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Purchase Price for a 2016 Sport after Lease Term


GrafX

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Looking for a realistic (or ballpark) figure for an agreed upon purchase price for a 2016 Sport model after a 3-year-term and $10,000 down.

Salesman told me he can't say anything until he has a Vin number. I'm not at that point yet because I won't be buying until August (I'm in save mode because of recently paid-off bills). My plan is to purchase the vehicle after the lease term and wanted to know what to expect. Below is pretty much the specs and payment I'm looking for when it comes to my next financial burden, heh. Let me know if you have anything else to add. This will be my first new vehicle purchase. Thanks!

 

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peterk9

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Looking for a realistic (or ballpark) figure for an agreed upon purchase price for a 2016 Sport model after a 3-year-term and $10,000 down.

Salesman told me he can't say anything until he has a Vin number. I'm not at that point yet because I won't be buying until August (I'm in save mode because of recently paid-off bills). My plan is to purchase the vehicle after the lease term and wanted to know what to expect. Below is pretty much the specs and payment I'm looking for when it comes to my next financial burden, heh. Let me know if you have anything else to add. This will be my first new vehicle purchase. Thanks!
Financially it is said that if you plan to purchase the vehicle after the lease, you would be $$ ahead to purchase it in the first place. I don't understand why your salesman can't give you any info until he has a VIN. I've leased 6 vehicles and never had to wait for a VIN in order to get payment details. A VIN doesn't change the bottom line. The only reason I can see for that explanation would be if he isn't sure if the order will go through as a 2016 or a 2017 since we are very near the end of 2016 order acceptance by Ford. As mentioned in several threads, the production scheduling for the 2017 models begins April 14th.

Peter
 


GrafX

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Financially it is said that if you plan to purchase the vehicle after the lease, you would be $$ ahead to purchase it in the first place. I don't understand why your salesman can't give you any info until he has a VIN. I've leased 6 vehicles and never had to wait for a VIN in order to get payment details. A VIN doesn't change the bottom line. The only reason I can see for that explanation would be if he isn't sure if the order will go through as a 2016 or a 2017 since we are very near the end of 2016 order acceptance by Ford. As mentioned in several threads, the production scheduling for the 2017 models begins April 14th.

Peter
Maybe because you have a history with your dealership? Like I said, I'm new to buying a new car. I also don't have a problem going with a 2017 model because of my target date. If the rumors about Sync 3 Integration hold true, that will pretty much push me over the edge and go with a 2017.
 


peterk9

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Maybe because you have a history with your dealership? Like I said, I'm new to buying a new car. I also don't have a problem going with a 2017 model because of my target date. If the rumors about Sync 3 Integration hold true, that will pretty much push me over the edge and go with a 2017.
No, it has nothing to do with my history with the dealership. I had no history with the Ford dealership. I've not read any other posts here where a VIN was required before the salesperson is able to provide the financials. It isn't really any different than ordering, for example, a refrigerator or other appliance. You agree upon a price and it is ordered or bought of the floor. Like I said, I think it is due to the fact that he isn't sure if the order will go through as a 2016 or become a 2017 on which he may not yet have pricing. Sync 3 will be in the 2017 Explorer. Good luck.

Peter
 


Radguy

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GrafX,

Peter is right. I've leased numerous vehicles over the last 20 years from various manufacturers and, without exception, all have disclosed ALL of the leasing numbers whether I ended up signing on the dotted line or not.

Sounds like your dealer is stringing you along to trying to get you to commit to a new vehicle.

You need to sit down and calculate the final cost of the vehicle both with the leasing option and with an outright purchase from the start. Also don't forget, when purchasing a vehicle out of lease, it's similar to buying a used car. There is usually an admin fee, licensing, and depending on where you live, tire taxes and safety inspection. That could easily run you an additional $1K in costs. Apart from your safety inspection, you're essentially paying all of those costs twice, once when you lease and again when you buyout.

Putting $10K down on a lease would significantly decrease your lease payments but then you have to deal with the buyout cost plus taxes. That may mean a significant increase in monthly payment costs for the residual of the vehicle. Putting $10K down on a purchase means lowering all of your payments from start to finish. I would think the only reason to lease and then buy as opposed to initial purchase would be if the leasing option netted you some additional tax deductions.
 


GrafX

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Putting $10K down on a lease would significantly decrease your lease payments but then you have to deal with the buyout cost plus taxes. That may mean a significant increase in monthly payment costs for the residual of the vehicle. Putting $10K down on a purchase means lowering all of your payments from start to finish. I would think the only reason to lease and then buy as opposed to initial purchase would be if the leasing option netted you some additional tax deductions.
Wait a sec, I'm being told whatever I put down (and payments) goes towards the cost of the vehicle. By the time 3 years expire, I'm thinking the vehicle purchase price will be around 30K? With the lease payment being so low, that will allow time to save even more cash and put a nice down payment down or just purchase the vehicle outright at the end of the lease term (the latter being unlikely, but definitely possible). I just want to avoid being locked into long-term large monthly payments for my first new vehicle.
 


peterk9

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Your deposit is only applied toward the cost of the lease. The residual (end) value is dependant upon the trim level, the length of the lease and the mileage option you choose. Whether you put $0 or $10k down, it will not affect the residual (buyout) price.

