Taking over a lease

amother

Beige

Wed, Mar 17 2021, 9:29 am

amother [ Jade ] wrote:

The price of older used vans are close to 20k. The price of cars are crazy now
We are selling a really old high mileage mini van with accident damage and getting crazy offers.
It will also cost us a lot more to replace.

How old? How much mileage? When you say crazy, is it crazy low or crazy high?

amother

Seashell

Wed, Mar 17 2021, 9:35 am

I buy lease returns.
The benefit is the price is fixed in the lease contract from the beginning so if the market goes up, as it usually does, your getting a 3 year old car with relatively low mileage for a good price.
I usually only buy off the lease of people that I know personally and know they take care of their cars so I'm not getting something someone else abused and will have to put money into it.
The benefit of buying off the lease vs buying from a dealer after is the price. A dealer can charge whatever he chooses. Buying off the lease, the price is determined based on market value of the car at the time the lease is signed.
Today, for example, used Sienna are in high demand. You can buy off a lease for about 20k. If you go to dealer, he paid the 20k and then wants to make money off it so you will be paying closer to 25k.

amother

Beige

Wed, Mar 17 2021, 9:37 am

amother [ Smokey ] wrote:

firstly people turn back mileage so you have to risk that. My relative just asked for a buyout price for a car which he put (and paid for) a lot of extra miles had 3 year lease. The price was not more than 25% off list price. So techniquely you are paying for 9 years the amount of the lease. A car doesn't last that much longer and after the first 3 years doesn't drive like new and might need work.

1) let's say it's my relative or family friend, they are planning to give back the car anyways, they have nothing to gain or lose by lying to me about turning back the mileage. I trust that they wouldn't turn back the mileage, if their mileage is too high and they plan to turn it back, they'll tell me that, return the lease, and I won't buy it.

2) your relative paid money for 3 years for his lease, correct? Obviously that doesn't make financial sense if he just spent 3 years on a lease and THEN add extra money to own it. That why financing makes sense if your looking to buy a new car. Over here, I didnt pay for the premium amount a new leased car costs for the first 3 years - the lessee did. I'm just paying the buyout price. (So 6 years of a lease for ownership? Definitelynot 9 because I wasn't paying the first 3)

3) your last sentence is completely and factually incorrect on all fronts. Anyone who knows anything about Cars knows that's a completely false statement. Hondas and Toyotas last a lot longer than 3 years. A 3 year old car should NOT need work

amother

Beige

Wed, Mar 17 2021, 9:39 am

amother [ Seashell ] wrote:

Thank you!!! This is what I'm talking about
I would be buying it off from someone I know.
(And someone I know who treats their car well, not the other way around)
So are there any cons?

amother

Mint

Wed, Mar 17 2021, 9:39 am

amother [ Beige ] wrote:

I'm wondering about this now.
Let's say someone I know very well is leasing an odyssey that is nearing the end of its lease, which would probably be a 2018 of its a 36 month lease. I know they care for their car, I know there were no accidents, etc. Their buyout price is 22k.
They have no interest in buying it, they are just going to go for the next lease.
Buying from a dealer would be more like 27k.
Am I missing something?
Whats the downside?

There is a used car shortage now so prices have spiked. So it makes sense that a price that was set back in 2018, when no one had a clue the pandemic was coming would be a much better deal. Now I’m thinking I should look into this as well. I really need an odyssey or similar car and have been holding off because the market is so tight.

amother

Mint

Wed, Mar 17 2021, 9:45 am

amother [ Coffee ] wrote:

It probably makes sense to do now as prices of used cars skyrocketed during COVID. I needed to replace my van a couple of months ago and tried to find a lease to take over as the residual values from 2018 leases were significantly lower than the used cars on the market. We wound up buying from a used car dealer as we couldn’t find a lease and needed to have the car already.

How do you look for these leases? Does someone in Lakewood connect people?

amother

Seashell

Wed, Mar 17 2021, 9:47 am

amother [ Beige ] wrote:

Thank you!!! This is what I'm talking about
I would be buying it off from someone I know.
(And someone I know who treats their car well, not the other way around)
So are there any cons?

I'm about to do it for the second time for my own personal use and have helped other family members do it as well. (Problem about 5 purchases in the last 10 years or so) All have worked out very well.
The one I am giving up now I have for over 10 years. Barely put in any mechanical work aside from regular maintenance and is still in very condition. I am selling it and getting good money for it.
So in my opinion, no cons!
(Unless you want a brand new car which doesn't sound like you care.)

amother

Smokey

Wed, Mar 17 2021, 9:51 am

amother [ Beige ] wrote:

Ok about number one it makes sense. 2. I meant to say if the depreciates 25% in 3 years then technically you are paying the other 75% over an additional nine year. I don't know how to explain it clearly . A leased car generally doesn't need any care except oil changes. After 3 years you need to worry about tires and other maintenance. Edited to add maybe I dont make complete sense. because I am thinking about my car and we are paying almost half of the cost of the car in 3 years. So it definitly doesn't pay to lease and then buy it but maybe it does pay to ask the company and see what number they come back with. I am basing the previous info on the fact that my relative got quoted about 20k on a 26k car which he put over 50k of mileage and I thought that was absurd.

amother

Seashell

Wed, Mar 17 2021, 9:56 am

amother [ Smokey ] wrote:

Turning back the mileage is extremely difficult with the newer cars. So anyone returning a lease today likely did not turn back the mileage. Besides if they're selling off the lease there's no need. They don't pay for the overage.
In terms of upkeep, any used car you're going to buy (or even new after 3-5 years of ownership) will need maintenance. May as well be a relatively new car in good condition that can last many years than taking a chance on an older used car.

amother

Ginger

Wed, Mar 17 2021, 9:58 am

We just started leasing a car. We got a really good deal and put nothing down. We plan on buying it out after 3 years. So essentially we’re financing a new car with no interest for the next 3 years. We did the math and it comes out to a few thousand less than dealer price. And we don’t have to worry about the quality of a used car. We’re the only people to ever drive it.

amother

Beige

Wed, Mar 17 2021, 11:26 am

amother [ Ginger ] wrote:

Where did you find a lease with no interest?

amother

Ginger

Wed, Mar 17 2021, 11:44 am

amother [ Beige ] wrote:

Where did you find a lease with no interest?

We didn’t get a pease with no interest. We got a very good deal and our total monthly payments (interest and all dealer fees included) are actually less than what it would have been if we had financed this car interest free. But we did lease through a family member which is how we were able to get such a good deal.

We wanted a new car. We looked into buying pre-owned but there is a shortage and they were very expensive. So then we turned to buying new and this was suggested to us by a family member in the business. It’s basically financing a new car. When we buy it out at the end it will be a couple of thousand less than had we bought it brand new.

ETA- if we do finance this car after the lease we will have to pay interest and this whole leasing to save money won’t have helped us. But if we pay upfront, we won’t.