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I need some lease advise from people smarter than me

PraireBronze

PraireBronze

Member
The lease on my 2011 Infiniti G37 Coupe is up in a week. The payoff is $30k. The trade in value is $22.5k to $25k (CarMax). Retail looks to be about $30k -$32k maximum, although I did just see a local dealership advertising one with identical miles (20k) and features for only $26k. So, from all indications, Infiniti is very upside down on this car and I of course will not be buying if for $30k. My inclination is to just turn it and let Infiniti take the loss.

The rest of the story: I do really like the car. It's in perfect condition and the miles are very low (20k), way under the miles allowed under the lease.

I'm considering asking Infiniti/Nissan to extend the lease. I'm told by the dealership that Infiniti does do this and the payments would remain the same.

I would imagine that only one of these scenarios makes financial sense, but I'm not smart enough to figure it out:
1. Extend a lease if the car is worth more than the payoff.
2. Extend a lease if the car is worth less than the payoff.

The rest of the rest of the story: I really want a Jaguar F-Type coupe. They just came out a few months ago and there will be few if any deals on this car. There are no used ones available yet. There is really nothing else on the market that interests me in a price range I can handle. My thinking is, if I wait a year, I should be able to pick one up that has gone through it's "new car driven off the lot depreciation". Of course, I need something to drive in the mean time and I've got a great car sitting in the garage, but it's about to be turned in unless I extend the lease. Any friendly advice out there? :hmm
 
An important consideration for leasing: is it tax-deductible for business purposes, or is this vehicle strictly personal?
 
Turn it in and drive the mustang and save the lease payment and get a Jag next year using the lease payment you saved as a down payment.

I never lease it just doesn't pencil. I buy and drive 'em until they drop or until I get some trouble I don't want to fiddle with. Leasing is kind of different on a used car.

The good thing about a lease is that if you are in a situation where the car is worth less than you owe on it and you can turn it back in, you don't loose. The down side is you always have a payment.

What ever happened to cash and carry? I rather pay cash for my cars, but when I can't I buy it with as much down as I can and double up on the payments and get it paid off ASAP!

I can't afford a Jag so I drive a F350 and a Dodge.

Just my .02.
 
Oh, Mid, what I used to tell many of my clients years ago and what Dave Ramsey tells everyone is pay for it. Tax deductions are not what they are cracked up to be.

If you have to give a dollar to the tax man or a dollar to the bank what difference does it make? Same dollar is gone from your wallet. the deduction is not a two for one thing it is a one for one thing. The only way it makes sense is if you are going to gain more than you spend.

Mel
 
Any chance they'll come down on the payoff?

Like Mel, I've never liked the idea of leasing. I guess because the dealers love leases so much, I figure it must not be a good deal for me. I also tend to drive my cars til the wheels fall off.
 
I just helped[nb]That is helped negotiate the trade in and the extra stuff the finance dude tries to sell you [/nb] my Mother buy a 2012 G37 sedan last Saturday. It was the dealers loaner car and in very nice condition. The mileage was around 25k and the only option it did not have was the GPS. I think the price was 23k or 23 and change. Silver with black leather interior. Mom keeps saying that she needs to be careful or she is going to get a ticket because it has so much power. I did the test drive for her and it is very nice car.
I would never lease a car, and if I purchase a new car I will keep it for over 20 years or 200k miles.

fd
 
A third option is to approach the leasing Bank and see about negotiating a buy out at current fair market value rather than the "residual value" that was calculated on day one of the lease. A smart banker will recognize that by you turning in the car, they are saddled with the costs of disposing of the car at current wholesale value (dealer auction) whereas recognizing that they make out better profit wise by agreeing to sell it to you for something more than wholesale but less than residual with no costs of sale expenses. Plus, they have the opportunity to continue to have a banking relationship with you for the new loan, if you choose to finance the buyout. Do the math and walk into that meeting with a compelling profit model for the bank to look at.

Note that not all bankers are smart so a "no" response is one of the possible outcomes. In such case, turn the car in and let them stew in their own short sighted juices
 
I leased once. An Explorer the dealer wouldn't negotiate on the buy out I went in person said are you sure you won't negotiate. They said yes. I left it there and walked out. They called the next day begging me to come get it and negotiate. I already bought a new car that same day.

It's easy for people to say pay cash, I am blessed after years of working hard I am lucky I do pay cash. I hate car payments. But it's not that easy.

So I am with Jeff. Offer to but at fair market if they don't budge extend the lease of you have too.
 
