Overhaulin'

Do you get a cheaper monthly payment to buy a car after you lease it?

My lease is almost up and I would like to get the car but I want lower payments. If I buy it will the payment amount go down? the car will be worth 7500 after the lease and I am paying 255 a month right now.

Public Comments

1. It all depends on the vehicle, the residual value and the type of loan you qualify for. Here's an example. If you have been leasing a $35,000 car for $350 a month for 3 years and turn the car in with a residual value of $10,000 then that means you have to find a low interest loan for 3 or 4 years to pay off that 10 grand. $10,000 for 3 years at 8% interest is $320 a month. So your payment wont go down by much and it will take you 6 years to pay off the car.
2. In addition to what has been answered already, its usually not a good financial decision to buy out your lease after it ends. History has it where your residual value tends to be a little bit higher then fair market value at the time your lease is over.
3. I've been in automotive financing for many years. What these other guys have said is pretty much true. USUALLY, it is not a good deal to buy out a lease, especially NOW in today's current economic crisis, as residual values and car values have fallen. Sometimes, though--particularly with makes like Toyota or Subaru--cars DO hold their value. The ONLY way to find out is to research Kelly Blue Book, NADA, and Black Book for what they valuate your car to be. Then take it to local car dealers and see what they will give you for it. If any of these figures is equal to or greater than what your lease balance is, then go for it--buy the car out. If your car, however, is currently not worth the outstanding residual value, then you're MUCH better off to get rid of it. The car industry is DESPERATE for business right now, and you will likely be able to find a very good deal on a new car. Good luck!