Tips On Buying A Car At The End Of Your Lease
You noticed that you like your car enough to want to keep it in the driveway now that you have come at the end of your lease. Some research has to be done just like when buying a used car is you want to nail a good deal.
First, it's important that you know the cost of buying out your lease. You need to look for the "purchase option price" and read the fine print of your contract. Usually comprising the residual value of the car at the end of the lease is this price which is set by the leasing company and it also has a purchase fee option that ranges from $300 to $500. Your monthly payments were calculated as the difference between the vehicle's sticker price and its estimated value at the end of the lease plus a monthly financing fee when you signed on the dotted line. What is termed in leasing jargon as "residual value" is this estimated price of the car value at the end of the lease. It is the loss in value or the expected depreciation of the vehicle over the scheduled-lease period. For example, at the end of the lease, a car with a sticker price of $40,000 and a 50% residual percentage will have an estimated $20,000 value.
Your need to determine the market value, also known as the actual value, of your vehicle now that you know the cost of buying out your lease. You need to know the amount your car retail costs in the market. To pin down a good, solid estimate you need to do some pricing research. The price of the vehicle with similar mileage and condition is what you need to check with different dealers. Use online pricing websites for detailed pricing information.
There is gleaning price information from different sources and this should give you a fair estimate of the retail value of your vehicle. Comparing the two amounts is all that is left for you to do. If the actual retail value is higher than the residual value, then you're a winner. The bad news is that it's likely a car that's coming off a lease to be a little on the high side. Try not to despair. Leasing companies are always on the look out for offers due to the fact that they know the residual values on their vehicles are greater than their market value. You can knock down the price of your leased vehicle with some smooth negotiating tactics.
A price that is below your actual target is what you need to put forward and until you are near that figure, negotiate hard. Chances are you'll get your car at the market value if not slightly lower.
First, it's important that you know the cost of buying out your lease. You need to look for the "purchase option price" and read the fine print of your contract. Usually comprising the residual value of the car at the end of the lease is this price which is set by the leasing company and it also has a purchase fee option that ranges from $300 to $500. Your monthly payments were calculated as the difference between the vehicle's sticker price and its estimated value at the end of the lease plus a monthly financing fee when you signed on the dotted line. What is termed in leasing jargon as "residual value" is this estimated price of the car value at the end of the lease. It is the loss in value or the expected depreciation of the vehicle over the scheduled-lease period. For example, at the end of the lease, a car with a sticker price of $40,000 and a 50% residual percentage will have an estimated $20,000 value.
Your need to determine the market value, also known as the actual value, of your vehicle now that you know the cost of buying out your lease. You need to know the amount your car retail costs in the market. To pin down a good, solid estimate you need to do some pricing research. The price of the vehicle with similar mileage and condition is what you need to check with different dealers. Use online pricing websites for detailed pricing information.
There is gleaning price information from different sources and this should give you a fair estimate of the retail value of your vehicle. Comparing the two amounts is all that is left for you to do. If the actual retail value is higher than the residual value, then you're a winner. The bad news is that it's likely a car that's coming off a lease to be a little on the high side. Try not to despair. Leasing companies are always on the look out for offers due to the fact that they know the residual values on their vehicles are greater than their market value. You can knock down the price of your leased vehicle with some smooth negotiating tactics.
A price that is below your actual target is what you need to put forward and until you are near that figure, negotiate hard. Chances are you'll get your car at the market value if not slightly lower.
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Our automobile mechanic Wilmington can handle a comprehensive range of services for most trucks.