Buying a leased truck

[Radshooter]

Have any of you ever leased a truck, then decided to keep it? We leased our truck (the one in my sig) with intentions of turning it back in, but it has been so reliable, and I still don't trust the new engines yet, so we decided to keep it instead of turning it back in.

Not sure how to go about financing the balance. Should I try to go through Dodge, or do you think it would be better to start shopping for a bank loan?

Any comments from someone who has done this would be appreciated. And please, no lectures about leasing and how expensive it is. I already found that out :{

Steve

 

[rbattelle]

Should I try to go through Dodge, or do you think it would be better to start shopping for a bank loan?

I've never been involved with a lease, but I thought I might comment on this part of your question.



I think the best way to handle the situation is to apply for a loan at a bank or credit union (probably get a better interest rate at a credit union). If necessary, apply at several until you get a rate you can live with. In this day and age, a loan application doesn't really take that long, particularly at the bank where you normally do business.



Then take that loan rate to the dealer and ask whether they'll beat it. If they do, you're golden. If not, it doesn't matter because you've already shopped around for a rate you can live with.



Ryan

 

[Radshooter]

Thanks Ryan. That is kinda of what I was thinking also. Nice to get some reinforcement. It may even be worth opening an account at a credit union.

This truck only has 36,000 miles, and it isn't even broken in yet.

Steve

 

[JDiepstra]

The way banks have been tightening up on credit nowadays you might just be better off going to the dealership to see what they have to offer. They can shop 50 places at once and I bet they can get as good of a deal as your bank or credit union can. I used to work for National City and their auto rates are too high. Don't waste your time there. No, I was not a teller.

 

[rbattelle]

They can shop 50 places at once and I bet they can get as good of a deal as your bank or credit union can.

That's true. Most of the time the dealer will beat financing you obtain elsewhere. But having a loan already secured means the dealer is incentivized to work harder to earn your business.

Ryan

 

[DMcGalliard]

Buying the leased truck

I have done it a number of times on trucks and equipment. Look at the value as specified in the lease at the end of the lease. Then look at what a truck with those miles and condition would cost on the open market. Generally it will cost less to buy your truck, unless the bank has loaded the lease so that it goes back to the dealer. If the return value is high you may have to pay the difference between it's value and market value. Depends of the terms of the lease, read the lease carefully. My last deal was on a John Deere tractor, the end value was about 7k, a replacement would have cost 15k to 20k. I would have been crazy not to buy it. The John Deere lease was clean, pay the money take the tractor. Oo.



Dave Mc

 

[surfbeetle]

I did what you are contemplating on two different vehicles, one my 95 Dodge, the other on an Isuzu Rodeo. The Dodge's value at the end of the lease was pretty much on with the value set in the lease. We just went to our bank and bought out the lease financing. With the Rodeo, it was a bit different. We went to the dealer with the possible intent on returning it. This was after the Isuzu troopers had been knocked in crash tests. As a result, the Rodeo's value dropped below what was on the lease. We got a little bit lower, but not much. The dealers IMHO don't really want your car back. See what you can negotiate. With current values of our big trucks dropping because of the fuel issues, you may be able get a better deal on it.

 

[jelag]

All the trucks we buy for the business we pay cash for... our CPA has advised us that a lease is the most costly way to buy anything... yea you get some tax breaks but nothing that offsets the higher costs...

We keep them for 450-500K miles and want the lowest cost per mile... to get that we buy them outright, and drive them until the engine is worn out and finally send them to an auction...