Lease buy-back from a friend

[dparm]

My old boss was talking to me this morning about a unique auto situation he might be getting into. Wondering if anyone could weigh in with how this might work.

His friend has a lease on a Lexus IS250. The lease is about to finish up and he was thinking about buying it. He's wondering if it's smarter for her to just do the buy-out and then sell it to him (though there would be some nasty sales tax for both of them), or if she should just turn it back in after the lease and then he'd buy it right from the dealer (where he might get a really rotten price, especially if they know he wants it badly).

My suggestion was to find out what the lease buy-out is, and see if it's more or less than what a comparable used IS250 sells for at a dealer. He's rather "set" on getting hers because it was well-cared for and has low mileage, though.

 

[JeremyInMT]

Unless cost is not an issue, I can't imagine making the decision without knowing those numbers.

 

[2oldtommy]

I think it depends on the lessor. If it is a bank, then they can sell it to most anyone, If it is Toyota Motor Credit, they will sell directly ONLY TO THE LESSEE. (They will not compete with their dealers). Ohio may be different than IL, but that is the way it was in OH some years ago. Look at the registration to get the lessor name, (bank or leasing co.)FWIW--Oldtommy

 

[bkbenjy]

This car came into our shop for bodywork (it is a leased car). One of the mechanics heard a funny sound coming from it.

The customer said they never changed the oil. 2010 Nissan Maxima with 17,000 miles. Original motor oil.

This is how people treat cars they don't plan on keeping. I would advise against it.

 

[dparm]

Originally Posted By: bkbenjy
This car came into our shop for bodywork (it is a leased car). One of the mechanics heard a funny sound coming from it.

The customer said they never changed the oil. 2010 Nissan Maxima with 17,000 miles. Original motor oil.

This is how people treat cars they don't plan on keeping. I would advise against it.



It's a longtime friend of his, he knows the history of the vehicle...hence he wants that exact one.

 

[JHZR2]

You can return the car to any dealer typically. Find one that will coo it for a reasonable cost (understand the basis of the costs though so it is realistic), and then swing a deal.

 

[MrCritical]

Usually the residual value of a lease car is above market value, unless the car is extra clean and low mileage. And the lease company doesn't have to even sell it for the residual.

Sounds like boss has the hots for the car, no matter what the price.

 

[Cujet]

Contact the lease company and discuss. Have your value "data" available prior to the conversation. Make reasonable offer.

The lease company will offload it at auction. You know it, they know it. It's not likely the dealership will keep it.

The "residual" value is a projected number that may or may not reflect reality. For you, it's meaningless.

Also, if the person you contact at the lease company is unwilling, call back and talk to another.

Good luck.

 

[JTK]

Originally Posted By: JeremyInMT
Unless cost is not an issue, I can't imagine making the decision without knowing those numbers.


Exactly.

Buying the vehicle at the conclusion of someone else's lease could be a great deal if it's a typical 36mo/36Kmi lease with a ~50% residual.

That being the case, you're getting a 3yr/old Lexus for ~50% of it's original MSRP. A better deal than you'd find anywhere else, especially with what used vehicles are selling for these days. I'm not sure how it is in the luxury segment, but small/mid cars are insanely priced used.

Joel

 

[D189379]

Isn't the lease buyout a set price?

 

[IndyIan]

Originally Posted By: D189379
Isn't the lease buyout a set price?

That's what my buddy had up here. At the end of the lease, the person that was leasing the car has first crack at it for the price specified at the end of the lease. And some dealers (Honda or Toyota) would offer to pay the owner for the buy out for a customer before the end of the lease as it was well below wholesale prices.
With something like a Honda Civic, you could buy out your car at the end of the lease and then make $4k reselling it.

 

[MrCritical]

Originally Posted By: D189379
Isn't the lease buyout a set price?


Not with every lease, and when it is, only for the lessee.