jwt996

I am considering purchasing my 99 C2 (60k miles) which is at the end of its lease in November. The residual purchase price is $38K. Kelly Blue Book shows a Trade-In value of $32K. The Retail Value is between $43-45K. Is there a chance that the 3rd party, not Porsche, leasing company would consider letting me purchase the car for less than the residual. If I were to turn the car back in to them, they probably would not get close to the residual value from a wholesaler or Porsche dealer. Anyone have any experience with this situation?

jcnesq

I understand most leasing companies will negotiate a buy-out price at lease end. I think most leasing companies simply sell off returned cars through the major auctions, so you should have a good chance of buying the car at a wholesale price.

jwt996

Jim, thanks for the reply. Helps me negotiate to know that it is a common practice. John

nicoff

I am on a similar boat. I was contacted by the leasing company asking me what i wanted to do with the car. I asked them if they would entertain an offer for less than the contract lease end buy-out price. The agent basically said no. I said to him that the current market price is lower than the lease end buy-out price. He responded that they have some type of gap insurance that covers them in cases like this. Not sure if what the man said was true or not. I guess I will find out when the lease comes to an end.

sly

A smart leasing company should mitigate its risks. Buying gap Insurance would be a prudent way of doing that, so it's certainly plausible.

mrpc12

That's the beauty of a lease. If the car is worth more than the residual you buy it. If it's not you turn it in and walk away.

Ninetynine996

All Dealers now buy gap insurance. You could easily neg. off the residual value 3-4 years ago. Too many dealers got burned esp with SUVs...now most dealers have no motivation to deal

jcnesq

I recently did a lease assignment with my Boxster S, leased with Chase. The process was extremely slow and frustrating though I was successful and passed the car on to someone who will lease until the end, when Chase can take what will probably be a big loss. I tried to negotiate with Chase but they said they will only negotiate in the last six months of the lease - but it was pretty clear they would negotiate then. Also with the Bank of America lease for my wife's Land Cruiser which we turned in late last year, it was clear they would have negotiated (but it was at the lease end and we didn't want it so we just gave it back and let them take a big loss). It would make sense that dealers and small leasing companies would insure the risk if they could, but my guess is the bigger banks and manufacturers probably carry the risk themselves so they would probably be more open to negotiate.

lexpilot

Cultivate a contact in the used car biz. One that deals at the car auctions. I used a wholesale broker out of LA a while back to buy an auction LS Lexus. I know a wholesaler in Portland, also. But you need a Puget Sound guy.
Your dealer will most likely put your car on his lot and sell it. Or he may put it up at auction especially if it is October through February.

OH997

Even if the lease companies have gap insurance they are only going to get wholesale for the car and then the insurance company will make up the difference. Your $32,000 wholesale number is pretty acurate. Ask to speak to a supervisor. If the car sells at the auction for $32,000 the lease company will end up with a number between $30 and $31K.

frayed

If gap insurance only covers cars sold at auction or to a dealer, then what the rep told you makes sense. I wouldn't doubt that these insurance policies only cover a systematic sales process, otherwise lease companies would be motivated to never take cars back, and sell to the lessee *under* auction price if the gap insurance covers such transactions. Seems like a risk that insurance companies would want to minimize, and address it by requiring auction liquidation or dealer sales.

I'm guessing though, I have only limited knowledge of the transactional process of used car buying/selling. You should be able to confirm by asking. If they don't confirm/deny, offer them $1k over auction and see what they say.

But, if I am right, a local used car dealer might be able to buy the car for you; pay them $500 for doing nothing and turn around and sell the car to you at the purchase price plus the $500 transacational fee.

jwt996

I talked with the Lease company and they encouraged me to make an offer, knowing it will be less than the Residual and at the Kelly Blue Book Trade-In price. I will probably offer today and see what happens. If so, I would be getting the car at $6K less than the Residual and 'prox $10K less than the KBB Retail value.

frayed

Sweet. Good luck.