Taking over a lease

amother

Honeydew

Sun, Jan 03 2016, 7:03 pm

We are looking to buy a car. It needs to be reliable and last us a long time, so no buying some 10 year old junky thing. Our options at this point seem to be certified pre-owned or used but not more than 3-4 years old. We don't want to lease because leasing is usually not worth it. Recently we heard someone suggest taking over a lease that's nearly finished and then buying at the end. Sounds interesting, but does that ever make sense? Is it a better deal than a long lease lease, and is the buying price going to be better than buying used? Or should we just stick with the original plan of buying a lightly used car?

amother

Firebrick

Sun, Jan 03 2016, 7:54 pm

if someone is over or near over their mileage, this is a good way for them to avoid the fees at the end. Like if they are a commuter who puts on a lot every month, but you don't drive as much.

Either way, you won't pay over mileage fees because you are buying it out. Usually the buyout price is in the original contract somewhere.

Better because you meet the person who used the car first and can see how the car was used. Also it cuts out the amount the used car dealer has to earn so you can save.

Amarante

Sun, Jan 03 2016, 8:44 pm

The only time I am aware of people selling their leases is when there is still time left on the lease but the original person's circumstances have changed so the lease no longer makes sense for them. So if you take over the lease, you would still be leasing the car until the lease is up and then could have the option to purchase per the contract because legally you are in the shoes of the original person.

Seems like a lot of hassle unless you actually want to lease a car for a bit and the person got a great deal on the lease.

The problem with purchasing at the end of the lease is that the formulas used generally take into account the FMV of the depreciated cars so that cars like a Honda which are still highly desirable at the end of three years have a higher purchase price than cars which are less desirable. Again, you would need to run the figures for a specific car and see if it makes economic sense in each situation.

I would probably opt for a well reviewed Dealer Certified Car like a Honda because it seems the simplest way of finding a car and I would be getting peace of mind in terms of a car that was "certified" as well as being a good car that holds up well.

amother

Beige

Wed, Mar 17 2021, 8:47 am

Amarante 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?

mizle10

Wed, Mar 17 2021, 8:51 am

amother [ Beige ] wrote:

My last van I had, someone did this. When our lease was up they “bought it” off us for the buyout price. It was a win win, they got a good price on a car and we didn’t have to pay for minor scratches and problems at the end of the lease that the dealership usually charges you for.

amother

Cerise

Wed, Mar 17 2021, 9:14 am

amother [ Beige ] wrote:

I would do this over buying used from a dealer. I've rented enough cars to see how poorly many rental company vehicles are maintained, I'd feel much safer buying when I knew who drove it before.

(We just bought new for this reason.)

amother

Pink

Wed, Mar 17 2021, 9:46 am

amother [ Cerise ] wrote:

True this. Rental cars get ruined since people don't care what happens to a car that they drive once a week. My husband's hobby in particular is trying to see what speed the car can reach, as most companies stop their cars around 120.

amother

Beige

Wed, Mar 17 2021, 11:47 am

amother [ Amber ] wrote:

It’s usually not a good idea.
The only time it’s worth it is if the person who has the lease put on very few miles and has a decent buyout price.
It’s much simpler and is usually cheaper to just buy a used car.

The example I gave is a 2018 odyssey with a buyout price of 22k, when the going price is 27k.
Car leases usually have low mileage, <10k/year, so it would be <30k miles.

Can you find a used car that is only a few years old with those specs in that range?

amother

Beige

Wed, Mar 17 2021, 11:48 am

amother [ Cerise ] wrote:

Yes but new a new minivan is in the high 20s and 30s

amother

Coffee

Wed, Mar 17 2021, 11:56 am

amother [ Amber ] 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.

amother

Jade

Wed, Mar 17 2021, 12:08 pm

amother [ Beige ] wrote:

Yes but new a new minivan is in the high 20s and 30s

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.

amother

Smokey

Wed, Mar 17 2021, 12:18 pm

amother [ Beige ] wrote:

Can you elaborate?

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.

amother

Beige

Wed, Mar 17 2021, 12:27 pm

amother [ Orange ] wrote:

Why not just buy directly off a dealer, after lessor has returned the three-year lease car

I'm asking the opposite, when so.eone is already leasing, the buyout price is usually significantly lower than going to a dealer.
Because the dealer needs to make money off the deal, too. So your buying it at a premium.