bad00

This is my first lease, My plan was to lease, keep the car in excellent condition with low miles, then when my lease runs out, just purchase the car. My question is, is there any benefit to returning the car with low mileage,( very low 16,000) as opposed to having the the maximum aloud mileage for the lease. I thought with the condition of the car and low mileage I would be on top if I decided to change cars or refinance. Now I don't know if it will be worth it to purchase the car or should I just find a 2002-03 six speed Se for just a little more than what I owe.

Any suggestions would be appriciated.
Thanks.

Chris91SE

iTrader: (1)

I don't think you get the credit for the mileage below the allowed. It just doesn't work both ways if you know what I mean. Buying out depends on the residual value of the car. If the buyout is more than what the car's worth than it's not worth it but if the car is worth more than the buyout then you're good to go. The only way I would lease is if I plan on getting a new car every 4 to 5 years. Leasing w/ an intent to buy always seemed backwards to me. Then you have a payment after 5 years (if you have to refinance) on a car which will rapidly depreciate from that point.

bad00

Thanks, Chris.
On the residual value of the car, Won't low miles add to value of the car? Also the lease was for 3 years. I figured that I would finance the for about two to three more years. This works out to be about 5 years. I owe about $ 15,000 and the car value will be about the same.
Paid over $ 28,000 OUCH!!!
Anyway thanks again.

njmaxseltd

iTrader: (19)

My lease buy out and the current market value of my car were right on.

So I baught it.

kratz74

No benefit to you to turn in lease car with low miles. If you keep it-you get a better deal b/c the car's worth more b/c of the low miles. Leasing is generally not a good deal. Tends to attract people who otherwise couldn't afford the payments if they bought it. There are tax advantages if you are a business, but that's about it.

maxhead

I bought mine too and the values were right on. But...I've heard horror stories of dealers making the residual too high. Most residuals on 36-42 month leases should be in the $12 to high $13K range. I think a residual of $15K is pushing it. Be careful with that.

Also, if the residual is a lot lower than the trade-in value, or if your low mileage gives you a higher value you can trade the car instead of returning it. If it works out like that, you can theoretically use the difference towards the purchase of a new car. Having a "trade-in" value lower than residual is doubtful, but that's another option for you.

2DMax

iTrader: (2)

Not unless it's written in the contract, and you specifically have to have it added when you sign it.

maxhead

Which comment are you responding to? The tax deduction for business use or the residual value one?

bad00

I should break even, I will owe about what the car is worth on trade in..But atleast I know what I'm buying!
Thanks.