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Ray 09-17-2010 05:56 PM

Return or buy out at the end of lease?
I been going back and forth on what to do when my lease is up. I have four years left on a five year lease. The reason why I want to make a decision now if I am going to buy it out in the end is because of mods. I put a decent amount of mods on already and would like to do a ton more. I just don't want to keeping dumping money in the truck if I am going to return it. Spoke with the dealer today and the buy out is 12 grand. Does that seem good? and looking for some feed back. Are most guys buying or leasing your trucks and what would u do if in my position.

erm 09-17-2010 05:59 PM

When do you have to make the decision? The decision is usually made within 90 days of the lease end and is based on market value of the vehicle at that time, not at the front end.

Let's just say in 4 more years, the truck is worth $8K. Would you spend $4K more to buy it out? I wouldn't.

With respects to the mods you have, you can take the hit and leave them on or pull them off (if they aren't permanent) and sell them on craigslist or eBay for some change. They won't be worth as much as you paid for them but that's normal.

Good luck!

RootBeer 09-17-2010 06:11 PM

Michael makes good sense. Personally I've never liked the whole lease idea because at the end you don't own the vehicle unless you buy it out. More often than not the buy out is far more than the vehicles worth, plus you end up with a 5 year old vehicle.

Were I in your shoes, I wouldn't put another dime in the truck you have and instead put it in the bank and don't touch it. When the lease is up, just turn it in and buy a truck.

erm 09-17-2010 06:14 PM

Oh yeah...a couple more things.

Don't try to negotiate the buyout down after you've signed the lease...they'll just laugh at ya. When I've leased in the past, I've tried to negotiate the residual down at the time we are putting together the deal. Sometimes I've been successful My argument to support a lower residual is the fact that there is no credit for depreciation as they figure residual as follows:

New Truck Value - Total Lease Payments & Deposit = Residual.

In some cases, it may be:

New Truck Value - Total Lease Payments & Deposit - Estimated Depreciation = Residual.

Some leasing companies may include depreciation in the calculation but even then, it's never close to actual depreciation you see in the market. It is worth the shot, though.

If the truck is only worth $8K, no one will loan you $12K to buy it either.

GTyankee 09-17-2010 06:27 PM

I agree to a point with everyone else, but, with 4 years yet to go, you could do what you want to your truck, as long as its just bolt on mods & remove those parts when you turn it in.
I don't think you want to make all the lease payments and then give them another $12,000 on top of it
it would almost be better to turn the truck in at the end of the lease & buy a 2016 brand new truck, they MIGHT even give you some kind of a special deal if you buy the 2016 through them

Ray 09-17-2010 06:28 PM

The buy out would be at the end and I would be paying the residual value witch is the 12 grand. I love the truck and want to add a lot of stuff to it. If I stop with the mods I have now I can take them off at the end without a problem. If I don't go any further, I know 4 years will be a long time not to touch my truck. I was looking into doing a cai,exhaust,diablo, and upgraded to ren radio with a back up cam.

erm 09-17-2010 06:29 PM

With the exception of the exhaust you can pull all those mods. You just need to have stock replacements so keep your original stuff!

RootBeer 09-17-2010 06:37 PM

Here's my point. You are leasing the truck for 5 years. This means for all the payments you are making you don't own the truck after 5 years.

At the 5 year point if you buy it, you'll likely finance the 12k which most folks do. Most will finance that 12k for 4 or 5 years.

In five years will finally own a 5 year old truck and be making payments on it for a total of 9 or 10 years.

The estimated 12k will most likely be well more than the truck is worth at that time. Just hit and play with the numbers using your truck as a model on 5 year old trucks.

Most if not all of the mods you want to do will not fit on a new Ram that far down the road and you'll only be able to sell them for pennies on the dollar because you won't be able to offer them as new with warranty.

Ray 09-17-2010 06:42 PM

So far you guys are making some good points. I was thinking the same thing of what the value of be truck would be in 4 years and whAt I would actually be paying. The dealer already told me that there are no deals. You pay what's owed on the truck and that's that.

RootBeer 09-17-2010 06:44 PM

Have the dealer or lease agency give you an amortization schedule showing how much of each of your payments is going toward the "principle" ie the cost of the vehicle. That will give you a good idea of what you're really going to be looking at in 5 years.

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