Selling a leased Wrangler

[Shooting or Jeeping]

Gotta beg to differ - I used to lease vehicles all the time, and more than once when terminating early by trading or selling to a dealer (those are two different scenarios) I got more money than what the residual was calculated to be, based on the market value which was added to by the accessories the vehicle had. What anyone be it a dealer or otherwise, is willing to pay for a vehicle changes almost from minute to minute, and can be what is owed, less than what is owed, or more than what is owed - and often if it's more than what is owed (possibly helped by accessories) it is due to the market for that vehicle being high at the time for a variety of reasons. (and high with low availability) Everybody's situation is different, so it never hurts to ask. For example, I deal with the same dealer all the time, and they agree on a value they will credit me in a trade, or simply cut a check for, on a vehicle I am selling without ever seeing the vehicle. They don't do that with everyone, but they've learned I won't screw them so we negotiate in good faith on all sides. And sometimes a dealer already has someone they know will buy a particular vehicle so they are motivated to pay more than the minimum because they know they will make money when they sell it to the person they have "waiting in the wings".

On a related note - in CA when you lease a vehicle, you are only paying sales tax on the amount you pay in the monthly lease payment - if you choose to the pay that vehicle off (buy if from the leasing entity) then you have to pay the sales tax on the amount you pay to buy it. That can be a bit of surprise if you're not expecting it.

We can both be right. Kinda to your point, you have a dealer you use. They know what works and doesn’t. But if you go to Rando dealer- they don’t have to be as willing. Plus, state to state can change the dynamics. I was a finance director for several years, so I had to do several of these.

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[Robs JL]

I don't have any plans of doing this I was just wondering how it works because I was reading up on it. If my residual is 32k and I owe $8k left on my lease payments until Feb of 2020 does that mean if I sold the Wrangler for 38k I would get back 6k for myself after I pay the leasing bank or do I still have to pay the total remaining $8,000 in remaining payments?

Your residual is based on all lease payments being finished. If you still owe 8k in payments then the car would be roughly 40k more or less to buyout. So if someone wants to buy it from you see what the payoff is then the value of the vehicle. If you can sell it for more than the payoff amount then you'll pocket the difference.

 

[YYCSahara]

I just sold a leased Tacoma. I was 20 months into a 3 year lease. Basically you can call the lease company any time you like and they will give you the current vehicle buyout. And yes it is roughly equal to the residual + sum or remaining payments.

My buyout was 35K with tax on the tacoma and I sold it for 37K. This is in Canada so prices here are higher.

 

[Wrangler847]

I just sold a leased Tacoma. I was 20 months into a 3 year lease. Basically you can call the lease company any time you like and they will give you the current vehicle buyout. And yes it is roughly equal to the residual + sum or remaining payments.

My buyout was 35K with tax on the tacoma and I sold it for 37K. This is in Canada so prices here are higher.

Most strait forward answer .Thanks

 

[Durango]

We can both be right. Kinda to your point, you have a dealer you use. They know what works and doesn’t. But if you go to Rando dealer- they don’t have to be as willing. Plus, state to state can change the dynamics. I was a finance director for several years, so I had to do several of these.

Shooting or Jeeping - then you can probably get a kick out of this - once, I put $24K down on a LEASE so as to get the additional amount off sale price (with my intent being to buy the leased vehicle not long after). The dealer was so thrown off by this untypical large offset on a lease, they ended up FedEx'ing me four different contracts one after another after I drove home, because they just couldn't figure out how to write a lease with that much up front. (I don't do leases any more)

 

[Digger70]

I just sold a leased Tacoma. I was 20 months into a 3 year lease. Basically you can call the lease company any time you like and they will give you the current vehicle buyout. And yes it is roughly equal to the residual + sum or remaining payments.

My buyout was 35K with tax on the tacoma and I sold it for 37K. This is in Canada so prices here are higher.

So you and the buyer went to the dealer and you paid it off, he got the title and you pocketed around 2k?

 

[Wrangler847]

So you and the buyer went to the dealer and you paid it off, he got the title and you pocketed around 2k?