"gtscode" said:
I leased once. An Explorer the dealer wouldn't negotiate on the buy out I went in person said are you sure you won't negotiate. They said yes. I left it there and walked out. They called the next day begging me to come get it and negotiate. I already bought a new car that same day.

It's easy for people to say pay cash, I am blessed after years of working hard I am lucky I do pay cash. I hate car payments. But it's not that easy.

So I am with Jeff. Offer to but at fair market if they don't budge extend the lease of you have too.
Click to expand...

It is easy to pay cash if you buy the car you can truly afford. I have a payment on the Dodge, don't like it and am doubling up to pay it off quickly. If I didn't want a payment she could have driven my truck at the time and he Excursion could sit needing a head. That would have likely been the best financial choice. Instead I got impatient and as a consequence I have a payment.

Attempting to negotiate is a great idea. I do see this going the way of a fast talking banker extending the lease. No way would I extend the lease unless they rewrote it with the new market value of the car and my payment went down. A purchase is always more attractive IMHO.

Mel
 
"gtscode" said:
So I am with Jeff. Offer to buy at fair market if they don't budge extend the lease if you have too.
Click to expand...

In this case, would "fair market" be the dealer trade-in value or retail?
 
"PraireBronze" said:
"gtscode" said:
So I am with Jeff. Offer to buy at fair market if they don't budge extend the lease if you have too.
Click to expand...

In this case, would "fair market" be the dealer trade-in value or retail?
Click to expand...

Likely the private party value on KBB or NADA.

Mel
 
I think Mel has he right idea. Not retail and work your way up from trade in or down from private party kbb.


Sent from my iPad using Tapatalk
 
Not sure if it's the same these days, but I always used Edmunds.com for purchase price power. NADA was always the higher value, KBB still high, but Edmunds seemed to be more realistic.

Also, if you extend the lease, is it possible to negotiate a lower payment given that the car has depreciated?
 
"stangg" said:
Also, if you extend the lease, is it possible to negotiate a lower payment given that the car has depreciated?
Click to expand...

I'd like to hear others experience with this, but it's my understanding that this would be considered re-leasing instead of extending a lease. And it's my understanding that dealers don't re-lease, only extend. One would have to find a third party leasing company that would re-lease the used vehicle. The problem I see with this is that somebody will have to pay for the added depreciation that has already occurred, and I'm not going to pay it and I'm sure a third party leasing company won't pay it either.
 
Unless I am mistaken the dealer is usually NOT the leasing company, rather it is a bank or a manufacturer's in house credit company (ie: GMAC, etc). The dealer has no financial interest in extending your lease or anything other than selling/leasing you another car so they may not be the right people to be talking with. Some might suggest that they have a conflict of interest in "representing" the leasing company in negotiations with you.

The leasing company is generally not set up to recondition and resell your lease return so the value to them is strictly wholesale less the cost to them of the auction fees they pay to dispose of the car on the wholesale market. The residual value for buyout at lease end in a closed end lease contract is irrelevant once you turn the car back in. Even a modestly bright manager can see that the most the leasing company will make at auction is wholesale value. Making a bit more dealing directly with you, the leasee, should generate some additional income for the leasing company, and to the manager if they are compensated on a performance basis.
 
You need to talk to the people you pay your payment to.

The dealer has nothing to do with it.

You want to talk to the highest ranking person you can get to. The the drone that answers the phone what you want to do and they will transfer you to the correct department.

In person is hard unless you got your lease from a local bank and even then the local branch may not have any say. The main financing branch would. For example our little credit union was bought out by a much bigger credit union in the East. Even the VP I used to go to has little authority.

Sometimes I will ask the person on the other end if they have the authority to say yes.

Mel

Sent from my DROID RAZR HD using Tapatalk 2
 
You guys are absolutely right that it's not actually the dealer. I was using the term to keep things simple, but it's Infiniti Financial Services (IFS) that has the lease.

It sounds to me like there is no one at the local dealership that has any authority to do any negotiating. And that the local dealership wouldn't care if I pointed out that they would lose less money selling the car to me at a discount than if they took it and sent it to the auction. Yet someone in this thread mentioned the dealer called the day after he turned in his lease and begged him to buy it. So there is a bit of contradiction there that I don't know what to do with.
 
I think that situation was after the car had been turned in already. If I were you, Monday I would call bright and early, IFS and ask some very pointed questions in order to find the qualified individual to negotiate with.

Mel
 
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