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Buy Out Car Lease /Dealer Issue

spyderdsm 406 33 November 20, 2011 at 12:01 PM
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Lease on my wife's 2008 equinox is up next month. We plan on buying out lease and financing because car only has 26K miles and buy out price is $12K as per the contract.
We goto dealership to let them know that we want to buy out lease next month instead of returning it. They tried to quote me $12K +$2500 "warranty" + $500 "dealer fee". So the total price would be $15K plus tax. I told them why would I need a warranty on a car I currently have had for over 4yrs already and I know there is nothing wrong with the car. They just said the bank requires them to have a warranty. We got up and left after they tried getting slick.

So we called the lender(Ally bank) and they told us the buy out is 12K plus tax which would be around $13K. I will probably get a loan from my bank and not deal with the dealership.
Is this a normal tactic dealerships try to do? They actually tried to act like they owned the car and sell it us at a higher price.

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#2
Try going to a different dealer and see what they say.

This dealer is probably upset that you're buying the leased car, and not taking out a lease on a new car!
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#3
lol did they try to sell you the undercarriage rustproofing too?
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#4
Quote from Dr. J View Post :
lol did they try to sell you the undercarriage rustproofing too?
it was probably included in the "warranty" laugh out loud
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#5
them trying to force you to buy that warranty is illegal. I got roped in with a lower interest rate if I got an extended warranty. I am on the phone checking on the status of the refund for the cancelled warranty.
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#6
thanks for the info. Im going to try to finance through chase bank since I already bank with them.
I do regret giving the dealership my info for the application process. They needed it to run credit and to check what finance "options" were available to me, but it never went that far because they tried to pull a fast one on me.
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#7
Yeah, they're trying to pull a fast one on you. Just deal directly with Ally - the ONLY reason dealers exist is to charge you as much money as they think they can get away with. Why introduce that hassle into your life?
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#8
Update:
Went to chase to get approved for loan. Got approved for loan at 2.91%. The issue now is that Chase wont give me the loan because the lease is under my wife's name. According to chase, they wont do 3rd party lease buy-outs. We applied for load in wife's name with chase and awaiting a response since her credit isn't as good as mine.
So we call the bank that owns the car (ally) to see what other options there are, and they say that we have to go through the dealer to finance lease buy out.
Seems to me like the dealer and the leasing company doesn't want us to buy out the car.
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#9
OP
Why can't you buy the car as a used vehicle from your wife? That doesn't really make sense tha tchase wouldn't give you the loan.
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#10
Update:
Went to another dealership who was much better than the one we first visited, but we had no choice but to finance car in wife's name since the lease is in her name. So here are the #s

total price with taxes and fees: $14,025
Down Payment : $3700
Financed : $10325
APR (Not good) : 7.34% 60 months
Monthly Payments : $206

I was approved by chase for a auto loan at 2.91%. Should I "buy" the car from her and put in my name to save some $ on interest and monthly payments? Monthly payments would be $185 at 60 months and we would save $1260 on interest. Would we be charged state tax for registering the vehicle(Im in NY)?
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Last edited by spyderdsm December 10, 2011 at 08:43 AM
#11
I know in NJ when i purchased a car from my father we just said it was a gift when we had to fill out the paperwork with the DMV now the MVC. A couple years later i got hit with a tax bill from the state but i called up and said it was a gift from my father and they were okay and i didnt have to pay the tax.

So in my situation i didnt have to pay the tax. But just think about it this way even if you have to pay $700 in tax you would still be saving $560 by putting it in your name with a 7% sales tax. That doesnt include if you add a little more to the principle each month to lower you total interest payments.
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#12
Quote from yotafan View Post :
I know in NJ when i purchased a car from my father we just said it was a gift when we had to fill out the paperwork with the DMV now the MVC. A couple years later i got hit with a tax bill from the state but i called up and said it was a gift from my father and they were okay and i didnt have to pay the tax.

So in my situation i didnt have to pay the tax. But just think about it this way even if you have to pay $700 in tax you would still be saving $560 by putting it in your name with a 7% sales tax. That doesnt include if you add a little more to the principle each month to lower you total interest payments.
I was also thinking about buying it and financing it through chase and leaving the registration in my wife's name and that way the state dmv doesn't get involved. We are both on the insurance policy also and they know the car is registered in her name.
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#13
Quote from spyderdsm View Post :
I was also thinking about buying it and financing it through chase and leaving the registration in my wife's name and that way the state dmv doesn't get involved. We are both on the insurance policy also and they know the car is registered in her name.

That will work also. Same thing as purchasing a car for someone else making you financially obligated for the note but only registered in their name.
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#14
will i have to pay taxes again if I re-finance the auto loan??
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#15
Quote from spyderdsm View Post :
will i have to pay taxes again if I re-finance the auto loan??
I'm assuming you truely mean after you get a loan you get another loan to refinance that one and not a loan after a payoff.

Auto loans you don't pay taxes again since there is no vehicle being purchased (the vehicle was taxed at the time of the first sale), instead the remaining balance is just being financed again thus there is no profit on the dealer side.
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