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What does it mean when a competing brand offers to get you out of lease early into one of their vehicles?

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NJRonbo

Junior Member
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So, I have a 2019 Lincoln MKZ that I have been leasing. The lease ends in 7 months.

I started getting letters two months ago from competing dealerships (I think Kia of Hyundai) offering to get me out of my lease and into one of their vehicles.

How is this done? The bank has to get their money on the lease and I can’t see a competing car company benefiting from paying off over 7 months of lease payments and putting me in one of their vehicles at no additional cost to me.

Even Genesis wants to talk to me about the possibility of getting out of my current lease into one of their vehicles.

Does this sound too good to be true?
 

RedHoncho

SUPPORTING MEMBER
240
135
43
Marysville, Ohio
They want to buy your car for the residual value on the lease. Because of the current chip crisis, there are very few vehicles for sale used or new. They can buy your vehicle then flip it for thousands more in the current market. The chip crisis isn't going to end by most estimates until 2023. You would be better off to stay in your car and order a new one so it times with the end of your lease. Then you can buy the lease vehicle and sell it yourself for a handsome profit.

I bought a CPO 2019 Lincoln Nautilus in March 2020. It is worth as a dealer trade-in what I paid for it with 11,000 more miles on it according to KBB and Edmunds. It's worth more if I choose to sell it to a private individual.

Do some research on Kelly Blue Book kbb.com, Edmunds.com etc. just to see what your vehicle is worth before you make any decisions. The dealers aren't attempting to scam you but they see a quick profit.
 

NJRonbo

Junior Member
13
3
3
They want to buy your car for the residual value on the lease. Because of the current chip crisis, there are very few vehicles for sale used or new. They can buy your vehicle then flip it for thousands more in the current market. The chip crisis isn't going to end by most estimates until 2023. You would be better off to stay in your car and order a new one so it times with the end of your lease. Then you can buy the lease vehicle and sell it yourself for a handsome profit.

I bought a CPO 2019 Lincoln Nautilus in March 2020. It is worth as a dealer trade-in what I paid for it with 11,000 more miles on it according to KBB and Edmunds. It's worth more if I choose to sell it to a private individual.

Do some research on Kelly Blue Book kbb.com, Edmunds.com etc. just to see what your vehicle is worth before you make any decisions. The dealers aren't attempting to scam you but they see a quick profit.

First, thank you for this.

I wouldn't mind that they flip my car for a quick profit.

I have the opportunity to buy a vehicle but under normal circumstances I would have to wait out the 7 months to pay off my Lincoln lease.

I could go to the bank, get a loan, pay it off myself and then sell the car. But you know what? Too much of a hassle -- and yes, I am aware I could pocket money.

It just seems, for me, to take a lot of time and effort out of it all by allowing the new dealership to handle all the transactions and just allow me to get into a new vehicle without any penalty.

No, not the smartest thing for me to do, but the easiest.

Again, I really appreciate you taking the time to offer the advice.
______________________________
 

RedHoncho

SUPPORTING MEMBER
240
135
43
Marysville, Ohio
Talk to your Lincoln dealer and see what they might do for you if you're interested in another Lincoln. Hyundai, KIA and Genesis have some compelling vehicles in their line ups now. They received very high ratings for quality during the last JD Power survey. Just do your research on your current vehicle so you know its value if you're not going to turn it into a Lincoln dealer. You might be able to negotiate a better trade value.

Also, be aware, some automakers are not allowing lessees to turn their vehicles in to competing automaker dealerships. They want their own dealers to have the used vehicle to sell. I don't know if Lincoln falls under this category or not. I quick call to your dealership would answer that question.
 

NJRonbo

Junior Member
13
3
3
Talk to your Lincoln dealer and see what they might do for you if you're interested in another Lincoln. Hyundai, KIA and Genesis have some compelling vehicles in their line ups now. They received very high ratings for quality during the last JD Power survey. Just do your research on your current vehicle so you know its value if you're not going to turn it into a Lincoln dealer. You might be able to negotiate a better trade value.

Also, be aware, some automakers are not allowing lessees to turn their vehicles in to competing automaker dealerships. They want their own dealers to have the used vehicle to sell. I don't know if Lincoln falls under this category or not. I quick call to your dealership would answer that question.

