So your lease is almost over - well, congratulations, because that baby looks like a perfect fit for your garage. Just like buying a used car, there is some research to be done to nail a good deal.
First, you need to know the cost of buying out your lease. The purchase option price is something you want to look for, and you want to make sure you comb through all the mumbo-jumbo they call fine print in layman's terms. Simply add up the residual value of your car to the purchase-option fee dictated by the dealer (this usually costs a few hundred smackeroos) and you get the above price. Think back to the time you put your John Hancock to paper and started the lease - your monthly payments would have been the difference between a) the sticker price at the start of the lease and b) the vehicle's estimated value at the lease's expiration plus c) a monthly financing fee.
This estimated price of the car value at the end of the lease is what is termed in leasing jargon "residual value". It is the expected depreciation - or loss in value - of the vehicle over the scheduled-lease period. For example, a car with a sticker price of $40,000 and a 50% residual percentage will have an estimated $20,000 value at lease end.
So all right, you now know how much it would cost to buy out your lease, so your next mission, should you decide to accept it, is to find out how much is the actual, or market value of the vehicle. So, how much does your car retail for in the market? To get a nice, round estimate of this cost, what you'll need to do is - you guessed it right, research. Check the price of the vehicle, with similar mileage and condition, with different dealers. Your most useful tools would be automotive pricing websites, including the reputable Edmunds.com, Cars.com and Kelly Blue Book.
Gleaning pricing information from various sources should give you a fair estimate of your vehicle's retail value. So stack up the two amounts and see which is lower. If you have a lower residual value than actual retail value, then congratulations, compadre, you've got a great deal! Unfortunately, there is a good chance a car coming off a lease is a little on the high side. Worry not, my friends. Why so, because leasing firms are well-informed about the fact that residual values will be, in most, if not all cases, greater than the market value, and will always be looking for a good offer. It's easy to bargain for a lower price on your leased car - be Mr. Suave, or Ms. Suave, and come up with a negotiation strategy that you know would work. And once you think the leasing company isn't looking, then hit 'em where it doesn't hurt (your budget) - give them a price lower than your target and go for the best deal!
First, you need to know the cost of buying out your lease. The purchase option price is something you want to look for, and you want to make sure you comb through all the mumbo-jumbo they call fine print in layman's terms. Simply add up the residual value of your car to the purchase-option fee dictated by the dealer (this usually costs a few hundred smackeroos) and you get the above price. Think back to the time you put your John Hancock to paper and started the lease - your monthly payments would have been the difference between a) the sticker price at the start of the lease and b) the vehicle's estimated value at the lease's expiration plus c) a monthly financing fee.
This estimated price of the car value at the end of the lease is what is termed in leasing jargon "residual value". It is the expected depreciation - or loss in value - of the vehicle over the scheduled-lease period. For example, a car with a sticker price of $40,000 and a 50% residual percentage will have an estimated $20,000 value at lease end.
So all right, you now know how much it would cost to buy out your lease, so your next mission, should you decide to accept it, is to find out how much is the actual, or market value of the vehicle. So, how much does your car retail for in the market? To get a nice, round estimate of this cost, what you'll need to do is - you guessed it right, research. Check the price of the vehicle, with similar mileage and condition, with different dealers. Your most useful tools would be automotive pricing websites, including the reputable Edmunds.com, Cars.com and Kelly Blue Book.
Gleaning pricing information from various sources should give you a fair estimate of your vehicle's retail value. So stack up the two amounts and see which is lower. If you have a lower residual value than actual retail value, then congratulations, compadre, you've got a great deal! Unfortunately, there is a good chance a car coming off a lease is a little on the high side. Worry not, my friends. Why so, because leasing firms are well-informed about the fact that residual values will be, in most, if not all cases, greater than the market value, and will always be looking for a good offer. It's easy to bargain for a lower price on your leased car - be Mr. Suave, or Ms. Suave, and come up with a negotiation strategy that you know would work. And once you think the leasing company isn't looking, then hit 'em where it doesn't hurt (your budget) - give them a price lower than your target and go for the best deal!
About the Author:
Our Winston Salem car garage provide a comprehensive range of services for most vehicles.