3rd Party Lease Buyout

[evert9]

Hi All -

I'm new to these boards and this will be my first post so I hope I'm following all of the rules.

I'm in love with my mom and dad's '04 ES330. It happens to be in the right price range for me if they choose to buy it outright at the end of their lease (June). We've contacted Lexus and they said that they are willing to work with us to do a 3rd party lease buyout.

Fast forward to financing. Just to preface the next few sentences: I have no idea how this works since I've always leased new. Up until last night, didn't think that I could finance through Lexus so I applied through E-loan and Capital One under "used - dealer purchase" rates. I guess I was wrong on that one and didn't realize there were special rates (higher by at least 2%) that they don't post on the site for this type of thing. Capital One won't even touch it so they are out of the running.

Have you ever done a 3rd party lease buyout? How did the financing work? I'd hate to drive all the way to Cleveland (I'm in Columbus) to make the deal and then there are surprises). Was it all done through Lexus?

Thanks! Trisha

[kaosfive2005]

typically lease buy outs arent the best considering how much the vehicle is..the pro's is you know how well or not well the vehicle was maintained by your parents, and lease owners typically must keep car in top shape so they dont get slammbed with reconditioning/ wear and tear fee's etc...the con is the price of the vehicle, possibly if no downpayment was made, the way leasing is your not actually payin full price for the car, so to buy it out the vehicle owed may be more than the vehicle value..but you stated you leased before so im sure this is not new to you..hope everything works out but as far as financing cant recall any

[evert9]

vehicle owed may be more than the vehicle value

Thank you! The buyout is actually $20,000 and the resale would be about $25 - $26K so I think I'm okay there and am getting a good deal, no? My parents put down a chunk of money up front.

[SW03ES]

Yeah if the buyout is $20k and the value on the street is $25-26k thats a good deal. Check around though, $25k-$26k sounds high for an 04 to me. I have an 03 and mine is worth about $18,000, it has higher miles than your folks' I'm sure but I'd be surprised if you had to pay $26k for an 04, even a certified one. Even if the price is about what one would cost on the street, its still probably a good deal because you know the car's history.

As for financing, in general lease buyout financing sucks in terms of rate. Do your folks have some cash? I'd ask them to buy the car and then buy it from them and finance it as used. You'll likely get a better rate. Capital One's rates are ESPECIALLY bad on lease buyouts which is weird since their other rates are good.

kaos, this used to be true, but for the most part leasing companies have gotten the residual value and buyout to be pretty in line with market value. The amount of money someone puts down on a lease has NO bearing on the residual value or the buyout, it simply prepays a portion of the lease cost.