Therefore, you owed nothing at the end of the lease. Hence, they only had to worry about your last payment, which, if I'm not mistaken, you don't pay on leases. At least that how it works with Chrysler, Jeep, Ford, Lincoln, Mercury, and Nissan in NY. Not sure how it goes in FL. But I'd imagine it's a similar setup. So, in essence, you turned a car in. You didn't "trade" it. My next question is did you turn it into an Infinity dealership or was it a competing manufacturer. Because, along with Lease Loyalty, some manufacturers offer a rebate or bonus cash if you're coming out of a competing company's vehicle. Another question I have, do you get the title to leases in FL? I know in many north eastern states, you do not. Hence, you don't own the car. Therefore, you can't trade it because it's not yours. But, FL may be different. Is it?

 

@ Driftsucky:

I don't think you're too clear on how it works.

If you satisfy the payoff by trading the car in, you are freed of any and all obligations. Satisfying the payoff can be done by you buying out the car, or by the dealer taking in the trade buying out the car. It makes absolutely no difference to IFS; if you buy out the car, mileage doesn't matter, just how when the dealer you're trading into buys out the car, mileage doesn't matter.

By satifying the payoff, you have fulfulled your obligation to the lease contract.

The question is, are you gonna take the bigger hit trading in, or by paying the mileage penalty.


We do this ALL the time.

 

Thanks for the replies, and thanks Mike for the clarifications.

Seeing as how at the end of my lease:

* I will be 26,000 miles over the contracted amount
* My car will be worth far less than the residual
* I'd rather not come up with $3900 all at once

I'm probably just going to purchase it at lease-end, hopefully for a little bit less than the residual amount.

Mike, can you clarify something else for me. When I purchase it at lease-end, it's going to be a 39 month old car with 65,000 miles. Is that something that you guys would even keep on the used lot, because it'll have so many miles? Will that work in my favor in terms of trying to negotiate a little off the purchase price?

 

THanks for the advise. I didn't know it work that way. My lease is up this May. I will see if they will lower the buy off price. It is currently set $21,000 buy off.

 

Yeah. That's what I said. Paying off the car. I.E. paying the car's residual value, trading ownership from Infiniti to the purchasing dealership. Paying off the lease, I.E. simply the remainder of payments, isn't the same as paying off a car. I'll take out all the words and try to explain this so people can stop telling me what I've said like 3 times.

PAYOFF= $21000 (nothing owed to Infiniti)
Remaining Lease Payments= $7500 (overage miles owed to Infiniti)

Get it? Maybe?

 

Riverside typically does not keep cars out of warranty; other lots may differ.

 

Just to keep everyone updated, my lease was going to be up in May so I purchased the car 2 weeks ago. I'm so far over the mileage it's ridiculous; I'm at 65,000 right now and the contract was for 39,000 (I had a much shorter commute when I leased the car). I had no negotiating room since there was no way I was going to pay $4000+ to walk away from the lease. I bought it for around $21500 but at least the financing was really good (picked up by Infiniti).

At this point I'm driving about 25,000/year so I'm probably gonna get a used small beater pickup truck that I can use for commuting and hauling my sportbike to track days. Maybe I'll go Toyota if I feel like unintentionally accelerating. This way I can keep the miles off my G so I can salvage the resale value for later on; I just wish I had done this well before I reached the contract mileage so I could've just turned it in. Oh well.

 

I read on the internet peopel are paying .10 cents a mile overages (as opposed to .20) and are finding ways to null the mileage overages because they refuse to pay them. are either of those valid? these are on various forums on the web.

also if you pay the overage on the miles do you have to pay for other wear and tear related items, like brakes or tires, or is that factored into the fee for paying for excess miles. most of the time if you turn a car in with 30k miles, it will not need new brakes or tires but if it has 60k you already paid about $6 grand in overages (.20 x 30k miles) so they could replace the brakes and tires using these fees or do they hold you responsible for an additional amount?

lastly, how many people have success renegotiating the buyout amount? I realize that in 3 years my g37 will have an auction price of about $18g AND THE LEASING COMPANY WILL LOSE MONEY AT AN AUCTION. so paying $24g buyout is about the fair retail price but i'm sure i can buy the same used car for less if i really wanted to, save the principle that I would rather drive a car who's driving history I am responsible for rather than someone else's abused car. what is the probability I can buy the car out at a wholesale price as opposed to a bull**** overinflated residual price?

in other words, if I buy the car at 24g and trade it in the next day i'll get the black book value in fair condition (16-18g) this is what the leasing company will sell it for at an auction and lose money, can i convince them to sell it to me at the actual price, aka the auction price/trade in value?

or at least split the difference?

 

You are bound by your contract to pay for mileage overages. Refer to your contract for your specific rate, as they have changed over time.

