Friday, February 26, 2010

Buy a means of transportation at the end of your lease

You’ve come to the end of your lease and you like you motor vehicle enough you want
to keep it in the driveway. Just like acquiring a used means of transportation, there is some
research to be done to nail a good deal.

First, you require to know the cost of buying out your contract. Read the fine
print of your contract and look for the “purchase option price”. This
price is set by the contracting company and usually comprises the residual
significance of the auto-vehicle at the end of the agreement plus a purchase-option fee
ranging from 0 to 0. When you signed on the dotted line, your
monthly payments were calculated as the difference between the car’s
sticker price and its estimated price at the end of the lease, plus a
monthly financing fee. This estimated price of the auto-vehicle assessment at the end
of the lease is what is termed in contracting jargon “residual price”. It is
the expected depreciation – or loss in worth – of the vehicle over the
scheduled-lease period.  For example, a vehicle with a sticker price of
,000 and a 50% residual percentage will have an estimated ,000
worth at lease end.

Now that you know the cost of purchasing out your contract, you must to determine
the actual assessment, also termed “market worth”, of your motor vehicle.  So, how
much does your auto-vehicle retail for in the market? To pin down a good, solid
estimate you have to to do some pricing research. Check the price of the
vehicle, with similar mileage and condition, with different dealers. Use
online pricing websites, such as, and Kelly Blue Book
for detailed pricing information. Gleaning pricing information from various
sources should give you a fair estimate of your means of transportation’s retail significance.

All you have to do now is compare the two amounts. If the residual value is
lower than the actual retail assessment, than you’re into a winner.
Unfortunately, there is a good chance a auto-vehicle coming off a contract is a little
on the high side.
Don’t despair though. contracting companies know as much that residual values
on their vehicles are greater than their market worth and as such are
always on the look out for offers. You can knock down on the price of your
leased vehicle with some smooth negotiating tactics. Put forward a price
that is below your actual target and negotiate hard until you wind up near
that figure.

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