are an idea candidate for a $10,000 used car. You spend a whole lot of money for very few miles.

 

[supersnoop]

You only have equity if the car is worth more than the residual value stated on your lease contract. Look at your contract and see if you can sell the car for more than the buy-out. You did, however, state that it would not be cost effective to buy out the car, which makes me think that there is no equity.

 

[3happydancers]

I'm confused, if you're leasing, you would never have equity in the car. You only have equity if you were buying it.
I went to KBB and it lists a base.
Carmax is selling a similar car for $19,599
http://www.carmax.com/enus/view-car...d-8564-c881064bd351&Ep=search:results:results page

I agree that you are an idea candidate for a $10,000 used car. You spend a whole lot of money for very few miles.

When I spoke to Toyota Finance, they said if I am turning the vehicle over and it held value (which Toyotas usually does), that there may be equity. Just info told to me. I am not very smart when it comes to car purchases and haggling.

Do you think I should just buy the car I leased?

 

[3happydancers]

You only have equity if the car is worth more than the residual value stated on your lease contract. Look at your contract and see if you can sell the car for more than the buy-out. You did, however, state that it would not be cost effective to buy out the car, which makes me think that there is no equity.

My contract says the buy out is about 15,400.00. Toyota was the one who said the car had 0.00 equity. Do I believe them?

 

[3happydancers]

I'm confused, if you're leasing, you would never have equity in the car. You only have equity if you were buying it.
I went to KBB and it lists a base.
Carmax is selling a similar car for $19,599
http://www.carmax.com/enus/view-car...d-8564-c881064bd351&Ep=search:results:results page

I agree that you are an idea candidate for a $10,000 used car. You spend a whole lot of money for very few miles.

I could not find the base on Kelly BB??? And if I turn the car in to Toyota, of course they will want to make $$$ turning it over; the car will sell quickly with only 11,000 miles on it.

 

[jcano]

A lease is basically renting a car long term. There is no equity built up and the lease contract spells all the terms out up front. You have no bargaining position.
Another vote for a used car next time around.

 

[wiigirl]

A lease is basically renting a car long term. There is no equity built up and the lease contract spells all the terms out up front. You have no bargaining position.
Another vote for a used car next time around.

 

[3happydancers]

A lease is basically renting a car long term. There is no equity built up and the lease contract spells all the terms out up front. You have no bargaining position.
Another vote for a used car next time around.

So, should I just buy this vehicle?

 

[disney1990]

I'm not a fan of leasing but we were in a pinch 3 years ago and leasing gave us the best monthly payment. Well, our lease is up at the end of April. We have a2011 Toyota Rav-Base model. It only has 11,000 miles on it. I tried looking the value up on Kelly BB and Edmunds but I don't see prices for base models (to get an idea on whether or not the car has equity). If the car has equity, I could turn it over into another vehicle as dp. Anyhow, DH and I went into Toyota to discuss options, (IE-purchasing the vehicle, which does not seem cost effective). Toyota says the car has 0.00 equity. I'm not sure but I feel as though they are playing hard ball. How is the best way to negotiate? The car is in excellent condition and like I said, only 11,000 miles on the 3 year old vehicle.

Unfortunately, Toyota now holds all the cards. Leasing a car is seldom a smart move. I agree that you should look for a good used car.

As somebody said, Carmax is selling this car for $19,599 and Toyota wants to sell it to you for $15,400. You know how you have taken care of it. Probably a good deal to go ahead and buy it.

 

[supersnoop]

A lease is more complicated than just "renting" a car. There's a company making a bet on what the car will be worth after XX months and YY miles. They've got a lot of historical data to make that bet. If they bet low, then they make more money over the term of the lease, but you'll have some equity when you go to turn it in. If they bet high, you save more money and they get stuck with a less valuable car than they expected.

In your case, it looks like you could sell your car for ~$16,000 yourself. The lease company has already agreed to a $15,400 price, which is what you'd owe if you purchased the car. You could try to sell it yourself to make that $600 difference. Since your trade-in value is probably closer to $14,000, the dealer won't give you any trade-in credit for buying another car.

Should you pay $15,400 for this car? If it's a good car and you like it and can afford it, sure. But, based on the mileage you've put on the car, you'd be better suited with a much less expensive used car.

 

[bumbershoot]

Yup, only 11,000. I work very close to home. So you think I should just turn this car in (by the way, they now charge a $350.00 fee which I did not know about, if you do not lease or purchase another car from the dealer)...

From my experience, they will almost certianly put that $350 into your lease somehow, and then if you lease another (not sure if that's an option but if it is) you will get to pay interest on it.

That $350 has got to be in your original lease paperwork.

I'm confused, if you're leasing, you would never have equity in the car. You only have equity if you were buying it.

Exactly.

They are calling it "equity" but that's not what it is. They are using easy words, when they really really just want you to turn it in, let them put that 350 into your new contract, and leave with another 3-4 year lease...

I am not very smart when it comes to car purchases and haggling.

Neither was I, it turned out. That's why I thought leasing was a good idea. It was not. They are sneaky, though it is, ultimately, all in the contract you signed. When I signed, I read through the thing! More than once. ANd still missed important stuff. How do I know I missed it? Because at the end when I was getting all those charges (after turning in a car and driving off in another 2 times...12 years of leasing in total), when I read through it as a 30 something instead of a 20-something, I found all that information.

So, should I just buy this vehicle?

