Lease residual/buyout value

GurinderM

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Hey guys,

My moms lease on her 2017 LX is up in a few months and we were looking for some guidance on what the best thing to do would be.

she loves the car,and will be significantly under mileage.On her lease agreement it says *estimated residual value* 9.5k CDN.

clearly the prices of LX’s with the mileage and condition she has on it right now is significantly higher (13k CDN or so)

my question: is the dealer obligated to sell the car at the buyout value listed on the lease holder agreement? Or will they re-evaluate it at lease end?
Thanks
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StevenGregory

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Assuming the laws in Canada are the same as Illinois in the US, the residual value on the lease, is the price you would pay to buy the auto at the end of the lease term. Assuming you didn't make a huge up-front payment on your lease, in many cases they will put you into a brand-new comparable or better new car for the same lease payment.

The economics are on the dealer's side as they will take your good condition car back without having to put much into other than a detailing, and then sell it used for several thousand more that the residual.
 
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GurinderM

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Assuming the laws in Canada are the same as Illinois in the US, the residual value on the lease, is the price you would pay to buy the auto at the end of the lease term. Assuming you didn't make a huge up-front payment on your lease, in many cases they will put you into a brand-new comparable or better new car for the same lease payment.

The economics are on the dealer's side as they will take your good condition car back without having to put much into other than a detailing, and then sell it used for several thousand more that the residual.
So the lease end value printed on the lease agreement is the actual buyout price then?

is the dealer able to change that price if the car is under KMs?
 

StevenGregory

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So the lease end value printed on the lease agreement is the actual buyout price then?

is the dealer able to change that price if the car is under KMs?
The residual (lease end value) is the actual buy-out price at the end of the lease irrespective of mileage. Assuming you are going to turn the car in, if you are under the mileage limit, it is to the dealer's benefit when he or she goes to sell your used car--something that you might use as a negotiating factor if you're going to lease or purchase another car from the dealer. Since the care is most assuredly worth considerably more than the lease-end value, I would recommend buying it at the conclusion of the lease term.
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