Pretty true statement if the residual is as you say. Good advice.

 

It is true 90% of the time with an Evo. But be aware that a) it's not always the case with all car. And b) it's not always the case with Evo's.

If the car is WAY over miles then it can be worthless than the residual. Or if the car is not in good shape, e.g. it's been in multiple accidents or something. But yes, typically, even if it's several thousand over miles it's still going to be worth more than it's residual.

Again, this is not the case with all cars! In fact, some manufacturers do the opposite. There are two different models of how to get people to buy a new car when their lease is up. The dickbag way it to make sure the car is not worth its residual.

"So, Mr. Customer, it looks like it's not in your best interest to buy out your lease. It's market value is about $2000 less than its buy out. So, the best course of action it to just turn it in. While you're here, did you want look at another car." Now you're at their dealership, with out a car!

The other way, and generally Mitsubishi's way is to do this, "Good new Mr. Customer. It looks like we could buy your car on trade for about $2000 more than what the buy out is. If we could get you some equity, would you want to take look at the newer 20XX model?"

 

I'll chime in on this one. I know we all don't expect to go into a financial hardship, but it happens. Maybe you get behind on payments, or worse file for bankruptcy. If that's the case, when your lease is up it'll be hard as hell to get another vehicle. At least the one you'd want for a low APR, and the price you'd like. The dealerships can bone you like it was said above, and sell you a new/used car for over book and a high APR. I know this, because it happened to my parents while they were going through a divorce.

If you're not leasing you can potentially have more time and better options when things get better.

 

Or you could accept your situation and realize that what your finances used to look like, is not what they look like any more. You can't expect to live the same way after something like a divorce, or bankruptcy, repo, or foreclosure dramatically affected your credit. Or at least not for a while until you've rebuilt your credit. This means not buying $35,000 sports cars.

Plus, if you make all your payments on time, MMCA guarantees you an approval on new Mitsubishi.

Futhermore, on the flip side of that. If your situation goes to hell in a and basket, you're not stuck in a car you can no longer afford for 4 years, it would be shorter.

 

Here is my story:

I had traded in my paid off truck for my wife's brand new Honda pilot (mom taxi). I inherited her 2011 Hyundai Sonata SE.

Driving that car around for 3 months pretty much sucked big time.

I found a used 2012 EVO GSR for $31,995 with 9,000 miles at a non-Mitsubishi dealership. Had new Blizzak Ws70s snows (excited to try them this winter).

I got $6,100 trade-in equity on the Hyundai Sonata after the $11,000 lien was paid which brought my balance to $25,895. Did not get any budge in the selling price but got them to come up on the trade in. (Sonata had a frontal collision on the car fax - hard to negotiate so $17,100 was awesome)

Have my lease paperwork here from my Credit Union (through AFG) in front of me. 2 year lease 15k Miles/Year.

Lease rate 2.99%. Finance Charge (cost of the lease in interest payments) $1,430.41.
Total Amount Financed $25,895. Total Payments $27,325.41.

This is 23 payments of $243.50 beginning 4/15/13
1 payment (buy out) $21,725 on 3/15/2015

So at the end of my lease, I will have my EVO with about 30k-40k miles and an option to finance $21,725.

Have just bolt-on mods and fully upgraded stereo all done within 2 months of getting the car. Have until March 2015 to decide if I want to keep it all or who knows if Premium gas will cost $7 a gallon by then. But being 33 years old, 1 kid in daycare and 1 on the way, the cheap lease payments made sense. If not only to get the opportunity to own an EVO for a couple years but also know that it was taken care of for at least 30k miles of it's life. It's more than just a car, it's a toy as well. Actually know the previous owner from this forum who was selling the stock summer tires after he traded it in.

 

You can't lease a used vehicle.

What you're doing is something called a balloon loan. It's very similar to a lease in the way that it works. But you can technically only lease a vehicle brand new from the manufacturer, or an authorized (by the manufacturer) lease company.

 

Absolutely correct - I misspoke

I was blinded by the car and wasn't sure if I was making good financial sense at the time. Any opinions?



This is the verbiage from my credit union:

Enjoy the Benefits of Leasing Without the Hassle
•Don't lock into a lease! Auto Advantage gives you the option to terminate your loan without penalty simply by paying it off at any time.
•Choose your own mileage! Choose from 12,000, 15,000, or 18,000 miles per year and only $0.10 per mile thereafter.
•More Flexible options at maturity! Choose from four easy options to end your Auto Advantage loan:
◦Sell the vehicle and pay off the loan balance
◦Trade the vehicle in and pay off the loan balance
◦Keep the vehicle and refinance the remaining amount owed
◦Return the vehicle

 

Yup, it's exactly like a lease. Only you can do it with used car (they have to be newer though). And you get a title.