Tips on Buying Cars/leased car


QUESTION: Roger, the 3 year lease on my car is almost up and I'll want to buy it. I've never leased before...will I continue to make the same payments I have been, until the car is paid off, or will I need to refinance it? I heard that there can be 'lease equity' at the end of the lease.

ANSWER: Lee ....I am so sorry I have been on vacation and just got back this afternoon... I have a few questions for you but you are smart to be thinking about this now.

#1 What is the yr make and model and trim level of the car...including miles?
#2 What is the Lease End Value on your lease paperwork?
#3 What bank is your lease through?
#4 Has anyone contacted you from either the bank or the originating dealer you leased the car from.
#5 How is your credit right now

When I get that info (and I will be watching for it closely) what we are going to come up with is a plan for you to buy that car for the least possible price. Here is what I will do on my end

- I will figure out what your car is worth in today's market and we will compare that value to its LEV (Lease end value) ...that will tell us if you have any positive equity :)

- By knowing what kind of car you have and the bank you lease it through we will know how anxious that bank is going to be getting it back... most banks are NOT in the car business and don't want your car back at lease termination...other banks are in the car business specifically what are called "The Captives" Ford Motor Credit and Honda Financial and Toyota Financial etc. They are tougher to negotiate with especially if you have a highly sought after car a Toyota Tacoma or something.

Yes you can re negotiate your lease end value at lease termination... it doesn't always work but it depends upon the markets love for what you are currently leasing. Kia Optima? Kia cadenza Step right up to the bargaining table

As for the second part of your question ... people who are able to lease generally have great credit and if you have made all of your lease payments on time then the leasing bank will take the lease end value and fees and rewrite a standard retail installment contract with an interest rate based upon your credit and their current guidelines ...some banks will let you avoid some lease end fees when you roll it into a retail car loan. You also have the option of going to your local credit union and financing the balance there depending upon the other rate you are offered. All of this will take place (usually) at the originating dealer who will move heaven and earth to get you to release a new car and there will be some tempting offers and additional 'loyalty" types of incentives (usually)to put you into a new car. Should that plan of theirs fail then they will do the paperwork hang the paper at the bank for you and then try like crazy to sell you all of the service contracts gap insurance etc.

Here is what I think right now ...because your lease was a short termer (36 mos) your lease is going to be through a captive and you will have negative equity in your car ... lets see if I am right

I humbly await the information requested to finish this project for you


The Car Guy   

---------- FOLLOW-UP ----------

QUESTION: Thanks, it's a 2014 Nissan Juke, 'S' model. Miles at end of lease (3/31/17) will be well below the 36K miles allowed,~15-16K (I don't drive much). That's why I thought I would have some equity in it.
The lease end/residual value says $13,053 on the lease agreement. I financed the car through the Nissan dealer and don't know who the bank is, it's not on the agreement. My credit is excellent, over 800. So from what you said, they will likely refinance the rest of the loan, making my current monthly payments($163)even less?  Thanks

OK now we are making progress ... The MMR ( Manheim Market Report) which tells us what your car has sold for at auction in the last 60 days based upon miles and condition says your car should be worth 14,500.00 to 15,000.00 ish (there is a huge mile add on the book value) if you are tempted at all to trade it in then don't because you can sell it on Craig's list for 15-17k  

Tips on Buying Cars

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Roger Alvey


I can answer any question about the car buying process. I am a recognized industry expert on all issues regarding auto finance, including sub prime and buy here pay here financing, I can answer questions about car lock out systems, GPS monitoring by your bank, and about auto recovery methods and defenses. I am a 20 yr car industry expert and can tell you what to look for in a used car, how to negotiate the deal, help with how to market your own car, and how to negotiate with the internet department of any car store. I can tell you every single way the dealer is set up to beat you and how to avoid those traps, I can discuss all aftermarket and extended service contract products you will be offered in the finance process, I have lectured extensively on "The Best Way to Buy a Car" to civic groups and university students. I am a credit expert and can tell you what the dealer and banks are looking for and the rate you can expect to pay. HERE IS THE LINK TO MY OTHER ALLEXPERTS CATEGORIES WHERE I HAVE ANSWERED LOTS OF QUESTIONS HERE IS A LINK TO MY BLOG


20 years industry experience in top management of dealerships and dealer groups. Recognized industry expert since 2004 in the Top 10 industry experts for The Gerson Lehrman Groups Auto Industry Council. I also do consulting work for Atheneum Partners, Expert 360, Expert Connect and Coleman Research. I have been a franchise owner and understand all facets of the auto industry from the time the car leaves the factory until it leaves the lot with it's new owner. I have written training materials for both the prime and the subprime sales and finance process.

NADA, OADA, NFIB, State Certified Used Car Appraiser

Special Finance Insider, Dealer, and Automotive News, Gerson Lehrman Group Auto Industry Council News (frequently)

Willamette University - Salem Oregon BA Economics Willamette University Graduate School of Business - Econometrics Statistics

Awards and Honors
GM's Award of (their most prestigious award) Given to Dealers who surpass their annual benchmark planning volume while also maintaining Top Box (top 5%) CSI

Past/Present Clients
Citadel Investment Group , Summit Partners US ,Broad Peak Investment Management, Nautic Partners, LLC, Hellman & Friedman Investors, L.P. and over 40 additional money managers, hedge funds and research groups

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