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Negotiating Lease and then buy at end of lease?


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So I've done a little (not extensive) research, and it seems that generally speaking:

1) If you lease, it makes no sense to pay anything down (other than what you're required such as tax, title, registration)

2) Negotiate the purchase price FIRST and then deal with the lease (don't walk in and say I wanna lease).


Assuming the above 2 items are correct:


If the intent was to lease the vehicle and then buy that same vehicle at lease end (my understanding, that would be whatever the Residual is):


How do you know if you're getting the "best" deal?

How does (if any) a trade in affect this? (do you do that before, so you say: X price, less my trade in. Now let's decide if lease/purchase).


My limited understanding is that you'd walk in, and negotiate a price (let's pretend $40k for a fully equipped Edge Titanium, AWD, Turbo, 302b and Driver's assist-MSRP is like 44.5k). No money down. Then any trade-ins.


My understanding is that there is the Money factor (MF), essentially the "interest" rate. Has anyone negotiated a 0% MF? (I can get 0% financing, my FICO is 810). A real 0% (MF 0.0000)


Cap Cost = negotiated price

Cap cost reduction = any monies paid, trade-ins/incentives/rebates

Adjusted Cap Cost = Cap cost - reductions. This is what they use to calculate your payments



Supposedly somewhere in the lease it would give you the Residual Value, and the total of all payments (say, 36 month lease = X /month, plus the MF rates). This supposedly should equal what the negotiated (cap cost) value is? (well maybe a smidgen more depending upon interest rate)?


I'm sorta asking because one of the local dealers had an ad in the paper listing an Edge SEL (not that I would take that trim) and listed the monthly payment, MSRP, and then listed total of payments, and the residual. $0 down. I THINK the MSRP was like 33k (or somewhere around there) and when you took the "total of payments" and added the residual, the total was like $30k or something, which I thought wasn't "too bad".




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The reason for not putting much down is that if the vehicle gets totaled you may not get that money back because the insurance payoff goes to the leasing company. Otherwise it's not an issue especially if you have cash now or a trade-in and you want to lower your monthly payments.


Ford leases have preset terms and conditions as far as I know so you can't really negotiate the MF, etc.


Just think of leasing as just another finance option so yes negotiate the purchase price and any trade-in up front.


If you have more equity in your trade-in than you want to put down on the lease just have them show you as a lienholder and they'll cut you a check for the difference. I've done this twice and used the money to pay off other vehicles.


If you're ordering it's easy - just tell them what you want to order, how much you want to put down, get a trade-in appraisal. Then just compare the trade-in appraisal and monthly lease payments between dealers. If you have X plan or you buy now during friends and family the sale price is fixed so the only variable is the trade-in.

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If you can get 0% financing, there isn't likely to be much incentive to lease and then buy it out. Since the best you can do in a lease is a 0% money factory, the only real advantage is that you defer the tax payments, but with 0% financing, it doesn't really matter anyway. Keep in mind it will be much more difficult to get the 0% financing at the end of the lease because at that point you are trying to finance a used car, not a new one. Also keep in mind there are likely to be some transfer fees when you buy it out, since the ownership has to be changed. Depending on where you live that could result in safety inspections, transfer fees and so on.


I leased my current Fusion because the MF in the lease was 0% and the best financing I could get was 1.5%. Even then, with the residual and everything I will still come out a few hundred dollars worse than the financing would have been, but it did essentially let me spread the payments out over 7 years instead of 5. That gave me the flexibility to pay cash for my second vehicle (a used purchase so no good interest rates).

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  • 1 month later...

One thing with a lease if you are not going to buy the car at the end (there is a $500 fee to do so) is you want to put as little down as possible, $0 drive off is best. Why? At that point you are renting a car for a monthly payment. At the end of the lease turn it back in and you are done. If you are buying it at the end figure you have already paid over $400 acquisition fee and now another $500 to buy it so about $1000 extra that you would not have if you purchased it at the beginning.


Also remember the money factor is not the same as an interest rate. These links can help



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When my 2011 Edge lease was up, I bought back the vehicle and pocketed over 4k$ CDN net (low mileage). I did not have any 500$ fee (Canada different?) and sold it back privately via an accommodation sale through my dealer, but I gave my sales rep a 200$ bonus for his free work as a future investment.


Others have given great advice on buy -vs- lease. The hard thing with leasing is keeping under your allotted mileage, but then you could buy it at end of lease if what they ask is substantial.


You mentioned "X price": does that mean you have the "X plan"? If not, then you also have to walk in to your dealer with a "dealer invoice report". And I agree with others: you do one step at a time. Go in with a purchase story, negotiate that to the max, then introduce the trade in and finally mention lease.

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At that point you are renting a car for a monthly payment. At the end of the lease turn it back in and you are done.

Not quite. At the end of the lease the leasing agency will require the car to be in original condition, less "normal" wear & tear. This could end up soaking you a few hundred more in minor bodywork, glass replacement or other repairs. Usually the dealer will inspect the car and appraise, but the leasee will usually also look at the car when they get it and do their own appraisal. You could hit twice as the leasee (the actual owner) has the final say.

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