Dealer wants to buy out my lease?

ANY time ANY salesperson contacts you it is for THEIR benefit not YOURS ! Whose hand is that in your wallet pocket? :E

I worked 24 years for a major manufacturer's captive finance company, and I taught salesmen and dealerships how to lease vehicles.

The benefits to dealers to lease is that many leases are at an "acquisition cost" that can be as high as MSRP. The deal with leases is to negotiate a monthly payment. That doesn't mean you cannot ask the business manager what they're being paid for the lease.

Lease payoffs are only quoted to the original dealer--not to other Ram dealers. Keeping you as a preferred lease customer is a great benefit. And your dealer gets first chance to purchase your current lease vehicle--rather than it go to auction.

If the truck they're pitching at you is as nice as the current model and you're satisfied with the payment, go for it.

Last time I financed a vehicle, I had to put a set of tires on it before termination. I just suggest you keep the vehicle less time/miles to where tires are not required. New tires for a 3/4 ton or 1 ton can run $900-$1200 easily.

On my last servicing on my truck I was approached (within 5 minutes of entering the waiting area) by my salesman. He stated he could relieve me of my truck (See sig), get me into a "newer" 2013 with 60k km on it (asking $45,000 Cdn), cut me a cheque to put toward the payments on my truck, and roll the payments on our Pacifica into the deal, AND make it cheaper overall. I'm still shaking my head on this, as when I purchased the truck the loan was through RBC, which I never made a "payment" on, instead rolling it right into my line of credit (which saved me $22,000Cdn or so in taxes/interest). So, so far as anyone is concerned, I OWN my truck. Just have to pay off the LOC. I am making payments on the DW's 2006 Pacifica, but we're almost 2 years into a 4 year plan on that one.

Besides, I have my truck set up the way I want it. And if I were to look into trading it in (I'm not), I have a ton of equipment to pull out first, and that's a royal hassle to do.

I figure the dealer is desparate for used trucks to sell and they're looking for anything they can get their hands on. They even used the line that my truck, which now has 151,000km on it, will cost big bucks on the next oil change due to engine overhaul at 160,000km (is that even done anymore?).

Cheers!
Mike

My dealer wants to buy my 05Prius, and give me 4K over book value because they're in such high demand. I laugh every time I get one of those letters. I should bring it in, ask them for the money, or tell them to quit mailing me those crazy letters.

larry barnhart wrote:
I have received several letters from our local chev dealer telling me they can put us in a new 2015 chev for less then the payments we are making for our 05 chev. No payments were made on the 05 and you can figure how or if the deal could even happen.

chevman

It's not just GM. Ford offered me the same on my 2005 although the vehicle was not financed. I was also tempted to walk in and ask for a new truck where they would pay me monthly to take it.

DownTheAvenue wrote:

Powerdude wrote:

He would gain a newer used truck to put on his lot and sell at a profit. You would have the same payment, but for a longer time, thus guaranteeing the dealer a revenue stream for a longer period of time.

I don't understand this statement. It implies that the dealer makes revenue with every payment a purchaser makes. If that is the meaning of this statement, that is WRONG. A dealer usually makes money with any financing he arranges with a "spread" of interest from what the contract is and what a finance company or bank will buy.

It's a revenue stream for somebody, probably Chrysler Financial, and the salesman gets a commission and the dealer gets whatever bonus/holdback/lease spread for putting the guy into a new lease.

So, my point was that basically, he terminates his lease, his current truck gets put on the lot (or sold at auction) or whatever the arrangement the dealer has, so somebody makes money (i.e. not the former lessee).

Then he gets into a new lease, and somebody makes money for putting him into that new lease, whether it's the salesman, lease office, finance company, whatever.

If he's happy, and they're happy, that's fine. Just realize that the car business is designed for one thing, and one thing only. To make money from selling cars (whether that's a lease, new, or used), whatever.

That's just the way it is. If he's happy, and everybody is happy, no reason not to do the deal. But, happiness costs money, and makes money, for the dealer. But hey, you can't take it with you.

Powerdude wrote:
He's not sending you the letter out of the goodness of his heart in order to do you a favor.

The dealer is doing his own wallet a favor, and not yours.

Used cars/trucks are often more of a profit margin for the dealer than new ones.

He would gain a newer used truck to put on his lot and sell at a profit. You would have the same payment, but for a longer time, thus guaranteeing the dealer a revenue stream for a longer period of time.

Dealer wallet wins = 2
Your wallet wins = 0

Pretty straightforward.

If this is a Chrysler lease and if they have gone to the way Ford does it they do not keep the lease turn in. They all go to auction.

But the marketing part is no different than the wireless companies. With Verizon you upgrade your phone and they have you for another two years.

DownTheAvenue wrote:

Powerdude wrote:

He would gain a newer used truck to put on his lot and sell at a profit. You would have the same payment, but for a longer time, thus guaranteeing the dealer a revenue stream for a longer period of time.

I don't understand this statement. It implies that the dealer makes revenue with every payment a purchaser makes. If that is the meaning of this statement, that is WRONG. A dealer usually makes money with any financing he arranges with a "spread" of interest from what the contract is and what a finance company or bank will buy.

Spreads are almost extinct. Too much risk for the lender and dealer from discrimination lawsuits. Today most contracts pay the dealer a flat fee or nothing at all for placing a lease or loan. The dealer has enough incentive since no loan means no sale. And a lower rate means a lower payment which makes selling warrantees and accessories easier.

I have received several letters from our local chev dealer telling me they can put us in a new 2015 chev for less then the payments we are making for our 05 chev. No payments were made on the 05 and you can figure how or if the deal could even happen.

chevman

One word: "Commission".