I don't know if I want another Lincoln. I have been leasing Lincolns for years. I want to purchase my next vehicle.

As much as I love Lincoln, the depreciation on their vehicles is tremendous. I would rather get into a Lexus or Genesis that not only has less depreciation, but much higher dependability scores. Ford is going through an awful amount of issues with their brand.

You are right: Lincoln does not allow you to sell your lease to places such as Carmax (or the like). I checked with their finance department.

I am not certain if that also extends to competing dealerships. Right now I have a Genesis dealer (I am looking at the GV70) looking into whether he can get me out of my lease or not.
 

bbf2530

Junior Member
2,589
1,379
113
First, thank you for this.

I wouldn't mind that they flip my car for a quick profit.

I have the opportunity to buy a vehicle but under normal circumstances I would have to wait out the 7 months to pay off my Lincoln lease.

I could go to the bank, get a loan, pay it off myself and then sell the car. But you know what? Too much of a hassle -- and yes, I am aware I could pocket money.

It just seems, for me, to take a lot of time and effort out of it all by allowing the new dealership to handle all the transactions and just allow me to get into a new vehicle without any penalty.

No, not the smartest thing for me to do, but the easiest.

Again, I really appreciate you taking the time to offer the advice.

Hi NJRonbo. just keep your eyes open, read all the fine print, do all the math etc. No car Dealer is doing this to be nice. So they are making a tidy sum for doing it, and long contracts with lots of fine print are often the way they do it.

And it is too late once you sign and find out they did not/will not pay off your old lease, you owe more than you thought etc.

Let us know how you make out and good luck.
 

NJRonbo

Junior Member
13
3
3
Hi NJRonbo. just keep your eyes open, read all the fine print, do all the math etc. No car Dealer is doing this to be nice. So they are making a tidy sum for doing it, and long contracts with lots of fine print are often the way they do it.

And it is too late once you sign and find out they did not/will not pay off your old lease, you owe more than you thought etc.

Let us know how you make out and good luck.

Thanks BBF!

I know this sounds naive. However, do you think the dealership would actually tell me they are paying off the lease and then have me sign something that says otherwise? Yes, anything like that is possible, but is that something that a dealership would actually resort to?


I know they aren't doing this to be nice. I could care less what kind of profit they make from it. If it saves me time and hassle of doing it myself it's all worth it.

But you gave me food for thought and I'm going to have to learn how to read the lease sell-off contract in the process.
______________________________
 

RedHoncho

SUPPORTING MEMBER
240
135
43
Marysville, Ohio
Thanks BBF!

I know this sounds naive. However, do you think the dealership would actually tell me they are paying off the lease and then have me sign something that says otherwise? Yes, anything like that is possible, but is that something that a dealership would actually resort to?


I know they aren't doing this to be nice. I could care less what kind of profit they make from it. If it saves me time and hassle of doing it myself it's all worth it.

But you gave me food for thought and I'm going to have to learn how to read the lease sell-off contract in the process.
What they might do is include part of your payoff in the purchase price of the new vehicle. This cost will be hidden in the purchase contract so look for any unusual fees or add-ons.

If you are purchasing, get pre-approved for a loan either through their captive finance unit or your bank or credit union. If you let the dealer arrange financing they can add on a fee or even increase the interest rate as their "cut" for making the deal. Credit unions tend to have better rates than banks but Bank of America is competitive. Check the Genesis website to see if they offer any special financing. If they do and you like the terms then apply for the financing on their website.

Also, even in the current climate you shouldn't pay MSRP (sticker price). If you're a Costco member they have a great car purchase program that will get you some discount.
 

NJRonbo

Junior Member
13
3
3
What they might do is include part of your payoff in the purchase price of the new vehicle. This cost will be hidden in the purchase contract so look for any unusual fees or add-ons.

If you are purchasing, get pre-approved for a loan either through their captive finance unit or your bank or credit union. If you let the dealer arrange financing they can add on a fee or even increase the interest rate as their "cut" for making the deal. Credit unions tend to have better rates than banks but Bank of America is competitive. Check the Genesis website to see if they offer any special financing. If they do and you like the terms then apply for the financing on their website.

