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NFT: End of Lease Advice

Kanavis : 5/24/2022 2:00 pm
I reached the end of my lease in April and extended for 6 months thinking I would buy a new car but wait a bit for the shortage to improve. I don't love my leased car, but it only has 20K miles on it for a 36K lease.

However, I have been to about 3 dealerships so far. Twice I went in and couldn't get anyone's attention and stood there for 20 minutes before leaving. Another dealer told me they had the car on the lot but then did not when I got there. Further, they didn't even have a similar model for me to test drive.

I am thinking of just buying the leased car (I think it gets valued as a trade in at 6-8 K above the buyout price). I am not happy with the car, but it holds value well and the thought of buying a car in this environment is discouraging. I had thought the shortage would be over in a few months. Now...not so sure....thoughts? Thanks!
You Have Until October  
HMunster : 5/24/2022 2:03 pm : link
Why make the decision now?

One of our leases ends next month and we also extended until Christmas. Things may change for the better by then.
RE: You Have Until October  
Kanavis : 5/24/2022 2:09 pm : link
In comment 15717322 HMunster said:
Quote:
Why make the decision now?

One of our leases ends next month and we also extended until Christmas. Things may change for the better by then.


That was my thought as well. But from what I have read, I am not sure anything will be that much better in October. Further, some dealerships have realized that they like forcing customers to order rather than keeping inventory. I guess I thought that if I buy the leased car, I can just be patient and then trade it in when things do improve. If I knew the experience would be better in October, I would simply wait. But if it isn't, I wouldn't want to buy the leased car then after paying 4 more months of payments without reducing the residual price.

Funny that in my last experience, my biggest fear was salespeople hounding me for weeks after a test drive!
Buy it and then sell it for a profit if/when you find something  
Lafferty, Daniel : 5/24/2022 2:46 pm : link
better?
Seems like you will make $$$ based on the residual value you got on the vehicle a few years ago when the market was much different.
Supply and demand - you are in an advantageous position regardless of if you love the car or not.
Risky to think used car prices will stay inflated.  
johnnyb : 5/24/2022 3:06 pm : link
Prices have already come down. I would buy the car off the lease and hold until the environment improves. Don't count on making a profit from the car in the future. Once new cars begin to come on line, used car prices will fall. Supply and demand.
But he can make a profit now.  
Lafferty, Daniel : 5/24/2022 3:19 pm : link
his residual value is $6-8k less than the KBB value.
So instead of trading it in to the dealer -- buy the car and then sell it. Then you take that profit and go get a new car.
Extending the lease is a tricky proposition because  
Lafferty, Daniel : 5/24/2022 3:21 pm : link
a lot of car companies do not lower the residual value on the lease extension even after the additional payments have been made and the car has 6 more months of depreciation. So you will end up paying more for 6 months and the buyout price does not change.
If you're going to buy it out - do so now instead of extending the lease.
RE: But he can make a profit now.  
Steve L : 5/24/2022 6:11 pm : link
In comment 15717404 Lafferty, Daniel said:
Quote:
his residual value is $6-8k less than the KBB value.
So instead of trading it in to the dealer -- buy the car and then sell it. Then you take that profit and go get a new car.


Doesn’t matter when there isn’t anything to buy.

I work at a Chevy dealership. We are being told customers will be ordering cars and waiting 4-12 weeks for them until mid 2023 at least.

Extend your lease as long as you can. Order a car and you’ll have deal with the increase in cost. It’s unfortunate but it is what it is.
RE: Extending the lease is a tricky proposition because  
Steve L : 5/24/2022 6:16 pm : link
In comment 15717406 Lafferty, Daniel said:
Quote:
a lot of car companies do not lower the residual value on the lease extension even after the additional payments have been made and the car has 6 more months of depreciation. So you will end up paying more for 6 months and the buyout price does not change.
If you're going to buy it out - do so now instead of extending the lease.


THIS

If you’re going to buy the car, it doesn’t matter when you do it as long as the lease is up. Residual doesn’t change. Once you extend the lease, NYS adds additional tax so be prepared for that.
I negotiated  
JoeyBigBlue : 5/24/2022 6:19 pm : link
My last lease over emails with the sales department. Just use leasehackr to guide you and how to calculate the payments.
Buy it out  
UConn4523 : 5/24/2022 10:54 pm : link
not liking it is irrelevant at this point. It’s value is higher than your buyout and whatever you try to lease or buy right now will be over priced.

Buy it and wait for a good opportunity to trade it in for something you want. Only good option IMO.
RE: RE: But he can make a profit now.  
Kev in Cali : 5/25/2022 12:22 am : link
In comment 15717530 Steve L said:
Quote:
In comment 15717404 Lafferty, Daniel said:


Quote:


his residual value is $6-8k less than the KBB value.
So instead of trading it in to the dealer -- buy the car and then sell it. Then you take that profit and go get a new car.



Doesn’t matter when there isn’t anything to buy.

I work at a Chevy dealership. We are being told customers will be ordering cars and waiting 4-12 weeks for them until mid 2023 at least.

