What is residue value when buying a car?

Question

I am thinking of buying a new car, but the monthly payment is going to be huge, now the sales person has recommended residue on the car of a certain percentage that will lower the monthly payment, but after 2 years sell the car? How does it work?

Answer 1

The residue is the estimated value of the car at the time your payments has been worked out to. You will not get anything back on the sale the money goes to the seller in exchange for the cheaper price that got your finance payments down to where you could afford them it is a legitimate way of doing business.

Answer 2

Remember: When the honeymoon period is over with you and your car, your payments will continue to be HUGE and you will be sorry.

Huge payments usually mean you're giving either $0 downpayment or close to nothing. This also means that you will never have equity on that car because the depreciation begins before the ink dries on the papers you sign.

In short... you will end up owing more on your loan than the car is worth. The only thing "residual" with you will be what is left of your credit or savings account!

Answer 3

Its called residual value, that means when your ready to give up the car the actual value will be the residual value on the market . the only way to protect your residual value is to keep the milage low and the car well maintained, and stay away from KIA it is pure crap. when you go to trade it in at a regular dealer they wont even allow you anything Korean rust buckets.

Answer 4

Never listen to the salesman they just want you to buy a car they do not care about your financial situation. Go to your bank and get pre-approved. It will be a lower interest rate loan and you will be able to deal with the salesman like you have cash.

Answer 5

Never buy a brand new car. Just get a slightly used one.there much cheaper and just as good.

Answer 6

I don t know . I wonder how it is calculated ? MRSP OR NEGOTIATED PRICE at the time of leasing .