Lease Buyout?

[Livemeyer]

I feel a bit robbed by the dealer I purchased from, as they threw out the original agreement on my lease (agreed upon in November 2010) for a 2K downpayment and $385/mo. Part of that, I think, is because the dealer changed name which I believe was due to a change in ownership (Performance Nissan to Magic Nissan). I think the other part was the Titan I traded in was upside-down in payoff due to me taking out money against it in 2010. Either way, after a 2.5 hour struggle, we ended up free of the Titan and $3k of our money and at $428/month. I know, I know, you don't have to tell me, I didn't get a very good deal. I'd say it was a pretty poor deal.

On a happier note, I'm a month into my Leaf ownership and am pretty happy with it. Just now making the first payment, and along comes a letter from my credit union, says I qualify for a 1.99% loan. Called for my payoff, $27,322 (will be slightly less next week after first payment goes through). So, running the numbers, we are talking 84 months, $348/month. That's a significant monthly payment savings (80 bucks!). What blows me away is that the interest paid over the course of 7 years for 27k is less than $2k. I ran the numbers for a 72 month payment, $398/month, but it only saves me about $200 in interest.

Now, with such a raw deal on the Leaf lease, some may wonder why I went that route? I have three kids and a mortgage, so I wasn't really going to find anywhere near $7500 in taxes to save when I file next year. So leasing made sense, sort of. And seeing that NMAC gets that $7500, reduces my payoff, now I can convert to a loan with an incredible rate and save money.

Now, am I missing something, or does this sound like the best thing to do?

 

[jimcmorr]

snip.. snip..

Now, am I missing something, or does this sound like the best thing to do?

I think this sounds like a good plan. Save yourself $80 each month and go with the loan. Several here have suggested that taking the lease then paying it off with a loan is a good way to get around the problem of not having enough of a tax bill to take advantage of the full $7500 federal tax credit.

I don't speak from experience because I live in a state which will not be allowed to order until next year about this time. But it does sound like a good idea to me.

 

[evnow]

There have been several threads on this - but I've not seen anyone post a successful buyout. Some dealers apparently object. Let us know how it goes.

 

[DaveinOlyWA]

call NMAC, pretty sure to avoid major penalties, you must carry the lease for 90 days. this allows you the instant fed tax credit so that $7500 you will not have to carry

 

[davewill]

Near as I've been able to piece together from the various posts on the subject, the letter of the lease says you can buyout any time. At least when people ask NMAC, they get a "yes". Everytime someone tries it though, the dealer squawks and insists you have to wait 90 days or so. At least one dealer claimed they would be stuck for the $7500, but I don't find that terribly credible, and think it must be their kickback/commission on the lease that's on the line.

Please report back if you go through with it.

 

[SanDust]

It's hard to know if you got a bad deal or not. There are many moving parts so unless you understand all of them it's unclear. One good rule of thumb is that the more concerned you are with monthly payments the worse deal you'll get. On the good side, one observation is that if you've traded in a Titan for a Leaf you'll save enough in gas to cover your monthly payments regardless of whether you buy or lease. So congrats on being ahead of the game.

Personally there are a lot of reasons not to buy the Leaf. I'd pay a premium to lease rather than buy.

Absent legal requirements you should be able to do the buyout. The dealer isn't carrying the paper, has no connection to the lease, and hence no say in the matter one way or the other. I can't imagine Nissan Financing caring one way or the other. As long as they get their money they're good. So if you want to convert the lease to a purchase you shouldn't have any problems doing so.

 

[camasleaf]

I called NMAC and the automated system gave me a payoff balance of $26700. Since the 7500 was my only down payment when added it gives me $34200. Quoted price was 32424 + 820 the destination fee + DMV results in less than $1000 for the cost of the lease. But when I called the dealer they said I need to make at least three payments before paying off the lease or I will be "charged" the 7500?!

NMAC gives you the option of paying off the lease through a credit union or bank, I am wandering if anybody did that?

 

[Livemeyer]

That is interesting. I would think NMAC would pocket the $7500 and would drop the payoff accordingly. Like you my payoff amount is in the high 26K range. I also reread the pre-approval offer from my credit union, the 1.99% is only offered at 60 months. They are offering 2.99% for 72 months, so I'm going with that. I was thinking I could steal 1.99% for 84 months but alas that is incorrect. :|

I will need to call NMAC on Monday to make sure that they don't have some issue with a payoff, like what you say, 3 months or get stuck with a $7500 bill!

 

[DaveinOlyWA]

I called NMAC and the automated system gave me a payoff balance of $26700. Since the 7500 was my only down payment when added it gives me $34200. Quoted price was 32424 + 820 the destination fee + DMV results in less than $1000 for the cost of the lease. But when I called the dealer they said I need to make at least three payments before paying off the lease or I will be "charged" the 7500?!

NMAC gives you the option of paying off the lease through a credit union or bank, I am wandering if anybody did that?

u need to talk with a rep. i did a $10,000 down and my pay off was like $15,000 something but was advsd there would be other charges associated with converting lease to purchase if done within first Payment (not 90 days) period. but i think i figured total additional cost was like $1100 or so. we have lease cost and lease to purchase surcharge which varies by state (WA is $300) i believe.

i was more than willing to pay up to $2500 extra (which is still more than $1500 more than my tax credit would have been)

 

[camasleaf]

Today I went to a different dealer and paid off the lease. I had the car for three weeks, and made no payments.

Price 32424
Destination 820
DMV 150
Total cash cost 33394

Down payment 0
Tax credit 7500
Lease Buy (cash) 27400
Total lease cost 34900

Delta 1506

I was like buying the Leaf again. Lots of paper work, took about one hour. Exiting too, ... we forgot the papers at the dealer. We should get the title with in 7 days.