You can attempt to negotiate the price difference between your residual and auction, but remember that auction is a wholesale price which you do not have access too, while the residual is a retail price. Contrary to popular belief, the general public will never have access to wholesale prices. Otherwise, it would just be a public auction that anyone can enter, without the proper licensing and bonds. Also remember that auction cars do not necessarily meet safety and tech inspection guidelines; these can vary by state.

The leasing company has no problem losing money; it is just a write off to them. In the case of some brands, dealers are required to buy X number of off-lease cars anyways, so its not the loss that you think it is.

 

thank you for responding mike. are you the same mike from myg37.com?


I don't expect to get the wholesale/auction price but something in between. maybe $2-3 grand less than residual, compared $5-6 grand less at auction.

it's funny how the general population has no access to auctions to BUY but have to be subjected to auction prices when it comes time to TRADE.

i hate the auto industry so much..

 

Buy low sell high. Dealers are not a non-profit organization.

Also, your car, as a trade-in, is not in retail-able condition. It still needs to be inspected to meet state and/or federal safety and tech inspections. E.g. in California, if tire tread or brakes are under a certain level, they must be replaced with new tires and/or brakes, even though they are still perfectly good and probably have a decent amount of life left in them.

Consider this.

Dealer buys car at auction. Dealer has car delivered to lot (cost). Dealer needs to inspect the car (cost). Dealer needs to recondition car; auction cars are often straight from trades. The car will need to be cleaned, any damages repaired, interior reconditioned and cleaned, smoke smells taken out, etc. (cost). Car needs to have basic service done (cost). All wear and tear items need to be replaced to meet local regulations (cost). Car is then ready for sale. Car sits on the lot, depreciating in the meantime, and dealer pays flooring on the car; most dealers do not own the cars outright, and cars do not sell instantly. There is no grace period on flooring cars (cost).

Dealer also needs to be licensed for retail and wholesale, as well as carry insurance, bonds, etc. (cost).

You can see where that "5-6k difference" is quickly whittled down to very little. Why do you think the number of dealerships is steadily dropping? Most consumers just see dealers as the evil entity that is out to make as much money as possible, but in reality, dealer margins are much lower than in other retail markets. A new car, sold at sticker, typically has a gross profit margin of 6-7%. How often is a sale made at sticker? Now, look at Costco for example. Their profit margin is between 14 and 17%. Your average fast food place has a gross profit margin far higher.


And yes, I'm the same mIKE

 

I should add, it never hurts to TRY to negotiate. As long as you make a strong case, you may be able to get somewhere.

 

I realize the dealer has a lot of expenses but for things like inspections and cleaning they already have a staff of techs who get paid hourly so if they sit around not doing anything or inspecting cars, the dealership doesn't incur any additional cost beyond their usual budget for labor. If the technician inspects 2 cars a day or 4 cars a day it's the same bottom line. Same can be said with cleaning/detailing the car and other services. Labor is already factored into other tasks employees perform so adding more workload to the employees doesn't necessarily mean the dealership will have more expenses, only more disgruntled employees.

I also realize dealerships make smaller margins, but they do sell $30,000 cars, not $3 loafs of bread. I assume new cars sell on consignment basis or the dealership only pays interest/depreciaton on the cars while they hold them, maybe a few hundred dollars a month and the average turn around time is 30-60 days, in which case, the dealerships profit margins are actually MUCH higher than judging off MSRP.

Even if they don't make a lot of $$$ selling new cars they make up for it in services. I shudder to think how much money a dealership makes if they charge $500 for a 30k service, $80 for an oil change and $200 for a corroded battery cable. Routinely servicing hundreds of cars a month is reason enough to pump out as many cars as possible below dealer cost.

But anyway, statistically, do you think i could renegotiate the residual or is it hopeless. I would only consider buying the car if the residual is lowered then it would be a good deal but if not, that's okay i'll look into something else in the future or maybe buy someone elses used car in the same condition as mine for less money and more options if applicable. Great deals are everywhere.

the only reason i got piqued is because one guy in this thread said he renegotiated 2 grand off his residual.

 

Techs are not paid hourly. They bill per hours of work done based on a standardized system, regardless of how long it actually takes them to do the work.

6% on a 30,000 dollar car is 1800 dollars; 7% is 2100. Did you get more than 2100 dollars off when you purchased your car? Now, what's the dealer's margin on that car?

The car manufacturer does not consign cars to dealers. In fact, the manufacturer for the most part cares less about the dealers than the customer does (and most customers do not care for dealerships at all). "holdback" which many websites refer to, but not actually disclose, is a subsidy from the manufacturer which theoretically is to cover 60 days of flooring, which should be the average turnaround time on a car at a well managed dealership.

I don't know where you service your car, but the dealers in so-cal do not charge anywhere near the price you quoted for services. Riverside Infiniti charges $50 for a blended synthetic oil change. Given that the average tech is paid 20-30/hour, how much margin does that leave the dealer?