Is it a bad idea to buy a car after leasing it?

[scarlet knight]

I like my Audi A4. My dealer tells me that leasing a new one costs $50 more a month and they want a $2k cap cost reduction.

I am substantially under mileage allowed. I’ve always heard it’s a bad financial move to buy a leased car..

Is it?

[RJG]

Leasing is great for dealerships to constantly be moving cars off their lots.
It's an awful thing for a car buyer to get caught up in.

From a financing perspective - now you are being told you can go ahead and buy the car you've already been shelling out $ for each month.
Not worth leasing IMHO.

[NYC6]

Buying off a lease is a little tricky. Sometimes you pay more then you should and others you can get a real bargain. One of the most important things to look at is residual value of leases. You can do a search and learn about it to help you. I’m no expert so cant expand more then that.

[CamSLC]

No, it's not always a bad deal. If you're substantially under mileage your car may be worth more than the residual value.

Depending on the Audi financial details you may be able to trade it or sell it for more than the pay off.

[DonRickles]

Do the math.

[Watchflair]

Originally Posted by scarlet knight

I like my Audi A4. My dealer tells me that leasing a new one costs $50 more a month and they want a $2k cap cost reduction.

I am substantially under mileage allowed. I’ve always heard it’s a bad financial move to buy a leased car..

Is it?

Case by case scenario. Sometimes it makes a lot of sense and sometimes not so much.

Can they work with you on the $50 difference at all... Maybe shop it around to double check.


There are instances where customers have substantial equity in their leased vehicles - it happens.

[swils8610]

If your residual value is lower than current market value buy it out.

If it’s the opposite turn it in and let Audi take the hit.

I’m 26 years in the auto industry. Leasing is great for some people and not great for others.

Buying a lease out is very common.

Personally I’ve leased all of my cars and my wife’s for 25 years.

If it appreciates in value buy it.
If it depreciates in value lease it.


Sent from my iPhone using Tapatalk Pro

[tuna_gmt]

Whether it’s a good deal or not is simply a function of the net amount you would pay to buy it out vs what it would cost to buy the same thing on the market.

There is some intangible value in knowing the car’s history and also what kind of things have been done to it or in it.

Leasing appears to be a way to pay a substantial premium in exchange more convenience and less risk in terms of costly repairs. There are a lot of hidden costs and games involved too, like having to put new tires on it before turning it in.


Sent from my iPhone using Tapatalk

[jltait]

Don’t forget the warranty. I’d rather pay the premium on a new lease than buy an out of warranty Audi.

[Euge]

I think depends on the price....
If the price is not right maybe it was better buying it at first.


Sent from my iPhone using Tapatalk

[droptopman]

There is a guaranteed buy price right on your contract. Compare that price to wholesale and retail values the car is currently selling for. If your buy price is lower than the market value it may make sense to buy it. Just went through this this week. I usually turn my leases in and buy something new as the buy price is more than the market value, however this time the buy price was well below market value--even wholesale value so by buying it, I have instant equity even after paying taxes. Plus I am way under on miles and really like the car. Kind of surprised me as it is a C43 AMG Convertible and generally they depreciate pretty hard. Now I will keep until the warranty is close to being up and trade in on a GLE 63S when the time is right.

[hbg1]

Originally Posted by swils8610

If your residual value is lower than current market value buy it out.

If it’s the opposite turn it in and let Audi take the hit.

I’m 26 years in the auto industry. Leasing is great for some people and not great for others.

Buying a lease out is very common.

Personally I’ve leased all of my cars and my wife’s for 25 years.

If it appreciates in value buy it.
If it depreciates in value lease it.


Sent from my iPhone using Tapatalk Pro

Great advice summed up in one post.

I've been in a similar situation to yours. My first lease ended back in June and it didn't work out to buy it unfortunately. I was way under miles and I loved the car but the math didn't make sense.

[HHIslander]

Originally Posted by DonRickles

Do the math.

+1

Check used prices. You already know the history of the car so if the buyout is less than market, sounds like a good deal to me if you like the car.

Personally I would never own a German car out of warranty. I’d take the money and put it down on a new one or lease another one.

[winst]

Originally Posted by HHIslander

+1

Check used prices. You already know the history of the car so if the buyout is less than market, sounds like a good deal to me if you like the car.

