DViOuS

so, my lease is about to end in december and i call up mazda credit for info on next steps on returning the car (inspection, return, etc) and other lease end options.

i really like the car, but i ain't paying $17.5k for the lease end buyout price when new rx8s are going for so cheap. however, mazda credit does not negotiate on buyout prices, either pay full or return the car...

i'm pretty sure you can negotiate with other car leases... is this just mazda credit playing hardball? has anyone successfully negotiated a cheaper buyout price?

BTW, i looked at how much rx8 are going for a dealer-only auctions - average conditions are going for ~14k (according manheim.com), i cant believe they rather me return than negotiate a fairer selling price... grrr...

rodrigo67

I'm very interested in this outcome because my lease ends in march and I was wondering how flexable mazda is going to be with the pricing on thier buyouts.

I have an 04 black 6sp, appearence touring and my buy out is 19200. I know this is way too high for a 30K miles 04 when people are buying 05's GT's with less milage for less money. It makes no financial sense to buy a car thats worth 14K for 19K. I am heavily leaning toward giving the car back also.

Another thing I'm interested in is the milage. Mazda says they will mail my options paperwork to me shortly before the lease ends, which I'm still too far out to get. I got a 30 month 30K deal, and my papers I got at signing say that anything over 30K, I pay 15 cents per mile while anything under what I paid for will be paid back at 15 cents per mile. Was anything mentioned about milage in your final papers sent to you?

It's really too bad, I would love the option to buy this thing but at the prices mazda wants, it would be better to let it go then to do something stupid and lose thousands over a car.

Hightshoe

As far as I've ever heard, lease buyout prices are non-negotiable.

icyur2

As far as I know, the "negotiable" part of the price is only valid during the buy: residual value. I wasn't able to negotiate with the salesman on the residual value of my car at the end of the lease. I have read that you can, but he was adamant that you can't. Anybody have feedback on this? Kind of late, but might be good info for the future.

Anyways, once that residual value has been agreed upon, you can't negotiate the buy out price, because that WAS the buy-out priced agreed during the initial sales agreement. If you want to chance it, return it, then go to the dealer auction? Never been to one of those..so..can't say that it would be a "good" thing. All I know is that my car is getting great gas mileage (avg. 19 mpg), and if I don't want to lose out, I'll literally have to buy this, even if it isn't worth what the market says.

Speaking of which...were you guys planning on keeping this car anyways? If so, who cares what you pay? I rather buy the car @19k (knowing everything was well kept by me, good gas mileage, etc.), vs. get rid of it, then jump onto a higher priced car for X yrs..

rglbegl

The only chance you get to negotiate buy out is the day you BEGIN your contract. This is where the CCR (Cap Cost Reduction) and Residual come in to play. Most people ignore these to get a better/lower monthly payment. You may be better off just buying a new one. I have only seen a couple of instances where someone had their buyout reduced, and they were still in the hole by thousands.
If you cant SELL it for what you owe, then why would you BUY it for that price?!?

And to answer you rhetoric about why they would rather have you return it than reduce the $$. - They can write the whole thing off as a loss if it is turned in. If you keep it, the vehicle is still considered collateral on a loan. Until the loan (your lease) is finalized ( you turning it in ) it is still an open account, thus, no write off for them . . .
I would go in to more detail, but this is boring stuff for most people

Beagle

no dice

my residual is 10k. sucks for you!

icyur2

From what I'm reading does this mean that you CAN negotiate your residual??? Did I get screw by the salesman: that option is only available for certain states??? Let me know if I am reading this right....thanks!

rglbegl

Yes you can negotiate the buyout. BUT ONLY ON THE DAY YOU BEGIN YOUR CONTRACT. This is a common trick to screw customers out of $$$.
After you sign the contract, you are locked in!!!
But that is okay - if it a lease, just give it back. As long as you are happy with the car and what you pay for it - smile. If the buyout is evil, just turn it in.

bascho

No offense, but why would any dealer have negotiated on the residual on a brand new model? The guys asking the negotiation questions have 2004's which is the first year of the RX8. Who would have thought these cars would have such horrible depreciation back then?

The reason people want to negotiate the buy-out is not because they are not willing to pay $19K for the RX8......it's because they don't want to pay $19K when the market value is $17K or less.

BTW, writing off the loss will not recover the actual loss......only a portion of it. Don't think for one second that MAC wants to lose $2K at auction.

fredw1

I think we are talking about buying the car at the end of the lease, and not really a buy out (which I associate with buying before the lease it out). In any event, I know several people who have been able to negotiate the price of a car at the end of the lease to less than the contracted residual). Their experience has been that the lessor really would prefer not to have a car back. Since 8's aren't moving real fast, if the lessor takes the car back, they will likely have to sell the car for less than the residual anyway, or send it to auction where who knows what they will get. For the lessor, it's simpler to have a buyer waiting, although they may not admit it. One of my friends asked about a reduced price, and the lessor said no, but then called him back a few weeks later with a counter offer. He negotiated further. Sounds like buying a new car all over again.

