Negotiating End of Lease Purchase

[Dannymack]

I was curious how to go about negotiating with the dealer about the purchase of my FFE at the end of the lease. The agreed upon amount in the lease itself is just under 17k which basically comes out to the same payment I'm making on the lease so there would be no change there. I know that currently you can get some good deals on the FFE if you can find one, but I am only 18 months into my 36 month lease.

The main reason I am wanting to keep the current car at the end of the lease is that I am about to get my free HOV pass from the state. The problem with the pass is it cannot be transferred between vehicles. So once I get rid of the leased vehicle I have to give the pass back and end up on a waiting list again which is over 1000 people. The state only has 2000 total permits and it would be a huge savings to my wife for her work commuting to have the free pass.

Anyways are there things I can do as time gets closer to see knock down my purchase price, or am I basically out of luck unless there is some deal happening with the current FFE at the time that I could use as a comparison?

 

[michael]

I will be facing the same problem about the same time you will. My impression is that I can get a new car, after discounts, incentives, tax money, etc. for pretty much the same as I would need to pay to buyout my lease (high teens) and the car will then have almost 60K miles. I don't think it makes sense to buy the old car.

You still have over a year or more to run...I'd worry about it then. Perhaps there will be more capable cars available then, or perhaps Ford will have developed a more realistic approach to buying out leases than sticking to the original residual. But at present, you wouldn't be negotiating with the dealer, but rather with Ford finance and whatever are their policies.

 

[hybridbear]

I will be facing the same problem about the same time you will. My impression is that I can get a new car, after discounts, incentives, tax money, etc. for pretty much the same as I would need to pay to buyout my lease (high teens) and the car will then have almost 60K miles. I don't think it makes sense to buy the old car.

You still have over a year or more to run...I'd worry about it then. Perhaps there will be more capable cars available then, or perhaps Ford will have developed a more realistic approach to buying out leases than sticking to the original residual. But at present, you wouldn't be negotiating with the dealer, but rather with Ford finance and whatever are their policies.

When does your lease end? Our lease ends in August 2016. I hope that there will be many more BEV options by then. If the Bolt is close then I might ask Ford if we could extend our Focus lease an extra 12 months or something while waiting for the Bolt.

 

[michael]

Almost exactly same as you...September 1, 2016. Unless something better comes along, my present plan is to replace the FFE with a Volt 2, and then replace one of the other Volts with a BEV when something suitable comes along. I suppose the BMW with extender might be an option. Even though the FFE has served me very well and continues to do so, I don't want another 80 mile BEV.

My friends have a RAV-4 EV and I covet the range they enjoy, however I really don't want so large a car. FFE size suits me very well.

 

[hybridbear]

Almost exactly same as you...September 1, 2016. Unless something better comes along, my present plan is to replace the FFE with a Volt 2, and then replace one of the other Volts with a BEV when something suitable comes along. I suppose the BMW with extender might be an option. Even though the FFE has served me very well and continues to do so, I don't want another 80 mile BEV.

My friends have a RAV-4 EV and I covet the range they enjoy, however I really don't want so large a car. FFE size suits me very well.

I also don't want another 80 mile BEV. In the winter we have been cutting it close way too often on Fridays (the day we do the most driving). I don't like having to be worried about how much we can run the heat or how many miles we're driving on Fridays. We've been fortunate this winter to have minimal snowfall which lessens rolling resistance on the road and lessens the need for heat, but it's rare that we don't either have to find public charging on Fridays to get through the day or we arrive home with less than 5% battery remaining.

I would take a RAV4 EV if it were sold here. I'd take a BEV with 1.5 times the useable HVB capacity. I don't want to go the way of the Volt 2 because that EV range would be way to short for our normal weekly use. I also don't want the maintenance of having two PHEVs, I'd rather have one PHEV & one BEV. The BMW is definitely beyond our price range. Another FFE is an undesirable option. I think a Soul EV would be our first choice if the Bolt or Leaf with 150+ mile range isn't available yet then.

 

[michael]

I see little hope the Bolt will be ready by then. Leaf, I have no idea about, but I've seen so many people burned by it's battery barbeque system that I wouldn't be eager to give it a try.

RAV4 was available only in California, and the last of them have been sold. Toyota is now in the fool cell camp.

Soul is a possibility but after the amenities of the FFE I don't think I would be happy in one. And from what I read, its range advantage isn't really all that much.

From what I've been reading on the BMW I3 board, people are getting surprisingly good prices, but mainly on the BEV version. The initial flurry of sales is over, and many dealers have dozens in stock unsold. I have the impression that the BEV version of the I3 does very poorly in the cold, we are quite possibly better off in our FFEs.

So what does that leave?

Hope I'm not a Dolt...

 

[triangles]

I wouldn't hold my breath about being able to negotiate the lease buyout price. My friend recently tried to do this with his leased ICE car. The dealer wouldn't budge because when the vehicle goes to auction, the dealer has insurance that will pay them the difference if the car doesn't sell for the lease buyout price. Basically the dealer is guaranteed the buyout price regardless of who gets the car. I don't know if all leases are like this but I would imagine they are. I hope I am wrong and someone corrects me.

 

[michael]

I wouldn't hold my breath about being able to negotiate the lease buyout price. My friend recently tried to do this with his leased ICE car. The dealer wouldn't budge because when the vehicle goes to auction, the dealer has insurance that will pay them the difference if the car doesn't sell for the lease buyout price. Basically the dealer is guaranteed the buyout price regardless of who gets the car. I don't know if all leases are like this but I would imagine they are. I hope I am wrong and someone corrects me.

