You have reached the end of his contract and he likes his car enough you want to keep it in the driveway. Like buying a used car, there is some research to do to catch a good deal.
First, you need to know the purchase cost of the lease. Read the fine print of your contract and look for the “purchase option price. This price is set by the leasing company and usually includes the residual value of car at the end of the lease plus an option fee of purchase ranging from $ 300 to $ 500. When you signed on the dotted line, your monthly payments are calculated as the difference between the sticker price of the vehicle and its estimated value at the end of the lease, plus a monthly fee of funding. This price estimate of the value of the car at the end of the lease is what is termed in leasing jargon “residual value”. Is the expected depreciation – or loss of value – the vehicle during the lease period provided. For example, a car with a sticker price of $ 40,000 and a residual percentage of 50% will cost about $ 20,000 at the end of the lease.
Now that you know the cost of buying your lease, it is necessary to determine the actual value, also called “market value” of your vehicle. So, how much does your car retail market? To specify a good solid estimate you need to do an investigation of price fixing. Check the price of the vehicle with similar mileage and condition, with different dealers. Websites pricing for online use detailed pricing information. Cherry pricing information from various sources should give a fair estimate of the sales value of your vehicle.
All you have to do now is compare the two quantities. If the residual value is lower than the actual sale, you’re a winner. Unfortunately, there is a good chance a car coming out of a lease is a little on top.
Do not despair if. Leasing companies know everything that the residual value of their vehicles are higher than their market value and as such are always looking for deals. You can lie on the price of your leased vehicle with some smooth negotiating tactics. Submit a price that is below your actual target and negotiate hard until after close to that figure.