My lease is almost up on my Honda Pilot and would like to keep it. Is the residual value negotiable ?

Answer 1

There are a number of different ways to look at the lease-end purchase price as stated in your lease contract and whether it's a fair price to pay:

1) When leasing, you pay for the car's depreciation. The remainder is the residual, which is the same as your lease end purchase price. So, by buying the car for the residual value, you're simply paying for the part of the car' s original price that you haven't already paid. It's a fair price in this respect. Nobody gets cheated.

2) However, another way to look at the price is from a market value viewpoint. If you had to buy another car (used), from an individual or dealer, just like the one you've been leasing, with the same equipment and mileage, what would you have to pay? This would be a fair price to you if you bought your leased car from the lease company, although it might not be quite fair to the lease company if your residual had been set high (and you benefited by making low payments).

3) Finally, another way to look at it. If you were to return your car to the lease company, they would only expect to get wholesale price (think trade-in value) by selling it at a dealer auction. In this respect, any price you offer them that is more than wholesale is fair to them, and a good deal for you.

Having said the above, be aware that many lease companies have "residual insurance" that makes up the difference between wholesale auction price and contract residual value. So, they have no reason to want to negotiate with you on the purchase price since they'll get the full price anyway. There's no way for us consumers to know, however, whether or not the lease company has the insurance. They'll either negotiate with you or they won't.

I hope this helps.

Answer 2

I have never heard of the residual value being negotiated. If they will not do it than don't buy the car as you took your lease out on the MSRP price which means they charged you top dollar for the car, so you are at least 2,000 to 3,000 over charged. Best advice is to turn it back in and buy another one. If you like a new car every 2 to 3 yrs. than leasing is not bad, if you are going to keep it for a long time than buy it. By going to either going to edmunds.com or kellybluebook.com to find out what price you should pay will be very helpful when getting a new one.

Answer 3

The residual value is something that can me calculated and therefor is not negotiable, but a purchase price is definitely negotiable. If you really want to keep it, what I would do is to find out from someone else what the vehicle is really worth, and then offer them a purchase price when you turn it in. Make sure you have a price in mind that is a fair representation of the actual worth of the vehicle, but don't get suckered by some polished car salesman into paying way too much. They are not your friends, and will use every tactic they can think of to get more money out of you. They are there, however, to sell cars. If you know someone who is familiar with car values and mechanics, it wouldn't hurt to bring them along to dispute any BS the salesman may try to give you. Good luck!

Answer 4

Exactly why I purchase cars! And keep them 10 years. You already paid off a interest only loan on this Honda and now are going out for more finance charges. And just when you start to love this Pilot you have to turn it in. :-( My suggestion turn in the lease take the hit for high mileage wear and tear...Now go out and buy a new Honda, and pay for it 7 years.

Answer 5

Not really.