GreenSC4x4

So im not really sure because I have never leased or bought out a lease before is it normal to pay alot more then you would if you just bought it from the start? My father in law is in his sixty's and he's the kind of guy that just goes in, asks for the price and pays it. But here's what happened. He leased a 2015 XLT 2 wheel drive for 2 years... Msrp around 41,000 CDN. He had planned to buy it out but when he went in the total cost of the lease plus buyout would have been 49000. I paid a total price of 40000 for a 46000 MSRP truck everything in ( taxes + financing). Were they trying to screw him?

Ricktwuhk

No idea what they do in Canada, but in the U.S. the lease specifies the price of the vehicle at the end of the lease (residual value), plus a fee that the dealer gets (usually around $500).

lutter5-0

Can you breakdown the cost of the lease, and the buyout price? Like Rick said, buy out price should be preplanned, and is basically a guess at what the market will do. If the buyout is higher than market value, then let em keep it, under market, buy it and keep it or sell it a different way. If buyout is reasonable, the cost of the lease is whats high.

Axxion89

We need more details, there is no way buying a 2 year old lease totals more than the original MSRP. If the lease is over, buyout is the residual and is predetermined. If he still has time on the lease, its residual plus remaining payments. Either the dealer is screwing him to the moon or your father in law isn't telling you the whole story

LoneWolfTrucker

I'd take the truck to another dealership first, and get it appraised.

idrive

iTrader: (3)

It's also possible he rolled over a bunch of negative equity.

Yes, need more details.

Axxion89

Even if he did, you pay it off as part of the lease. It would either all be paid off or almost all paid off, it wouldn't come out to be more than MSRP

I am willing to bet he got priced on a new car & didn't tell OP, only thing that makes sense

GreenSC4x4

So MSRP 41,000. Original lease was 2 years, 4800 down, 179 per month. 24,000 buyout price at the end of the term. No negative equity rolled into the loan. Then when he went back they said to buyout it out was gonna be 411 per month with an addition 5500 down. For 7 MORE years. I wasn't there but that sounds ridiculous.

Iamraiderpower

sounds to me like they want him to just go away so they price him through the roof thinking he will go away to another dealer because he is a lease or he will take their offer like a sucker...

Ricktwuhk

We've got a terminology problem here.

We assumed that the lease is ending, that he leased a brand new 2015 two years ago, and that instead of turning it in, he wants to buy it. The price should be $24,000, plus a pre-specified fee of around $500.

Instead, he's trying to FINANCE the purchase. The dealer is offering a 7 year loan, with $5,500 down. So, if you do the math, and if is the end of the lease, that's a 7 year loan for $18,500, and it's $411 per month for 7 years, which totals $34,524. In short, that's not possible. But it isn't the end of the lease, as you note the "cost of the lease" in your post.

If the lease is truly ending, the buyout price is specified. He should shop around for loans to buy a 2 year old vehicle for $24,000 plus the fee in the contract. In the U.S., that would be 1.99% for 3 years, up to 3.61% for 6 years, at a place like PenFed.