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Buy A Car At The End Of Your Lease
You've come to the end of your rent and you like you car enough you want to keep it in the driveway. Just like buying a used car, there is some research to be done to nail a good deal.
First, you need to know the cost of buying out your rent. Read the fine print of your contract and look for the 'purchase option price'. This cost is set by the leasing company and commonly comprises the residual value of the car at the end of the lease plus a purchase-option fee ranging from $300 to $500. When you signed on the dotted line, your monthly payments were calculated as the difference between the vehicle's sticker cost and its estimated value at the end of the lease, plus a monthly financing fee.
This estimated price of the car value at the end of the lease is what is termed in leasing jargon 'residual value'. It is the expected depreciation or loss in value of the vehicle over the scheduled-lease period. For example, a car with a sticker price of $40,000 and a 50% residue percentage will have an estimated $20,000 value at let end.
Now that you know the cost of buying out your lease, you need to determine the actual value, also termed 'market value', of your vehicle. So, how much executes your car retail for in the market? To pin down a good, solid estimate you need to do some pricing research. Check the cost of the vehicle, with similar mileage and condition, with different dealers. Use online pricing websites, such as Cars, Edmunds and Kelly Blue Book for detailed pricing information. Gleaning pricing info from several sources should give you a fair estimate of your vehicle's retail value.
All you have to do now is compare the two amounts. If the residue value is lower than the actual retail value, than you're into a winner. Unfortunately, there is a good chance a car coming off a let is a little on the high side.
Don't despair though. Renting companies know as much that residual values on their vehicles are greater than their market value and as such are always on the look out for offers. You can knock down on the toll of your rented vehicle with some smooth negotiating tactics. Put forward a toll that is beneath your actual target and negotiate difficult until you wind up near that figure.
About the Author Uchenna Ani-Okoye is an internet marketing advisor For further reading please check out: Best Mortgage Loans
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