Also, even in the current climate you shouldn't pay MSRP (sticker price). If you're a Costco member they have a great car purchase program that will get you some discount.

I am going to make it clear to Genesis that none of the payoff is to be included in the price of the vehicle.

I know the posted MSRP of the vehicle I want so it should be easy to spot. You can plug in your down payment on their website, it will calculate taxes and tell you your exact monthly payment that you can approve online. So, I am going in knowing what it should cost.

MSRP is tough with Genesis. They don't negotiate from what I understand. I don't think Costco is affiliated with them either, but I will certainly take a look -- thanks for the suggestion.
 

NJRonbo

Junior Member
13
3
3
Just got this reply from Lincoln finance. It SEEMS that the buyout can be done as long as Genesis does it through my dealer. Am I correct on this?

0752B3C8-878C-4499-8641-A32E17D1E99E.jpeg
 

bbf2530

Junior Member
2,589
1,379
113
Thanks BBF!

I know this sounds naive. However, do you think the dealership would actually tell me they are paying off the lease and then have me sign something that says otherwise? Yes, anything like that is possible, but is that something that a dealership would actually resort to?


I know they aren't doing this to be nice. I could care less what kind of profit they make from it. If it saves me time and hassle of doing it myself it's all worth it.

But you gave me food for thought and I'm going to have to learn how to read the lease sell-off contract in the process.

Hi NJRonbo. Obviously, we do not know your Dealership's practices etc. (or I don't...lol).

However, I have heard of that exact thing happening to unsuspecting buyers. A Dealer states they will pay off the old lease contract/loan, then months later the customer finds out not only was the old loan not paid off, but they are now on the hook for late fees and their credit history gets dinged too. And the contracts they signed are not what they thought.

I am not saying this Dealership is dishonest (or honest). But it has happened where buyers are told one thing, unsuspectingly sign a long, legalese filled contract without carefully reading it, then find out they were victims of a bait and switch type of situation.

Just be vigilant and read everything carefully. The only person looking out for you is you.

Keep us updated and good luck.
 

bbf2530

Junior Member
2,589
1,379
113
Just got this reply from Lincoln finance. It SEEMS that the buyout can be done as long as Genesis does it through my dealer. Am I correct on this?

View attachment 11322

Hi NJRonbo. Again, just be careful. That reply does not state or imply that it can or can not be done. It simply states that if it can be done, you must negotiate it through your Dealership, not Lincoln Financial.

I realize that reply is not a contract...but when it comes to communications and contracts such as that, never assume anything more than exactly what is stated. So all that Lincoln Financial Services reply tells you is...LFS will not/does not handle your early buyout, it must be arranged through your Lincoln Dealership. Nothing more.

I will just repeat that I am not saying Genesis will do anything dishonest, simply advising you to be careful and protect yourself.

Good luck.
 
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NJRonbo

Junior Member
13
3
3
Hi NJRonbo. Again, just be careful. That reply does not state or imply that it can or can not be done. It simply states that if it can be done, you must negotiate it through your Dealership, not Lincoln Financial.

I realize that reply is not a contract...but when it comes to communications and contracts such as that, never assume anything more than exactly what is stated. So all that Lincoln Financial Services reply tells you is...LFS will not/does not handle your early buyout, it must be arranged through your Lincoln Dealership. Nothing more.

I will just repeat that I am not saying Genesis will do anything dishonest, simply advising you to be careful and protect yourself.

Good luck.


BBF,

Have one more question for you.

Suppose I took my Lincoln to the dealership and gave them a check for the buyout. I have the money to do that in the bank.

Then the vehicle is mine.

I can then take the vehicle to a Genesis dealer and they can buy it from me, correct?

Is there potential for any money loss there?

Thanks

Ron
______________________________
 

RedHoncho

SUPPORTING MEMBER
240
135
43
Marysville, Ohio
You would probably come out ahead. Go on kbb.com and input all your vehicle information and see what it is worth as a trade in and a private sale. I'm certain it is going to be higher either way than your lease residual value.
 

bbf2530

Junior Member
2,589
1,379
113
BBF,

Have one more question for you.