Extend your lease as long as you can. Order a car and you’ll have deal with the increase in cost. It’s unfortunate but it is what it is.


Went in to my honda service last week....Walked around and had nothing on the showroom. Chatted with a sales guy where he said they only had 1 new vehicle on the lot (Pilot).....the trucks coming in delivering...80% already sold, what's left over, sells in 1-2 weeks. BMW similar scenario.

I shopped around the Tesla website, earliest delivery was around April-June 2023.

Slim picking in the new car market unless one wants to wait for an order. I'd buy out and then drive it till ya find the car ya really want (test drive the shit out of them), then trade in. I wouldn't expect any great deals in this market, though they can be had if one haggles enough.

Tough call for the OP. Good luck.
Thanks everyone....  
Kanavis : 5/25/2022 8:37 am : link
Great advice as always. Will buyout and wait.
I factory  
pjcas18 : 5/25/2022 9:05 am : link
ordered my truck - took 12 weeks or so, but I got exactly what I want and b/c I factory ordered it I got many more incentives (0% financing - I wasn't planning to finance it at all, but 0% financing made we reconsider and hold on to some cash), plus extended warranty and some other minor enhancements.

just something to keep in mind.

I wouldn't buy a car I didn't like just because it appreciated in value unless I had no other options.
Buying it off lease is the kicker though  
UConn4523 : 5/25/2022 9:25 am : link
he’s already “owned” it paying down the car and all that money is gone if returned. Then you have to find another car and pay a premium for it - that’s 2 shitty scenarios.

How bad can the car be? If it runs well and you just don’t like it it’s just a numbers game IMO - buy it and pocket value you established and trade it in for something you really want when the timing is right.
Like everything in this economy,  
Kmed6000 : 5/25/2022 9:36 am : link
the automotive market is pure dogshit. You can buy it out and wait for something, but by the time something pops up at a reasonable price, the value of your car will have gone down.

Nobody has inventory and from what I am seeing and hearing(I'm in the business), it's not expected to correct anytime soon. In fact, the recession thats on the horizon will probably only extend it as nobody is making enough cars to bring the supply up.

I'm in a similar situation, just without the value on my leased car(infiniti's never hold their value well).
It's an Impreza.  
Kanavis : 5/25/2022 10:15 am : link
Nothing fancy but has some good options... eyesight...and has low miles no accidents. The buy out is 14k. So even if I don't get today's crazy trade ins...I should still be OK.

I would like to just order a new car and wait...but I have heard some of the wait times can extend fairly long. Further, once you give a deposit, the dealer has even more leverage. How do I know what they will offer for a trade once the car comes in? Plus...it's hard to even arrange a test drive right now. Terrible market for buyers.
THis is not going to correct because automakers  
Essex : 5/25/2022 10:34 am : link
are now seeing in real time the value in producing less cars. Of course, assuming there is no collussion, one of the market actors will start producing more and offering discounts etc, which will have a domino effect, but I don't think the car companies are really in a rush to do that at the moment.
RE: It's an Impreza.  
Steve L : 5/25/2022 10:47 am : link
In comment 15717929 Kanavis said:
Quote:
Nothing fancy but has some good options... eyesight...and has low miles no accidents. The buy out is 14k. So even if I don't get today's crazy trade ins...I should still be OK.

I would like to just order a new car and wait...but I have heard some of the wait times can extend fairly long. Further, once you give a deposit, the dealer has even more leverage. How do I know what they will offer for a trade once the car comes in? Plus...it's hard to even arrange a test drive right now. Terrible market for buyers.


I have customers test drive newer used models so they can at least get a sense of the size and features. It’s not ideal but it helps.

I don’t know how other dealerships are doing deposits, but ours are 100% refundable. You’re back to square one, but you have your $500. Depending on the car, GMs wait times are 4-12 weeks depending on the model. It’s not terrible. Sometimes you’re not even ordering a car. If you can deal with a popular model with packages you like, the dealership may already have some on order to cut your wait time.
My wait time  
pjcas18 : 5/25/2022 10:51 am : link
was 12 weeks (June 1 2021 - September 1 2021 - basically)

I don't think the dealership had any leverage for 2 reasons:

1. My deposit was $500 and while I'm not some kind of Rockefeller, I'm also not making decisions to avoid losing $500 if it came to it

2. I ordered the vehicle to spec, who is to say the way I wanted it configured is how anyone else does - I didn't get some wacky color or unique stuff, but it definitely wasn't a standard bland generic version either

Ordering a car adds its own risks.  
Kmed6000 : 5/25/2022 10:52 am : link
First off, some cars are taking about 3/4 months at best, but I've heard stories of cars taking 2 years. There is no way to know the value of the trade in until the new car comes in. They certainly aren't going to quote you a price and then honor that price 6 months later.

In fact, dealers may even tell you that they "lock in" the price of the new car based on todays incentives, but they are lying. Very few manufacturers will lock in prices depending on todays rates and incentives so you run the risk of the programs getting even worse.
Any dealer not giving back deposits are pieces of shit  
Kmed6000 : 5/25/2022 10:53 am : link
because they will have 0 issue selling that car. People are desperate and will take anything at this point.
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