Peter
 


613GT500

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Lease to own is a very good financial decision to keep the monthly payments low (albeit paying full in cash would save you on interests).
As mentioned already, the payment terms can be setup the same day you walk into the dealership, regardless if a VIN isn't available.
The only other "subject to change" stipulation is the result of your credit check.
 


bschmidt10

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don't put money down on a lease!!! put the money aside and either use it to ease your payment cost or hold onto it until you purchase. If you total the vehicle that money is gone. Your vehicle will cost the same over the time of the lease whether you put money down at the beginning or not. Keep the money in your pocket, not theirs. If it would drop the payment from 500 to 400, just take the extra hundred from your beginning down payment that you kept.
 


GrafX

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Your deposit is only applied toward the cost of the lease. The residual (end) value is dependant upon the trim level, the length of the lease and the mileage option you choose. Whether you put $0 or $10k down, it will not affect the residual (buyout) price.

Peter
Gotcha. Thanks. I was under the impression it did.

I think I better talk to another salesperson at another dealership and compare notes with my current guy.
 


GrafX

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Sounds like your dealer is stringing you along to trying to get you to commit to a new vehicle.
I'm beginning to think that myself. Either that or maybe he doesn't think I'm serious because I asked stupid questions when we first met back in January.
 


GrafX

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Putting $10K down on a lease would significantly decrease your lease payments but then you have to deal with the buyout cost plus taxes. That may mean a significant increase in monthly payment costs for the residual of the vehicle.
I'm ok with spending a couple more G's when you sread it out over the years because I want the payments low. Because the 3-year-term payment on the lease would be so low, it will allow me to save more money and have some flexibility without the commitment. Kinda like being single, heh.
 


GrafX

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If you total the vehicle that money is gone.
Funny you mentioned that because this just happened 2 weeks ago to a co-worker. He got sandwiched in a multi-car accident off the freeway and his Nissan was totaled. Barely a year into the lease and his 2 grand... gone.

But yeah, that's definitely in my mind. Of course, I'm kinda known among my friends for not making smartest decisions in my life :D
 


Radguy

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GrafX,

You need to do some homework before making a final decision as to which way to go.

Get all of the numbers for each option then go to an online car lease and purchase payment calculator and plug in all of the numbers. Ask the dealer for all of the secondary costs for both leasing and purchase as I mentioned in a previous post (remember--lease and buyout means costs x 2) and add those in. Remember that with a buyout, if you don't have the whole residual and taxes in cash, you'll have to finance the remainder using a bank loan at bank lending rates.

My wife and I went through this exact exercise 5 months ago on a 2015 Porsche Macan S. We were initially going to a 4 year lease ($74K vehicle with a $30K buyout). We were going to put away as much as possible on top of the lease payments and bank finance any remaining balance (about half the residual).

Then we looked at purchase numbers. Using a personal credit line at 2.3% (better than manufacturer) , we were looking at a 72 month purchase with only 7% more in monthly payments than the lease. Then we decided on bi-weekly rather than monthly and went from 72 to 68 months of finance.

Then using the same dollar amount as the lease we figured on putting some extra money aside (just like with the lease), and making bulk payments of what we put aside on the finance plan every 12 months. If we do that go then go down to 54 months of payments.

In a nutshell, with exactly the same money on the finance plan as would have been for the lease, with 6 months of extra payments-- the vehicle is then ours lock, stock, and barrel. We figure we'll save a year of financing and just over $10K in total costs.

I'm not saying that your situation will be identical to ours, but a little homework may save you a surprising amount of money.
 


GrafX

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GrafX,

You need to do some homework before making a final decision as to which way to go.

Get all of the numbers for each option then go to an online car lease and purchase payment calculator and plug in all of the numbers. Ask the dealer for all of the secondary costs for both leasing and purchase as I mentioned in a previous post (remember--lease and buyout means costs x 2) and add those in. Remember that with a buyout, if you don't have the whole residual and taxes in cash, you'll have to finance the remainder using a bank loan at bank lending rates.

My wife and I went through this exact exercise 5 months ago on a 2015 Porsche Macan S. We were initially going to a 4 year lease ($74K vehicle with a $30K buyout). We were going to put away as much as possible on top of the lease payments and bank finance any remaining balance (about half the residual).

Then we looked at purchase numbers. Using a personal credit line at 2.3% (better than manufacturer) , we were looking at a 72 month purchase with only 7% more in monthly payments than the lease. Then we decided on bi-weekly rather than monthly and went from 72 to 68 months of finance.

