Buying out a lease - work with dealer or go right to bank?

[Junior88]

I'm planning to buyout my lease on my '20 Gladiator Overland due to a strong positive equity position in the truck.

What has been anyone's experience in a Jeep buyout transaction? My lease is with US Bank, do folks go right to US Bank to complete the buyout or have you worked with the dealer? I hear the dealer can maybe do stuff like make it a CPO and help you out with extended warranty coverage, has anyone found that worth it? Or more likely to be a money grab from the dealer?

Appreciate any thoughts or insights!

Sponsored

 

[jay21mojave]

IMO, I'd work with the Dealer - they will have more information on working the lease buy out. Check to verify your lease has buy out and if the payments continue at the same amount and how long the loan will be to pay off completely. Also check on pay off early after you get your buy out started.

 

[Brahmajoe]

Following thread.

 

[Yellow1098]

I will also be in this same situation soon

 

[Erievon]

Subscribing, same boat. 20 Overland with US Bank, and the equity is too good to not buy out.

I don't really think the dealer has any stake in this. If the dealer was involved I think they'd buy it from US Bank and sell it to you again. They may be able to add warranty/cpo, but you're going to pay above your buyout to get that, they won't just give it to you for free. And they hope to make money on financing your buyout.

You could just as easily buy it from US Bank, and then buy the extended warranty from any dealer (Gupton maybe, I know I've seen a few people post about good warranty deals being offered by some of our below invoice dealers).

 

[Mr._Bill]

You can always call the company that holds the lease and ask them. You should get instructions in the mail, near the end of the lease, outlining your options and what to do based on your choice.

If you go to the dealer, they will just contact the leasing company and be a middleman in the process.

 

[Sandevino]

If you’re buying it out, meaning paying cash for the balance of the lease, deal direct with the leaseholder.

 

[Junior88]

If you’re buying it out, meaning paying cash for the balance of the lease, deal direct with the leaseholder.

Thanks - this is the route in which I am intending to approach the buyout. I guess no real downside here other than I'll become more responsible for handling taxes and registration, right?

I had to ask though because my neighbor just bought out his Tacoma, he had a $29k buyout and went to the dealer to go through the process. Somehow he ended up putting $5k down and still financing $30k with Toyota. No idea where all the extras came from, he just said the dealer kept telling him they were non-negotiable. Hearsay and anecdotal at this point, but curious if any Jeepers have dealt with anything similar.

At the end of the day, the buyout choice is obvious. Why give the car to the dealer if I can sell it back to them

 

[Hootbro]

If at all possible, deal directly with the leaseholder. That may mean securing financing ahead of time on your own.

Most dealerships will still charge you a fee (usually $500-$800) if you are running financing through them for the buyout. I cannot see how they can make it a CPO without you in theory surrendering it and taking back into inventory and that adding on more cost.

 

[Rahkmalla]

had a $29k buyout and went to the dealer to go through the process. Somehow he ended up putting $5k down and still financing $30k with Toyot

In my state a buyout of 29k would typically be about 32.5k financed.

Let's assume your neighbor fudged the numbers because I've rarely met a car buyer who hasnt. Your sales tax plus excise tax is 8.75% 29,700 plus 8.75% plus 1800 (doc, reg, plates, etc estimated) is right around 34k. If he put 4.5k down he could be financing 29.5k easily.

All you gotta do is round a LOT and all those number he gave you make sense.

If someone puts down 4.5k and finances 29.5k, there are 3 kinds of people:

1. I only put down 4k and only had to finance 29!

2. I had to put down 5k and still had to finance 30...

3. I have no idea what I paid, they only told me the monthly payment.

 

[Proximo]

IMO, if you're financing the purchase after lease, credit unions have the best rates. So, contact the lease holder to get the end of lease purchase price, and finance through the credit union.

 

[CT_Gladiator]

I bought out the lease on my JKU directly from US Bank.

It took 5 months to complete the process.

I will never deal with US Bank again.

Now that there is positive equity on leased vehicles, the banks make it very difficult to purchase at the end.

 

[Labswine]

I did this with both my Jeeps...my 20 JTO (6/19 build) and my 19 Grand Cherokee Ltd. (also 6/19 build). Two different banks. The JTO was also through US Bank.

I called the bank and got the pay off amount (with the balance of sales tax included) and sent them a check for that amount. They returned a check for the amount of the sales tax owed, I had them make it payable to the PA DMV, and went to the local title place once I got the title from them and re-titled it in my name.

My GC was a little different in that it was with a small credit union in mid-PA. I had to coach them through the same process as they said they couldn't do it that way, but I got them to do it just that way. It was better to have a check for the balance of the sales tax owed from the bank itself, made payable to the PA DMV, because generally, the title places either want a certified bank check or cash for that (I'm willing to bet they've been stiffed too many times with bad personal checks).

You can easily do it yourself instead of going back to the stealership.

 

[CT_Gladiator]

Sounds like you had a much easier transaction with US Bank than I did.

Maybe mine was a fluke.

 

[Mattileous]

My lease is up in Feb. '24 and is through US Bank. I have been on the fence about if I want to keep it or let it go. Sounds like I need to shop some options for financing prior to Feb. Will banks/credit unions make me use a used car loan rate or a new car loan rate? I have leased since new but since its going to be 3 years old I wasn't sure what rates to expect to have to use.

Sponsored