You know the original user of the car. You know how it has been taken care of. You know how it uses gas, and all its quirks. Do you love the car? Do you want this car?

If so, do it.

I don't regret leasing, though the last 2 years I was unhappy, because it accomplished what I needed it to accomplish. But I DO regret not buying my first leased car. At the time I kept adding up what I had paid for the lease AND the cost they wanted (that I had agreed to in the paperwork when I first leased it) and thinking "I could do so much better". But I didnt, I kept on leasing.

The lease cost is the cost for using someone else's car for a certain amount of time. The price at the end is the price to buy a car that only you have driven and you know exactly how it has been treated. I have realized that that is a very valuable thing with cars.

(says the person who ended up having to buy a car very quickly, and could only get a car that had been a dealership's rental for 2 years, and despite being a very good vehicle, has cigarette burns in the seats and on very hot and very cold days still reeks of cigarettes from those 2 years, despite us owning it since 2007...it's good to know how your car has been used...)

 

[powellrj]

A few days ago there was a great thread on the community board that explained leasing that I had never heard before.

http://www.disboards.com/showthread.php?t=3234820&highlight=car+leasing

 

[ceecee]

That sounds like a good price for a 3 year old RAV, I would buy the one you have. We have been looking at RAVs and CR-Vs so that I can give DD who is just getting her license my CR-V. Used RAV and CR-Vs seem to hold their value, I didn't see anything close to $15,400 for a 3 yr old car with 11,00miles on it. That is why I am getting a new one and giving her mine.

Leasing usually doesn't give you equitity so I think it sounds like a fair deal, just don't lease again.

Off topic: How do you like the RAV??? I LOVE my CR-V but the new one is $4000 more than the RAV.

 

[Diabolicdesire]

If you decide not to keep the car you can avoid paying the 350.00 to turn it in by having someone else purchase the car. You may be able to even make some money off it as well if you find a buyer for more than your payoff amount. The one and only time I leased I sold the car for what was owed at the end of the lease. I knew I wasn't going to keep it so a friend of the family got an awesome price on a great car and I avoided having to pay to turn it in. It was a win/win for us both.

 

[3happydancers]

Unfortunately, Toyota now holds all the cards. Leasing a car is seldom a smart move. I agree that you should look for a good used car.

As somebody said, Carmax is selling this car for $19,599 and Toyota wants to sell it to you for $15,400. You know how you have taken care of it. Probably a good deal to go ahead and buy it.

DH thinks the same thing. We don't really like leasing either. At the time a few years back, it was our best option.

 

[3happydancers]

From my experience, they will almost certianly put that $350 into your lease somehow, and then if you lease another (not sure if that's an option but if it is) you will get to pay interest on it.

That $350 has got to be in your original lease paperwork.



Exactly.

They are calling it "equity" but that's not what it is. They are using easy words, when they really really just want you to turn it in, let them put that 350 into your new contract, and leave with another 3-4 year lease...



Neither was I, it turned out. That's why I thought leasing was a good idea. It was not. They are sneaky, though it is, ultimately, all in the contract you signed. When I signed, I read through the thing! More than once. ANd still missed important stuff. How do I know I missed it? Because at the end when I was getting all those charges (after turning in a car and driving off in another 2 times...12 years of leasing in total), when I read through it as a 30 something instead of a 20-something, I found all that information.



You know the original user of the car. You know how it has been taken care of. You know how it uses gas, and all its quirks. Do you love the car? Do you want this car?

If so, do it.

I don't regret leasing, though the last 2 years I was unhappy, because it accomplished what I needed it to accomplish. But I DO regret not buying my first leased car. At the time I kept adding up what I had paid for the lease AND the cost they wanted (that I had agreed to in the paperwork when I first leased it) and thinking "I could do so much better". But I didnt, I kept on leasing.

The lease cost is the cost for using someone else's car for a certain amount of time. The price at the end is the price to buy a car that only you have driven and you know exactly how it has been treated. I have realized that that is a very valuable thing with cars.

(says the person who ended up having to buy a car very quickly, and could only get a car that had been a dealership's rental for 2 years, and despite being a very good vehicle, has cigarette burns in the seats and on very hot and very cold days still reeks of cigarettes from those 2 years, despite us owning it since 2007...it's good to know how your car has been used...)

The $350 turn in fee will be waived if I either release or purchase this car. This fee was not factored into the price agreed upon. As for the car, DH and I are very happy with it, the mileage is very low, and we keep up with all the recommended services and oil changes. I think to buy someone else's used car may not be the best thing because we don't know how the car was maintained.

 

[3happydancers]

A lease is more complicated than just "renting" a car. There's a company making a bet on what the car will be worth after XX months and YY miles. They've got a lot of historical data to make that bet. If they bet low, then they make more money over the term of the lease, but you'll have some equity when you go to turn it in. If they bet high, you save more money and they get stuck with a less valuable car than they expected.

In your case, it looks like you could sell your car for ~$16,000 yourself. The lease company has already agreed to a $15,400 price, which is what you'd owe if you purchased the car. You could try to sell it yourself to make that $600 difference. Since your trade-in value is probably closer to $14,000, the dealer won't give you any trade-in credit for buying another car.

Should you pay $15,400 for this car? If it's a good car and you like it and can afford it, sure. But, based on the mileage you've put on the car, you'd be better suited with a much less expensive used car.

We could swing the car and even though you are probably right about buying a less expensive, used vehicle, at least I know my vehicle and that it has been maintained. So I might have to give in to DH and just purchase this one.