If you are just talking about using all of your allowed miles, the price difference is not very much on the value of a 2-3 year old car when you are talking about the difference between a few thousand miles.

Most leases are "closed-end" leases, which means that residual value is clearly stated at the start of your lease.

 

I lease mine and got a loan to buy it outright at the end. I got my car loan through NASA credit union though.

 

Not true, you can, in fact, lease a used car. I've done it twice before.

 

What if you sign a 2 year lease and you move out of state before the lease is over. Does it change anything?

 

Where you move too after you sign a lease means nothing... You can return the lease to any Certified Mitsu Dealer wherever you are living... as you stay inside the U.S.

 

Great info here. An option not discussed here is having someone assume your lease. This essentially slides the current "owner" out of the lease and slides in a new one. Your continued liability as the original owner varies by lender. You can find detailed information at swapalease.com. They also have listings for individuals interested in doing this. LeaseTrader.com is another such site.

 

There was a previous comment that your residual value can not be changed on a closed end lease (which most are today). That's not entirely true.

More lenders have added special early lease termination penalties that essentially can change your residual under particular circumstances. Now they can't change it if you turn it in. But they often have a 90 day period at the end of your lease that if you trade it because you have equity in your vehicle they can adjust the purchase price to swing the equity to them. Obviously this is lender specific but something to keep in mind as you near the end of your lease.

 

When I describe a lease to someone I tell them you are simply agreeing to the trade in price when you buy the vehicle as well as the condition of the vehicle (i.e. miles). If you can find a better deal (including purchasing because you want to keep it) you can do that at any point in the lease.

Most people are also confused by how lease payment is calculated. It's a balloon payment (meaning interest only) on the residual. That's added to conventional payment for what you purchased above the residual. Which is negotiated purchase price - down payment. But then that's all converted into rent payments so you owe all of it. The other variable is Sales tax as dictated by your state. Some states charge full sales tax. Some only charge on the amount above the residual.


Years ago the payoff payment was actually the residual plus what you owed on the conventional portion of the loan which was a lower amount. But with it being considered rental payments now, you owe all of it including the interest the lender planned on making for the time you still have left on your lease.

 

Great info guys!

 

Thanks for the reply but I just wanted to clarify the answer. At the time of negotiating my lease, I understood the Residual to be what I would have to pay once my lease was up if I wanted to purchase the car outright. I also assumed that once agreed upon at the signing of the lease agreement that this Residual was no longer negotiable, and that if I wanted the car, I would have to pony up this amount to buy it.

"When you go to buy the car out after your lease ends, you can (in SOME cases) negotiate a price with the leasing company for what you want to buy the car back for." This (from my understanding) states that I can indeed negotiate the final remaining purchase amount once the lease is up. You state also that the Residual is not negotiable. Technically, I guess it is no longer a Residual but has now changed from a Residual to a "buying price". Is that correct? Basically, at the initial stages, the expected purchase price at the end of the lease is called a Residual and that cannot be renegotiated once the lease papers are signed (and it determines your payments, etc)....BUT, once the lease is done and you are buying the car outright, the Residual is no longer called the Residual and is now the "purchasing price", which may be negotiable.

 

a residual is set by the bank, this will set your end of lease purchase price but is non negotiable as this is determined by the bank to be your car's market value after X months. Sometimes this may be artificially higher as an incentive to make the lease more attractive to move inventory. In some situations which I understand is rare you can negotiate your end of lease purchase price if you want the car.

 

Thank you. That was how I understood it....as in the residual being set and is non-negotiable. I just got confused when the whole "negotiate purchase price" came up when discussing purchasing the car at the end of the lease. Basically, possible, but very very unlikely.

 

also check out multiple security deposits with Mitsu, for every additional security deposit you put down they reduce your money factor. When I leased my EVO I could only put one down as the money factor was so low already it basically became 0 with the additional deposit, I will end up paying something ridiculously low like $30 over the life of the 2 year lease in interest. I never recommend putting down a down payment on a lease, but security deposits will be returned to you after you turn in your lease as long as there is no abnormal wear and tear.

in addition to negotiating I know you are already aware but a lot of people who never leased think they can not negotiate the purchase price (not the end of lease purchase price) which is fully negotiable. Sometimes dealers will just try to match the advertised "lease special" on the website but you can always do better.

one thing to add is it good to ask couple dealerships what the money factor is for the lease term, some dealerships will mark this up (just as they can mark up interest rates on a loan) and asking around gives you a consensus. Stuff like money factor is unfortunately usually not advertised and you need to ask a dealer (who can give you an inflated rate) and some forums members/dealers will list it. For example leasing is big with BMW and they usually advertise the rates on the BMW forums but there has been a crackdown on this in general as it hurts dealers when consumers know too much

 

Questions guys!

I want to return my leased car early because I'm going to order an SUV. I still have 4 payments left. I will just pay off the remaining 4 payments. The Mistu rep told me that I can only return the lease after I make my 4th last payment (meaning 3 payments left). If not, it will be considered a repossession. What different does it make if I return the car earlier or later? I will still make the remaining payments anyways. Why is it considered a repo if I return the car earlier than 3 months?

 

You have to assume responsibility of the lease for the lenght of the contract you signed. When you first got the car, you agree to a certain amount of months to maintain the car. So if you were to return early, you are essentialy violating the contract and thus they are able to report you as repo