Another was able to re-lease his car for two years (after an initial 4-year lease) at a very favorable rate (with a very good residual). He figured he might actually save money even if he ended up buying the car at six years old (new payments plus new residual) compared to buying at the original 4-year residual. Go figure.

Razz1

you can continue payments instead of returning the car.

I did that twice with Mitsubishi, they let me pay month by month.

Call up corporate finance.

Do want to buy someone elses 8? How do you know how they drove it?

What about the the paint chips and other used conditions that are not on your 8 now?

Lease is a fact of life. It is the same as a buy. Try to sell a car you are buying.

you are always upside down. Value 17k owe 19k. So what the hell is the differance?

Just buy it. Or better yet contiue payments, after about one more the buyout is closer to real value!

rglbegl

bascho - you are absolutely right. I forgot we were talking about the first year of a new car. Price negotiation is tough in that case. and you are right about the write off too. I forget to ad that they only get to write off the portion they do not recover after selling the car elsewhere. But that still means they get the whole amount of the original sale price.
Those who have negotiated their buyout, I will bet were with someone other than Mazda acceptence.(MAC)
Again, I work for Toyota, So I go off of what I see there. And Toyota almost NEVER negotiates buy out. (except in special cases . . ie fraud, closed dealers . . )

bascho

Toyota is a totally different story......with the resale value they have (for the most part), if I were them I wouldn't negotiate either.

bascho

I've never heard of the re-lease option....but I'm not surprised. I would agree that the lessor SHOULD negotiate with a perspective buyer to eliminate the hassle of the auction and risk of loss. Unfortunately I've never heard any stories of people negotiating with MAC.....but I have heard about negotiations with Chrysler and GM.

YT1300

I'm pretty sure you can't negotiate the buy-out price of the lease at its termination; the residual value is only really negotiable at the beginning of the lease. With most cars, the buy-out price is more than what the car is worth if you tried to sell it. Mazda will make money on you, either way.

Razz1

That's why you continue payments until the buy out is more resonable.

Usually they don't want the car back as they don't make any money and it just goes up for auction.

killerfish

I successfully negotiated down my lease on a Dodge Durango a few years back. My residual was $18,500, but the truck was only really worth $16,000. I called the lease company and successfully got them to take $16,000. Here's why it worked:

1) I had the $16,000 in cash; net Cash is KING
2) I didn't lease through the automotive company (ie, Chrysler Financial). I leased through Chase I believe.

Net, I can see why Mazda Credit wouldn't negotiate. But, going through a 3rd party finance may work. My logic to Chase was this "Ok, if I walk away, you have to eat the expense of wholesale/etc. vs. getting $16k from me directly"

Make sense?

KF

rodrigo67

my payments were 279 per month...

SpeedB

I am a Mazda/Lincoln Mercury salesman and lease end values are determined at the time of sale and no other time, Mazda uses the same leasing companies as ford who will not negotiate buyouts , and I think its pretty funny how people think that cash has this certain power over dealerships or leasing companies or any one car related except the 5grand used car salesman. If some one tells me they are paying cash it is actually worse because we dont get to make money off of the finance contract. Your best bet buddy is to turn it in and walk away from the car , lease a new one and def strip all your goodies off of your car cause if you dont than trust me that all the salesman who work at the dealership where you turn it in will do so before it goes to auction.

MTLbroker

I don't think that dealerships and their salespeople go out of their way to screw people as some posters here suggest. Rather, I think that there are misinformed consumers who always feel they are getting screwed because they do not take the time to research a transaction before signing on the dotted line.

To answer your question, there are 2 types of leases: Closed end and open ended leases.

Factory leases tend to be closed ended. I know that Mazda Credit offers closed ended leases. That means that you basically rent the car from the company, Mazda retains the rights to the car after the lease is up. The residual values are set by Mazda (it is their car after all) and usually are higher than wholesale future value. The benefit here is that Mazda is on the hook for any abnormal depreciation and not the consumer (assuming the the car is returned at lease end in reeasonable shape). So if you had a big accident with the car, it was repaired according to Mazda guidelines, when you return the car at lease end, it may not be worth the residual value, but it would be Mazda's problem. Not yours. Another benefit is that having a buyback means that Mazda takes less depreciation, thus lowering your payments. If you had stipulated that you wanted a low buy-back..... say $5,000. That is possible. It's just that your lease payments would be much higher. So you have to decide, which is it that you want. You can't burn the candle at both ends.

