Buying a car off lease?
How many people have done this and have been satisfied?
I have a 2010 Mazda CX9 and overall am pleased, have had no issues. Once the check engine light came on but this was due to the gas attendant not putting the cap on all the way.
We bring it back next summer and I suspect I am going to be slightly over my mileage, unless I can bring it back a little earlier.
I love the idea of getting something new again (even the same vehicle, maybe different color), but then I also like the thought of being able to eventually just pay it off and not have a payment for a few years.
I also know a couple of people who started to have MAJOR issues with their vehicles as soon as they bought it off lease.
I've never leased before and this is the first "brand new" car I've had.
I have leased two cars so far. Both were 'bought' new.
The first one is we took over the lease on a from a family member because they weren't using the car much and I was interested in the car. They were far enough into the lease and paid for enough mileage we knew we were probably going to come out ahead buying the car at the end of the lease, which we did. The car still had part of the original warranty when it was off lease (3 year lease on a car with 4 years of new car warranty). The car is great and I really like it.
The second leased car is a sports car that I wasn't planning to keep long-term, so leasing with a predefined value at the end of the lease and not worry about needing to sell the car. The problem is I am less than halfway through the lease and the with a baby the car is not very useful now. It's crazy expensive to get out of the lease this early though.
As far as your car goes, here are some thoughts:
- If you are going to be a slightly over mileage, paying for it is probably not a big deal and shouldn't discourage you from turning the car in. Get the inspection done and get some idea of what it's going to cost at lease return to decide if you want to buy it.
- If you think the car is going to be reliable long term (leasing vs. buying a car doesn't affect it's reliability/durability ) then buying it out of lease is safe.
- Definitely check the trade-in value of your car vs. the lease buyout. If trade in is much lower, you are going to lose money buying the car, i.e. paying more for it than it's really worth. If buyout is less than the car is worth, buying the car can be a financial gain (you can immediately sell for a profit ).
That's the problem I ran into when I leased a car a few years ago. I got a really, really good deal on the monthly payment (like, ridiculously low), so even after three years of leasing that car, I still owed a large amount on it. I'd also gone significantly over the allotted mileage -- due to an increased commute since acquiring the car -- and would've been penalized for it.
Originally Posted by analogman
I went into the dealership and calculated the monthly payment if I kept my car versus if I traded it in and bought the current-year model of the exact same car, and it ended up only costing me a little more each month to buy a brand-new one. I'm glad I did that because my old car had been in an accident (I got rear-ended on Hollywood Boulevard in L.A. during rush hour -- so fun!) that required extensive repairs and didn't perform as well as it originally did, and now I have a reliable car that I'll have paid off by this time next year.
I actually bought my car used as a lease return to a dealer. It came with a certified warranty that went to 100k miles, but only went to 3 years after I bought it. During the 4th year, I had to spend a small fortune for an A/C repair, but that may or may not have been caused by a giant pothole that I drove into (incidentally, also in Hollywood). Other than that, my car's been reasonably reliable for something that's 8 years old with 74k miles.
The biggest plus in buying your own car after the lease ends is that you know the history of the car. It's definitely the way I would go if I didn't have to drive very much. But I think the biggest lesson to be learned here is driving in Los Angeles is a pain in the ass
"I'm on the pursuit of happiness and I know, everything that shine ain't always gonna be gold
I'll be fine once I get it...I'll be good...."
- Kid Cudi
Winney, you won't get the warranty extension visanity mentioned since you are buying out the lease, and the warranty comes with certified cars.
However, if you decide to buy the car you can buy the extended warranty from Mazda. This is the same extended warranty they offered you when you bought the car. You can only buy the factory extended warranty while your car is still under the factory warranty though, so think fast. Aftermarket extended warranties aren't anywhere as good as the factory one, so don't bother with one of those.
Having the payoff be higher than what the car is worth is quite common. The math is straight forward and someone has to pay for the cost of the car somewhere. There are some manufacturers who offer low lease payments by jacking up the residual value. Of course, they are on the hook for the vehicle depreciation in that case, so they have an interest in keeping the resale value of the cars high, like by raising prices of new cars regularly. Those would also be the companies offering 10k miles per year leases.
Originally Posted by DaneCA
Thanks everyone. This is very helpful. We've never leased before so we've been torn.