Personally I would never own a German car out of warranty. I’d take the money and put it down on a new one or lease another one.

I agree with all of this other than would it not be possible to purchase a warranty extension for piece of mind?

[HHIslander]

Originally Posted by winst

I agree with all of this other than would it not be possible to purchase a warranty extension for piece of mind?

It is possible. Kinda forgot about that.

Not sure how much they are, but I’d imagine they are not cheap at all.

[scarlet knight]

I do have a four year/50,000 mile warranty. At the end of my lease, I will be at three years/25,000 miles. So I will have another year of warranty.

If I buy the car, I will be at the cusp of a service interval. I haven’t bought new tires yet, not sure where I’ll be in six months.

[swils8610]

German cars must have warranty protection.


Sent from my iPhone using Tapatalk Pro

[scarlet knight]

My current dealer has offered me a comparable A4 to lease for $50/month more than I am paying now. I have excellent credit. Interest rates are lower than they were 2 1/2 years ago, so I am not motivated. I guess I have to negotiate harder. And/or talk to other dealers.

[Etschell]

Take it to carmax first. They may pay more than the residual. You pocket the difference.

[swils8610]

Originally Posted by scarlet knight

My current dealer has offered me a comparable A4 to lease for $50/month more than I am paying now. I have excellent credit. Interest rates are lower than they were 2 1/2 years ago, so I am not motivated. I guess I have to negotiate harder. And/or talk to other dealers.

Negotiate more. They’ll come down.


Sent from my iPhone using Tapatalk Pro

[G8RDPM]

Originally Posted by Etschell

Take it to carmax first. They may pay more than the residual. You pocket the difference.

This!

Plus wasn't there an Audi manager on the other thread(or am I hallucinating again)?

I have returned/traded in several lease cars where I had some equity and didn't have to give any money down.

[Andad]

Appreciating or depreciating value is only a small part of the equation.

Only you know the real service and ‘issues’ history of this vehicle and to me this is important.

An appreciating asset can be soured very quickly by mechanical/electrical expenses.

[DLRIDES]

An Audi with no warranty is a wretchedly deplorable thought ..........

[Bigblu10]

No way! I leased a 99 full size Chevy Silverado for 48 months. I believe they wanted an outrageous amount of cash for me to purchase it. They almost literally begged. It was much more money in total than going out and buying a brand new one off the lot. I said come and take it away. That was my last lease ever.

Sent from my SM-N960U using Tapatalk

[pickettt]

Originally Posted by DLRIDES

An Audi with no warranty is a wretchedly deplorable thought ..........

Can I get a witness?!

[vh2k]

Check with Carvana and Vroom and see the price at which you can flip it.

(This is a Rolex forum after all.)

[scarlet knight]

Originally Posted by vh2k

Check with Carvana and Vroom and see the price at which you can flip it.

(This is a Rolex forum after all.)

My lease says I can buy the car for $26,000. So I give Audi $26K and Carvana or Vroom give me $28K and I made $2k? Is it worth the logistics? I still need another car.

[Tricolore66]

You have to pay taxes and register the car in your name before you can sell it. I doubt there's any upside at the end of the day, and a lot of hassle.

Originally Posted by scarlet knight

My lease says I can buy the car for $26,000. So I give Audi $26K and Carvana or Vroom give me $28K and I made $2k? Is it worth the logistics? I still need another car.

[CamSLC]

Originally Posted by Tricolore66

You have to pay taxes and register the car in your name before you can sell it. I doubt there's any upside at the end of the day, and a lot of hassle.

This is actually dependent on the financing company. I've sold cars off lease and collected the difference from the payoff and trade value.

Originally Posted by scarlet knight

My lease says I can buy the car for $26,000. So I give Audi $26K and Carvana or Vroom give me $28K and I made $2k? Is it worth the logistics? I still need another car.

You would want to approach Carmax/Vroom with the payoff for the lease and they will hash out the details, pay off the lease, and give you the difference. As long as your lease allows a third party buy out.

[Mifune]

my wifes car was about 26500... we paid the 320mnth for 36 months yielding 11520 in payments... my residual is 14,000 and change and the car has a retail market value of over 17,500.

it might not be the best deal in the world but I would buy my LOW MILEAGE 17500 car for 14,000ish any day.