Independent leasing companies usually offer open ended leases. This can work for you, it can work against you, it depends. They will place the onus on you the lessee to guarantee the value of your vehicle at lease end. Recourse leasing (as opposed to factory no-recourse leases) means that the contract only terminates once you satisfy all terms of the lease as determined by the leasing company in a satisfactory manner. In this case, you could ask for a $20,000 buy back and have much lower lease payments if your credit and payment history allows, but you would be ultimately responsible for the buy-back. If you bring back the car at lease end and it is worth only $10,000, you would be responsible to pay the leasing company $10,000 difference in order to satisfy the terms of the lease as set out by the lessor. But most independent leasing companies aren't stupid. They wouldn't give any car a higher buyback than the factory. In fact, they tend to give much lower buy-back to ensure that they would be able to wholesale the car at lease end and not be forced to keep it in inventory. The corollary is that your payments tend to be higher than with a factory lease. One common trick is that if the customer brings back a car at lease end, and the residual value is higher than the wholesale value, the leasing company simply takes the difference and rolls it into the next lease (assuming you were to lease another car from them). If you are ever upside down at the end of a lease and try to walk away, from your obligation, they'll send a collection agency after you. Try it just for fun. You'll see that there is no such thing as a free lunch.

Sounds like you have a closed end lease. Your buyback is high, but it kept your payments low. You progable got a decent apr, so you enjoyed the use of their car with no recourse to you at lease end. In other words, you benefitted, so just pay them the money, keep your car and be done. A little knowledge goes a long way....

Shaida

When I leased my car back at the end of August, 2 dealers told me they were certain that MAC would negotiate the buy-out price. One said my $19,500 buy-out would most likely be $17,500 as that what was happening with the current stock of 04 models. He said the auction lots are full of 04's that aren't selling plus Mazda has to pay about $500 to get the car detailed and in selling condition. Perhaps he was BSing me.....

YT1300

I'll have to disagree with you, MTLbroker.

I do think that dealerships and salespeople aren't there to help the customer find the best financing and leasing available; they are there to sell their product (or at least, try to sell their product). The financing and leasing options are up to the customer (traditionally) to figure out before the purchase. Dealerships assumed the role of assisting in finding financing as fewer and fewer people were able to bring money to the dealership to buy the car. The manufacturer's financing arm is there to facilitate the purchase - and dangling a customer with tricky terms and whatnot is the surest way to lose the sale. They provide a relatively simple to understand way to finance or lease the car, and smooth the transaction.

However, you are correct in the types of leases that are available, and their pros and cons. Most major manufacturers offer closed-end leases as a default - they are easier to explain to customers, and lack the unwelcome 'surprises' of open-ended leases. An open-ended lease gone wrong is a sure way to lose any future business from that customer. Sure, anyone can 'do the research', but to say that the salespeople are just being good guys and aren't trying to twist the most money out of a sale isn't at all cynical. It's reality!

MTLbroker

Hopefully you had the wherewithall to have had any extraneous terms of the lease clearly itemized in writing on your lease contract that was signed by both yourself and the dealership representative. He may or may not have been BS-ing you, but it is unreasonable to assume that the rep would remember the specific terms of your particular lease at lease termination.
Again, it is irrelevant what the product or service you are purchasing. Your only true binding terms are itemized in a written, signed contract.

MazdaRich

Dealers are in business based on business, not based on what some "rules" state. Their object is to extract as much money as possible for a given vehicle. If you're going to pay them more than they can get for it on the free market, they will probably sell it to you, even if it's less than the buyout price.

MTLbroker

YT1300, I must disagree with you. You seem to contradict yourself in that you seem to indicate that dealerships make it easier for consumers to obtain financing, but you also indicate that they must at the same time be out to make sure that the buyer never gets a fair deal. Which one is it?

First of all, a dealership exists because it is still the most efficient way for a manufacturer to distribute a product and service their product. Fnancing and leasing is simply a method of facilitating a transaction. In fact, factory financing has allowed many individuals to qualify for a car that is not otherwise accessible to them. I'll bet that some on this board would not be driving a new car today if not for factory financing. In fact, banks have basically gotten out of the business of financing and leasing cars.

As for the sales, let's face it, whatever paid for your car, it is less then what the manufacturer suggests you pay for it. To the seller, you got a good deal. As a buyer you will always feel you got ripped off.

I hope your cynicism isn't confined only to the auto industry. I hope that you bring the same level of cynicism to everything, whether it is the dentist who says he has to redo a filling, a doctor who just came back from conference in Bermuda sponsored be Merck and prescribes you Vioxx. Surely, you don't think you will play golf as well as Tiger Woods if you use a Nike golf ball.......

I for one, am not that cynical. I treat the salesperson serving me with respect and always managed to make a good win-win deal just by arming myself with some basic knowledge like how payments are calculated, what is the average price for that same vehicle sold in the last month, what interest rates are, etc.. (I picked up a 2006 Nissan Maxima SE for my wife in August at $350 over invoice with a 2.9% apr lease and I'm a laydown sale. A little respect goes a long way).

I don't know about you, but I've never seen a help wanted ad stating:

"Wanted salesperson for a local large volume auto dealership looking for motivated people to lie, cheat, steal for prospective customers. Must be able to lie and smile at same time. Base salary, generous commissions, car supplied. Criminal record an asset."