Then using the same dollar amount as the lease we figured on putting some extra money aside (just like with the lease), and making bulk payments of what we put aside on the finance plan every 12 months. If we do that go then go down to 54 months of payments.

In a nutshell, with exactly the same money on the finance plan as would have been for the lease, with 6 months of extra payments-- the vehicle is then ours lock, stock, and barrel. We figure we'll save a year of financing and just over $10K in total costs.

I'm not saying that your situation will be identical to ours, but a little homework may save you a surprising amount of money.
Thanks! I'm only in the first trimester of research (which is why I'm here) and reading the different angles really helps. Definitely going to look into the bi-weekly option. Sounds like you guys chipped away a slab of marble only to expose a statue inside.

And yes, I said 'trimester'. The wife may not like it but it will be MY BABY this time!
 


bschmidt10

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Funny you mentioned that because this just happened 2 weeks ago to a co-worker. He got sandwiched in a multi-car accident off the freeway and his Nissan was totaled. Barely a year into the lease and his 2 grand... gone.

But yeah, that's definitely in my mind. Of course, I'm kinda known among my friends for not making smartest decisions in my life :D
My best advice for that, and I've been down the same road in life. Get a separate account that just has your automatic payments come out of it. Everything that I have that is an automatic payment comes out of that account. I total up all of those payments and have money pull from my main account (I added a buffer to start with) and transfer into my payment account every week. It's worked well, never a missed payment. And what I have in my other account is the money I have to play with. (I also have another account that has a little money pull for savings for times of need). It's a good way to start. Once you start getting enough saved up, you can look to start investing etc. (not that it's a great market to make any real money right now though)
 


bbag88

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Keep in mind with a lease... you pay sales tax for the vehicle as you go... so If you put $10,00 down you will need to pay tax on that amount and then each $224 has it's associated sales tax with that. instead of ALL the tax upfront with a purchase... unless you live in a non sales tax state. Also a lease typically may only give you half of the incentives, since you are only paying for (financing) half of the cost of the vehicle.


Ask the dealer for ALL hidden costs before you decide. and I second, third and fourth, the decision to hold on to as much of your $$ as possible.

smaller down payment means less potential headache later.
 


peterk9

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Keep in mind with a lease... you pay sales tax for the vehicle as you go... so If you put $10,00 down you will need to pay tax on that amount and then each $224 has it's associated sales tax with that. instead of ALL the tax upfront with a purchase... unless you live in a non sales tax state. Also a lease typically may only give you half of the incentives, since you are only paying for (financing) half of the cost of the vehicle.


Ask the dealer for ALL hidden costs before you decide. and I second, third and fourth, the decision to hold on to as much of your $$ as possible.

smaller down payment means less potential headache later.
All incentives apply in full on a lease. It's no different than a purchase in that regard.

Peter
 


Fentress24

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I have never really understood the reason for leasing a car if you plan to hold on to it long term. If you switch cars ever 2-3 years it could make sense, or if you have a work car allowance or write off.

You are technically renting a vehicle from Ford for the next 3 years. I understand the lower payments, but you have a significant down payment. I would wait for them to run a 60 month 0% or even an 72 month 0% and just buy it.

You will only pay $224/month on the lease but you will have nothing to show for it at the end of the 36 months. So 224/month x 36 months + you $10k downpayment equals a total amount paid of $18,064. Then you will have to either finance or pay cash at the end of your lease. A used 2013 Explorer Sport with less than 40k miles is currently selling for 35-40k. Say they cut you a deal and you only pay $30k at the end of the lease. You are out $48k or more for a truck you could have just bought for $44-45.

If you can get 0% for 60 months, put down $10k, your payments would be roughly $583. Over that same 36 months you would pay $20,988 + your down payment, but own the truck. If you get tired or it, or total it, you will have equity to work with. If you can save more $ and put more down while you research, you can get your payments even lower.

Long story short, If you plan to buy the lease out at the end, just wait for a good sale and buy the truck.

If you plan to drive for 2-3 years and move on, lease. If you have a car allowance or can write the payment off, lease.
 

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peterk9

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I like to change vehicles every 3-4 years and have leased my last 6 vehicles. As for equity, you can build that up in a lease as well. My 2011 Limited was on a 4 year lease but the dealer really wanted it back after 3 years. They told me I had quite a bit of equity built up in it and having only 11,200 miles on it they obviously had a buyer for it. They paid off the remaining year on the lease, bought it from Ford and sold it plus gave me a very good deal on the 2014 MKT sitting in the showroom and a 3 year lease at 0%. As of today, I have 1 year remaining on that one. I agree that if you plan to buy it at lease end, you are better off financially to purchase it to start with. But having said that, a lease will allow you to test drive it for a period of time to see if you really want to keep it or not. Also, if the vehicle has been problematic during the lease you can simply walk away from it at lease end when it likely is not under warranty any longer.

Peter
 


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