Suppose I took my Lincoln to the dealership and gave them a check for the buyout. I have the money to do that in the bank.

Then the vehicle is mine.

I can then take the vehicle to a Genesis dealer and they can buy it from me, correct?

Is there potential for any money loss there?

Thanks

Ron

Hi NJRonbo. Yes, a "trade-in" comes with an almost definite money loss. So if you were thinking about buying out the lease yourself, in order to maximize your profit and minimize your losses, I would recommend this: Do not trade-in your used vehicle. Sell it yourself.

Dealers do not take trade-ins as a favor to us (see below). Do your research to see what your old vehicle is approximately worth on a trade-in and in a Private Sale. Then find out what the Genesis Dealer will offer you for a trade-in. Then take your research and calculate how much you can sell your vehicle for privately. Then try to sell your vehicle yourself. Make Ford Sale signs. Post it for sale on your local bulletin boards and online.
If you acn sell it privately for a nice profit, which you should be able to do if it is in good condition, you made a nince profit for minimal work. If you can't sell it in time, take the trade-in offer.

I have never traded in a used vehicle. I always sold my used vehicles myself for a nice profit over what the Dealers would offer me when I purchased my new cars.

Taking trade-ins is not a favor or service that Dealers do for us. Dealers take trade-ins in order to make money off our old vehicles. They offer a lowball price and then turn around and sell it for a profit to someone else. Even if they offer a decent trade-in value, it usually means they are balancing it out with a higher price on the new vehicle.

I have always been able to privately sell my old car for anywhere from ~$1,500 to ~$4,000 more than the trade-in offer. And that is profit over and above the sales tax hit. I consider that to be well worth the hour or two I had to put into writing out Ford Sale signs and dealing with prospective buyers, etc.

I do understand that not everyone has the time, ability or inclination to do this, especially if they need to buy a new car now and sell their old one immediately. I have the time because I always factory order my new cars. However, for those who have time, it can be well worth it.

So it is just another option, for those who want to get the most money for their old vehicle and don't mind taking a little time out of their day to do it.

Keep us updated and good luck.
 

NJRonbo

Junior Member
13
3
3
BBF -

You were the guy I wanted to hear from (and I appreciate RedHoncho chiming in) as you have given me detailed responses.

The problem is, I'm just too lazy to go through the process of selling the vehicle privately.

I have $29k in the bank so I can easily buy out my lease today if I wanted to and not have to take a loan.

And, while I realize car dealers are not doing me any favors, if they give me at least what I paid Lincoln for the buyout and NOT increase the cost of the vehicle as I configured it with taxes and down payment on the website then I am fine with that. Not sure now if that will happen, but I have contacted two dealers and asked them to give me their best offer on the Lincoln I want to sell to them.
 

bbf2530

Junior Member
2,589
1,379
113
BBF -

You were the guy I wanted to hear from (and I appreciate RedHoncho chiming in) as you have given me detailed responses.

The problem is, I'm just too lazy to go through the process of selling the vehicle privately.

I have $29k in the bank so I can easily buy out my lease today if I wanted to and not have to take a loan.

And, while I realize car dealers are not doing me any favors, if they give me at least what I paid Lincoln for the buyout and NOT increase the cost of the vehicle as I configured it with taxes and down payment on the website then I am fine with that. Not sure now if that will happen, but I have contacted two dealers and asked them to give me their best offer on the Lincoln I want to sell to them.

Hi NJRonbo. I guess the problem is this: Without having hard figures and offers from a Dealership, it is extremely difficult (to impossible) to tell you with any certainty that you will make more money going one way or the other.

You could wind up buying out your vehicle, then being low-balled on your trade-in by the Genesis Dealership, and any others you deal with. In that case, you could wind up taking a bath, especially since you do not want to use the back-up plan of selling your vehicle privately. If the Dealer knows they have you over a barrel, they will take advantage of it to maximize their profits. Unless they are a personal friend or family member. They are in the business to make the most profit possible.

This is my opinion: It is not fair for me to tell you you'll make more money one way or the other, since it is impossible to determine that without hard figures, knowing your negotiation skills, etc etc.

Feel free to ask any questions you may have. We are all here to help.

Good luck.
 
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