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Lease buyout fee?

post #1 of 14
Thread Starter 
I went with my mother-in-law last night to the car dealer, her 3 year lease was up and she wanted to pay the buyout and keep the car. The dealer charged her a $500 "buyout fee". Of course it was not marked anywhere on the invoice I just noticed that the amount was $500 higher than the buyout specified on the lease agreement. I pointed out the difference to the finance guy who poorly tried to explain it. When he saw he wasn't getting anywhere he brought in the sales manager.
We spent about 10 minutes talking to him and learned, I think, that all dealers add a lease buyout fee, it's not mentioned on the lease deal AND it can be any amount. Standard practice is $500 but he's heard of $1,000 - $1,500.

Has anyone ever seen or heard of this or am I getting hosed?
post #2 of 14
Unless its noted on the original lease contract, that is the fee that the dealer is charging you.

You should not pay it.
post #3 of 14
Now if you read the original lease contract it is highly likely that the original leasing company has a purchase option fee listed. And that you have no choice , you have to pay it if you want to buy the car.
post #4 of 14
Quote:
Originally posted by JT:
it was not marked anywhere on the invoice
Nope, doesn't sound good.........
post #5 of 14
Doesn't sound right to me either if it's not specified in the lease agreement. Sounds like the dealer wants to make a few bucks for handling the transaction. I would call the lease company myself, even if it's through the manufacturer, and ask what the deal is. If you pay direct, you may be able to bypass the fee fromt he dealer.
post #6 of 14
Thread Starter 
The view was that if you don't want to pay the $500 then don't buy the car, we'll (the dealer) take it and sell it.

JohnE, That's what I'm going to do but some of the information I received last night was that the leasing companies, ours is the manufacturer, only take buyouts from the dealer. They don't want to mess around all the retail mess, tax, tags, etc.
post #7 of 14
I am on my fourth lease and never heard or saw any such BS.
Do yourself a favor and find another dealer.

I can't think of a bad enough word to describe car salesman.
post #8 of 14
Not sure where your at at this stage but for another $500, I'd let the dealer eat that car. Not for nuthin but look closley at the buyout, most of the time it ain't such a great deal anyway.
post #9 of 14
You don't have to return a leased car to the dealer that you got it from. Contact the leasing company, get some other dealers and see what happans. Usually they don't say much of anything (hey buddy, want another car?), but in a couple weeks you get a bill for excess mileage, poor condition, etc. Or hopefully, you don't. But that shouldn't happen in your situation.

Do you really have to return to a dealer if you are keeping the car? The one and only time I did a buyout, I mailed a check to the leasing company and got a title along with a nice letter telling me to turn in the plates.

[ 07-11-2003, 09:04 AM: Message edited by: Triet ]
post #10 of 14
Quote:
Originally posted by SteveC:

I can't think of a bad enough word to describe car salesman.
I'm glad last Thursday was my last day as a car salesman

If you don't mind me asking who is the lease with?
Most banks theses days will do anything they possibly can not to get the car back, now if it is a manufacturer ie. GMAC FMC etc they don't care because they have a dealer base to get rid of the cars.

All the bank wants from you is a check for the payoff(call them and find out what that is) Many banks will negotiate that.
They have nothing to do with sales tax etc.
You can handle all that through the DMV
If you are finacing the balance ask them what thier rates are they can Fed-Ex you paperwork if thier rates are competitive.

Bottom line is don't pay the $500

Now if your dealing with a Ford well good luck Ford Motor Credit leaves it up to the dealers to handle all transactions and then you need to find another dealer.
post #11 of 14
JT,

I just went threw this within the last week with Chrysler Financial. When we called for a buyout of the lease, they quoted us a price less than the remaining payments and the residual value stated. When the Ford dealer called for a buyout they quoted them a higher price, yet it was still less than the cost of the remaining payement and the residual value. The added amount was due to the fact the truck was not being brought by a Jeep dealer. The dealer didn't charge me any fee to handle the transaction and there was no disposition fee on the lease.
post #12 of 14
Thread Starter 
dkovac, Yes it is with Ford Motor Credit and I just got off the phone with them. FMC requires to you to go to the original dealer to buyout the car. I also called Mitsubishi Motor Credit because I'm considering buying my montero sport and they said I could just mail a check directly to them, I even got an automated payoff amount over the phone. I think FMC just treats their customers like crap.

I did get them to throw in a detail and tune-up, about $200-$250, so it's not all that bad. I'm annoyed but I'm not going to back out of the deal, I just won't do business with FMC again.

Going to buy a car is near the top of my list of this I HATE doing. I wish all car dealers were fixed price, no commission "stores". When we were pulling into the dealership last night there were 3 or 4 salespeople standing outside and my mother-in-law says "They look like dogs about to bite me." This was not said sarcastically but slightly scared. I think that about sums them up, sorry dkovac I'm sure you weren't like that.
post #13 of 14
On several occaisions I have advertised for people about to turn in a lease. I bought a Chrysler Concord at 2 1/2 years in and 15K miles for $12,000. I bought a Jeep Grand Cherokee at 3 years with 24K for $13,000 miles.
These people just sold to me and paid off their residual.
I don't buy new for the exact reasons outlined here.
I buy fishing tackle with what's left over
Great Thread
post #14 of 14
"Disposition fees" at the end of a lease are fairly common, but if it's not spelled out in the original leasing contract, I would tell the dealer to shove it. If the car is not over mileage, I'd have it detailed so it's in cherry condition and return it. And that sales manager is full of it, as most sales managers usually are. Not "every" dealer tries to add on a non-specified disposition fee at the end of a lease, especially where you're re-leasing or purchasing a new vehicle, or exercising your purchase option. If the purchase option isn't a good deal for the dealer, they'll do everything they can to discourage you from exercising it. When I bought my Grand Cherokee from Island Jeep in Lindenhurst LI, I still had 3 months remaining on the lease term on my small Cherokee. Island Jeep just charged me (less than $200) for the excess wear and tear, which was a scratch down the right side courtesy of a metal snow fence post I didn't see out on the beach, and they ate the last 3 lease payments and the small over-mileage charge. Plus a good price on the new Grand at a good interest rate for the time.

Lots of people don't realize leases are as negotiable as to many of the terms as purchases are. Especially the end-of-lease purchase amount

One general rule of thumb as to anything involving a car dealer----the louder the pitchman screams in their radio/TV ads, or the bigger their newspaper ads, the more likely they are to hose you.

[ 07-11-2003, 11:21 AM: Message edited by: Ditch Jigger ]
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