I really got screwed by Ally then cus my residual is 32k on the $40k sticker ( got it to $38,000) so that's means my buy out would be 40k because my remaining payments are $8,000 lol ..WoW

 

[Digger70]

I really got screwed by Ally then cus my residual is 32k on the $40k sticker ( got it to $38,000) so that's means my buy out would be 40k because my remaining payments are $8,000 lol ..WoW

I thought the residual is what it would be worth when the lease is up. I leased my first Wrangler, a '14 Willys Wheeler JK and the dealer said my residual when the lease was up would be around $20k. I bought it when the lease was up.

 

[Wrangler847]

I thought the residual is what it would be worth when the lease is up. I leased my first Wrangler, a '14 Willys Wheeler JK and the dealer said my residual when the lease was up would be around $20k. I bought it when the lease was up.

It's more of like what the bank thinks it's gonna be worth at the end of the lease. Buying out a Wrangler at end of lease works against you since they hold value. I will pay $18k total at the end of my 3 year lease so if I buy it out at $32k I will have thrown loads of money down the toilet. I couldn't buy it because I wasn't comfortable with a $640 payment. If I could go back I would have bought it but then again ...if I bought it for $640 month I wouldn't of had the $7,000 I put in mods and then I wouldn't of been happy driving around a stock wrangler for $640 month .

 

[Digger70]

It's more of like what the bank thinks it's gonna be worth at the end of the lease. Buying out a Wrangler at end of lease works against you since they hold value.

I bought mine for the $20k or so then when I traded it in a year later I got about $24k for it.

 

[YYCSahara]

So you and the buyer went to the dealer and you paid it off, he got the title and you pocketed around 2k?

Yup! We met up at dealer. I handed a certified bank draft to the dealer to pay off the Tacoma (35k all in), the dealer then on the spot printed off a letter stating Toyota Canada is releasing the lien and has no more interest in the Tacoma. I gave that to the buyer and he gave me a certified bank draft for $37k. We both went to each others' bank prior to this together to make sure both drafts were legit, so it was a bit of driving around, but for 2 grand in my pocket it was worth it haha.

 

[YYCSahara]

I really got screwed by Ally then cus my residual is 32k on the $40k sticker ( got it to $38,000) so that's means my buy out would be 40k because my remaining payments are $8,000 lol ..WoW

What is your rate? Wranglers are really good leases as long as you can keep that rate (money factor) in check.

My current buyout on the wrangler is about $50k. Residual is $37k. It's only 2 months old though. I am not too worried, I think if I get sick of mine I will just have someone take the lease over since I got a really low monthly payment compared to what everything else costs to lease where I live.

 

[Wrangler847]

What is your rate? Wranglers are really good leases as long as you can keep that rate (money factor) in check.

My current buyout on the wrangler is about $50k. Residual is $37k. It's only 2 months old though. I am not too worried, I think if I get sick of mine I will just have someone take the lease over since I got a really low monthly payment compared to what everything else costs to lease where I live.

Won't you still be liable though if they default ? Idk... Ally bank goes by letters for tiers. I ended up in a B tier that results in around $38 extra in interest a month. My monthly is $389 but I put 4k down

 

[Jeep24Dmb]

I really got screwed by Ally then cus my residual is 32k on the $40k sticker ( got it to $38,000) so that's means my buy out would be 40k because my remaining payments are $8,000 lol ..WoW

Don’t forget about the money factor (essentially interest rate on a lease - probably around 4 percent) and tax. That’s all part of your payment so it’s not as simple as 38K minus 32K.

 

[Jeep24Dmb]

I don't have any plans of doing this I was just wondering how it works because I was reading up on it. If my residual is 32k and I owe $8k left on my lease payments until Feb of 2020 does that mean if I sold the Wrangler for 38k I would get back 6k for myself after I pay the leasing bank or do I still have to pay the total remaining $8,000 in remaining payments?

Short answer - Call your leasing company and get the “customer buyout.” You’d have to then write the leasing company a check for that amount (it will include your agreed upon residual value, remaining payments AND taxes.) Your mods mean nothing to them. Then you wait for the title. The vehicle is yours. THEN you sell it privately to another party at an agreed upon price where you can factor in your mods. The new buyer pays taxes too. The downside to this scenario is you HAVE to pay the full taxes on the car just to then sell the car to someone else who also pays taxes. So you lose money there.

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