 

[DaveinOlyWA]

so you leased from one dealer and bought the lease from a different one?

wow, that would be great. i could do the buyout in Oly instead of Rairdons which is 50 miles from me

 

[camasleaf]

so you leased from one dealer and bought the lease from a different one?

wow, that would be great. i could do the buyout in Oly instead of Rairdons which is 50 miles from me

Alan Webb Nissan in Vancouver agreed to do the paperwork. Of course I will give them the business for all the scheduled maintenance. I also allowed them to change the frame around the license plate.

I am in the same situation as you, the dealer I leased the car from is 40 miles away form Camas, Alan Webb Nissan is only about 10 miles.

 

[johnr]

Buying out a lease. I wish I had done that. Now with my current tax situation it appears I won't get a single penny of the $7500. Still trying to work the numbers, but it doesn't look good.

 

[LakeLeaf]

Alan Webb Nissan in Vancouver agreed to do the paperwork. Of course I will give them the business for all the scheduled maintenance. I also allowed them to change the frame around the license plate.

Wow - wonder if the dealer has a different expectation of the "scheduled maintenance" costs then we do. Maybe they plan on using synthetic oil

 

[kubel]

I never would have considered a lease buyout if it weren't for this thread. I'm in a situation where I can afford the car but don't qualify fully for the tax credit. This seems to be the best way to go about doing it. I just wish I could find a LEAF up here in Michigan. I'm driving down to Ohio (I'm not far from the border) to talk with a dealer down there about putting me in line for a orphaned LEAF as soon as one becomes available. They invited me to test drive their demo on Saturday. My only other option is to find a dealer that can work out shipping the car here from a state like California that's plentiful with orphans. Anyone have any suggestions?

 

[DuncanCunningham]

I don't mean to hi-jack a thread that is quite old but I'm going to be on the market for a Leaf in a few weeks. I do not quailfy for the all the tax credits as I don't earn enough or already have deducts that take care of that part. I heard that I should LEASE and then buyout the lease so I get all the benefits of the tax credits. Is that true though?

Anyone done it and can show the math to me?

I looked at the math of buying (if I could use all the credits) and compared it to lease and all totalled up, if I leased for 3 years and then purcashed the car at the end I'd pay $400 more for a lease.

If I were to lease the car and them buyout as soon as I could would I save anything or would nissan just charge me the money they would make on the car all at once in the buyout price?

I've seen some say that I could just make a lump payment on the lease and wait for it to run it's course and then see if I get a better price at lease term.

I'll be able to get my hands on $20,000 cash on May 1st, so that is why I'm trying to figure out the best method to get the car at the best price without losing out on credits. Can I lease a car from another state? those kind of things, I do not know.

 

[TimLee]

...

I looked at the math of buying (if I could use all the credits) and compared it to lease and all totalled up, if I leased for 3 years and then purcashed the car at the end I'd pay $400 more for a lease.

...

On the 2013 the residual amounts were so much above market value of used 2013 LEAFs that NMAC has been offering $5,000 reductions to get leasees to buy them.

With the rumored Gen 2 2017 LEAF with option of 48 kWh pack being out in late 2016, it is likely that the market value will drop quickly on a 2015 LEAF.

If lease is only $400 more over three years it would be better to just do the lease for three years and then decide if it is smart to purchase it at the end of the lease.

Very possible that NMAC will still be offering substantial reductions of the residual price.

Big part of why leasing has been much better choice at least from 2013 forward.

 

[DuncanCunningham]

...

I looked at the math of buying (if I could use all the credits) and compared it to lease and all totalled up, if I leased for 3 years and then purcashed the car at the end I'd pay $400 more for a lease.

...

On the 2013 the residual amounts were so much above market value of used 2013 LEAFs that NMAC has been offering $5,000 reductions to get leasees to buy them.

With the rumored Gen 2 2017 LEAF with option of 48 kWh pack being out in late 2016, it is likely that the market value will drop quickly on a 2015 LEAF.

If lease is only $400 more over three years it would be better to just do the lease for three years and then decide if it is smart to purchase it at the end of the lease.

Very possible that NMAC will still be offering substantial reductions of the residual price.

Big part of why leasing has been much better choice at least from 2013 forward.

Sorry Correction. I'd pay $4000 more not $400.

 

[TimLee]

Sorry Correction. I'd pay $4000 more not $400.

That seems like an awful lot and that you should be able to negotiate a better lease than that.
Best to try towards end of month, and negotiate with multiple dealers through email.

But your delta is assuming that you end up paying the full residual at the end of the lease.

That has not been happening on the 2013.

Now Nissan has lowered the residuals quite a bit on 2014 forward, which is why the lease monthly rates went up a lot.

But there is still a chance with the gen 2 with longer range option on the 2017 model, likely available late in 2016, that the LEAF prices will stay quite a bit below residuals.
NMAC will probably keep offering residual reductions on 2014 and 2015.

 

[DuncanCunningham]

That seems like an awful lot and that you should be able to negotiate a better lease than that.
Best to try towards end of month, and negotiate with multiple dealers through email.

But your delta is assuming that you end up paying the full residual at the end of the lease.

That has not been happening on the 2013.

Now Nissan has lowered the residuals quite a bit on 2014 forward, which is why the lease monthly rates went up a lot.

But there is still a chance with the gen 2 with longer range option on the 2017 model, likely available late in 2016, that the LEAF prices will stay quite a bit below residuals.
NMAC will probably keep offering residual reductions on 2014 and 2015.

I was given an example of a lease that is currently on offer. I'm going to look at all the numbers and publish them here for others to help me understand it better. Thanks for your help.