I am new to leasing, have a Mercedes who's lease is up in a few months, and I have a quick question. I read somewhere that you can turn a lease in, regardless of the make, to any dealership and if the car is worth more than the residual you can use this as a down payment. I was wondering if someone had any info on how this works or if I am just way off base.

Thanks!

 

It isn't quite so easy as that. Basically the way it works is the dealership buys the car from the leasing company at the current "pay off" value. The difference between the offer that the dealership makes and the pay off value is what you have to work with. If the number is positive (car is worth more than the pay off) then the dealership owes you money, and they can cut you a check or you can use it for a down payment. If that number is negative (pay off is more than the value of the car) then you owe the dealership, and they can generally roll that into the financing for a new vehicle.

So, you can't "turn in" the car but you can sell it to any dealership. Doesn't matter if you're buying a car there or not (unless your net value is negative, of course.)

Also keep in mind that when you buy off a lease there are usually other fees (like the lease disposition fee) which will probably be assessed by the leasing company after the sale and you'll receive a bill in the mail later. Those fees are generally in the $250-$400 range or so. However you won't have to worry about any other lease termination fees related to over mileage or incidentals (tire wear, paint chips, dings, etc.) normally incurred at lease end.

 

Merlin, thanks for the reply. So in my case, it sounds like it would make sense to take my Mercedes to the Jaguar dealership when the lease is up and see what I could get for it?

 

Merlin is correct, call your leasing company and ask for the "pay off" value. This will roughly be the residual + remaining lease payments (the couple of months you have left). You can then go to any dealer to see how much your car is worth in trade-in. If it's more than the payoff, you net the difference. Less, you need to come up with the difference. You can also try to private party sell it (typically getting more than trade-in). But obviously that's much more work. You can even go to a place like CarMax that will buy your car w/o you buying one of their cars. But they will give you basically wholesale value so even less than typical dealer trade-in.

If you are looking to get a Jag you can use that as leverage when negotiating the Jag's price and the trade-in value of the MB. Basically you can tell them, "give me a good deal, or I'll just keep the MB, I don't really need a Jag. MB runs fine and I like it..."

 

It's certainly worth checking into. You might want to get quotes from a couple other dealerships (including your MB dealer) as well as places like CarMax, etc. That way you can sell the car to whomever makes the best offer, and then you can go cash in hand to the Jag dealer.

However, before you go into a dealership make sure you do your homework and check online (or call the financing company) to get your pay-off value and also check to see what the blue book and black book value of your car looks like so you have a place to negotiate from when chatting with the dealership.

I also suggest having a number (or range) in mind that you're comfortable with before starting the negotiations. That applies to both what you'll accept for the value of your trade in, as well as what you're willing to pay on a new car.

 

Awesome! Thank you guys for the feedback on this. Still have a handful of months left but have settled on going with the F-Type so good info to have.