As I understand it, the dealer generally has no interest in the outcome of a lease return. They are simply acting as a agent for Ford finance who is the owner and gets stuck dispositioning the car.

The exception would be when the car is worth more than the residual. In this case, they dealer may offer to buy the car from the lessor (Ford) in expectation of being able to sell it at a profit as a used car. In the case of EV's, this isn't going to happen.

 

[EVA]

Not how to negotiate the price - here's and article about how much electric cars have taken a beating on the used car market:

http://www.wsj.com/articles/resale-prices-tumble-on-electric-cars-1424977378

"The depreciation rate on plug-in electric cars is nearly twice that of a comparable gasoline-engine car, NADA Used Car Guide found."

 

[jmueller065]

Makes you wonder if Ford had expected that: another reason why they don't push the FFE that much as they don't want to take a bath on all the lease returns.

This statement in the article isn't true though:

With gas prices down 33% from a year ago, and buyers cooling toward electric vehicles, some auto makers are offering deep discounts or attractive leases on battery-powered vehicles and plug-in hybrids.

Pure EV sales have not suffered a drop even with low gas prices source

 

[michael]

Those Wall Street Journal readers absolutely hate EV's. It's interesting to read their comments

 

[jeffand]

If you purchase a EV the resale value isn't that important, if you keep the car for 8 years or more. The depreciation of the vehicle is steeppest during the first 3 years of ownership. The reason for high loss in value is all the goverment incentives that push down the actual cost of the vehicle. So the article is flawed because it doesn't take into consideration the goverment insentives. It's actualy misleading it's readers into thinking that EVs are a poor value.

 

[Snowman]

I agree. I purchased my FFE cause the numbers just worked that way. At the time they were offering the $4K discount and 5 years 0% interest. That made my purchase price $15K after both MA ($2500) and Federal ($7500) rebate / tax credit. That made my payments $250 / month which was exactly what the 3 year lease would have been. So after 3 years I will still owe $6K which I'm willing to bet the car will be worth. Of course I plan on keeping it 5+ years so resell isn't a factor for me.

 

[twscrap]

I have the impression that the BEV version of the I3 does very poorly in the cold, we are quite possibly better off in our FFEs.

i3 is no worse in the cold than the FFE.

 

[Josephus]

If you are already in a lease, the lease end purchase price is already set and signed by you as the "residual value". The only thing that would affect this is damage, or excess miles. Neither the leasee, nor the dealership can negotiate this price. It is set by the manufacturer based on the amount of miles agreed to be used.

 

[EVA]

Well a small point - I'm pretty sure the residual value is set by who ever leased the car to you. That could be Ford. That could also be a lease company. That could be the dealership.

 

[v_traveller]

I was curious how to go about negotiating with the dealer about the purchase of my FFE at the end of the lease. The agreed upon amount in the lease itself is just under 17k which basically comes out to the same payment I'm making on the lease so there would be no change there. I know that currently you can get some good deals on the FFE if you can find one, but I am only 18 months into my 36 month lease.

The main reason I am wanting to keep the current car at the end of the lease is that I am about to get my free HOV pass from the state. The problem with the pass is it cannot be transferred between vehicles. So once I get rid of the leased vehicle I have to give the pass back and end up on a waiting list again which is over 1000 people. The state only has 2000 total permits and it would be a huge savings to my wife for her work commuting to have the free pass.

Anyways are there things I can do as time gets closer to see knock down my purchase price, or am I basically out of luck unless there is some deal happening with the current FFE at the time that I could use as a comparison?

Only once was I able to "negotiate" a better buyout at lease termination than the agreed-upon residual. It was a '99 Altima, a 60-month lease with a $9K residual. I got a call from Nissan and was asked if I wanted to keep the car, and I said yes. She stated the residual value (was $9K or so), and then there was silence. So I said the Blue Book wholesale was $5600, and that I'd buy it for that. She came back at $6600, and reminded me that by keeping the car I wouldn't have to pay the disposal fee, nor for the $250 dent in the fender. I said $6K, and she said that she was only "authorized" for $6600. So I ended up turning it in, then leased a '05 Altima a few months later.

Bottom line is that I don't think it was a negotiation; I think she was authorized to communicate a specific reduced price.

I tried to buy out a '08 Hummer H3 at lease end... residual after 2 years was about $32K, and I mentioned to the GMAC guy that called that I'd buy it for wholesale Blue Book of $27K. He said no. I asked if he was authorized to offer a reduced buyout, and he said "Not on the Hummer".

So when the time comes and you're contacted by Ford Credit (assuming they are the lessor) about your intentions, my thought is that it doesn't hurt to ask.

My lease is up in 11 months, I'll ask Ford Credit about a reduced buyout when they contact me in December and let you what they say.

 

[jeffand]

I'm wondering if they allow extensions of lease contracts?

 

[v_traveller]

Out of curiosity, I just called Ford Credit... rep said that they can do a one or two month extension on request. She said they can do longer if you have another Ford on order that will replace the lease return.

 

[hybridbear]

Out of curiosity, I just called Ford Credit... rep said that they can do a one or two month extension on request. She said they can do longer if you have another Ford on order that will replace the lease return.

Thanks for this information. We'll keep it in mind.