Leasing, What happens at buyout time?

[4thmouse]

Well folks, My wife and I just getting ready to hit the 2 year mark of discharge from our CH7 bk. My scores just hit the 700+ Fico - Exp 712, Eq, 722, Trans, 709. And my wifes have been hovering at 720 - Exp 720, Eq, 719, Trans 720.

I find I really really want the new 2013 RAM. we were going to buy it, however, I was considering for the first point in my life leasing a vehicle. The lease payments are half of what the loan payments would be. It strikes me that in leasing a new truck, At the end of the lease the truck will be worth Significantly less no matter what I do.

So the question I have, At the end of leasing how does the buyout option work. Is it based off the purchase price or the value of the vehicle. Say I lease a new $50K truck, and in 2 years the value is only $35K, Can I negotiate on the current actual value of the vehicle? Because if I can, I think that I would actually save money by starting off a lease

So, to those with with experience with leases, how does it work at the end?

[justbroke]

You'll know the buyout value when you enter your contract. When the lease term is up, you should be offered the buyout and it will probably be what is listed on the original contract. You will then need to determine what the present value of the vehicle is at that point to see if the vehicle is worth more or less than the buyout offered by the contract (first offer). If you don't like the buyout price (which you should already know because that residual is already on the contract), then prepare to negotiate. You should also be prepared to walk away if you don't like the deal.

So, you could try to make a deal if the present value (at time of contract end) is less than the buyout. I do not know how to really strategize on how to approach the lender. I was going to lease when I purchased my last car, but I decided to just buy it.

You won't know if you'll make out, unless the vehicle has a high residual value and mixed with the term you select. You may or may not make money on the deal. It just has too many variables for me.

Personally, I'd say lease if that's the way you go through cars... every 2-3 years. Otherwise, in the long run, purchasing is better if you keep cars for 6-10 years. I wouldn't lease based on making money in the deal.

[4thmouse]

Thanks for the advice, I went ahead and purchased one with traditional loan. They gave me a .9% interest deal and $4K more than anything BB, KBB, or NADA said it was worth. First time I have ever purchased a vehicle with only 15 miles on it. Feels pretty good, But Im more paranoid than ever someone is gonna key it or it will hail or something, lol.