Automotive

Lease buyout markup

  • Last Updated:
  • Aug 31st, 2021 4:26 pm
Newbie
Jun 21, 2020
89 posts
57 upvotes
Toronto
i’m guessing what they are doing is for example they tell me 20k but the actual buyout is 15k so they take 20k from me and buyout the car from ford credit for 15k and earn the difference.

Im not sure if this is what dealers do but that’s my conclusion.

This makes more sense thats why ford credit can’t or won’t disclose the buyout.
Deal Expert
User avatar
Jul 30, 2007
33234 posts
21163 upvotes
Toronto
I have my own lease calculator spreadsheet.

Take your Net capitalized amount (net of any down $) - (# of payments made to date on the monthly payment that has the principal portion of it, without taxes). Then you should have a calculated buyout balance on a monthly basis.

It is not rocket science.

I just did an example with a bmw lease and I can tell you exactly the calculated buyout value at the end of each month after the payment is made. At the end of the term, my calculated buyout value = what the lessor's assigned buyout value to be.
Deal Addict
Dec 14, 2007
2144 posts
1789 upvotes
Cookimonster wrote: i’m guessing what they are doing is for example they tell me 20k but the actual buyout is 15k so they take 20k from me and buyout the car from ford credit for 15k and earn the difference.

Im not sure if this is what dealers do but that’s my conclusion.

This makes more sense thats why ford credit can’t or won’t disclose the buyout.
Sounds exactly what I am thinking. This dealer should be named and shamed. Post their buyout quote if you can block out the personal info.
Deal Expert
User avatar
Jul 30, 2007
33234 posts
21163 upvotes
Toronto
For a simple illustration - taxes are ignored here

MSRP of the vehicle - $50,000.
No discount
All fees paid on "Due on delivery"

48 mo. term
2.98%
43% residual as per lessor = $21,500 as the buyout
$0 down


Monthly calculated payment = car's deprec portion $593.75 (*) + interest portion $88.78 = $682.53 + taxes

Total agreed price of car $50,000 - $0 down = $50,000

Month 1 - ($593.75) Balance $49,406.25

Month 12 - ($593.75) Balance $42,875.00

Month 48 - ($593.75) Balance $21,500 <<

Reconciliation: 48 months x $593.75 = $28,500 payment to-date.
Total agreed price $50,000 - $28,500 = $21,500 residual price


(*) msrp - discount + fees = total agreed price . Then Total agreed price $ - down $ - residual $) / 48 months = the above calculated amount
Deal Expert
User avatar
Jul 30, 2007
33234 posts
21163 upvotes
Toronto
MSRP of the vehicle - $50,000.
$2,500 discount
All fees paid on "Due on delivery"

48 mo. term
2.98%
43% residual as per lessor = $21,500 as the buyout
$2,000 down


Monthly calculated payment = car's deprec portion $500.00 (*) + interest portion $83.19 = $583.19 + taxes

Total agreed price of car $47,500 - $2,000 down = $45,500

Month 1 - ($500.00) Balance $45,000

Month 12 - ($500.00) Balance $39,500

Month 48 - ($500.00) Balance $21,500 <<

Reconciliation: 48 months x $500.00 = $24,00 payment to-date.
Total agreed price $47,500 - $2,000 down - $24,000 payment made = $21,500 residual price


(*) msrp - discount + fees = total agreed price . Then Total agreed price $ - down $ - residual $) / 48 months = the above calculated amount
Deal Expert
User avatar
Jul 30, 2007
33234 posts
21163 upvotes
Toronto
do take note the interest portion of the lease payment of 100% goes to the lessor's piggybank and therefore you will not see any of this part in the buyout amortization schedule.
Deal Addict
Jan 20, 2012
1132 posts
824 upvotes
Toronto
What model and year did you buy? Ford's website hides residual value but you can make calculation with this site. https://ic.gc.ca/app/scr/oca-bc/ssc/veh ... l?lang=eng

Based on current Ford Edge, Buyout is roughly 49% of value. This should give you an idea of your buyout.

Just peek through a few manufacture pricing building tool and looks like a few of them are hiding the Lease end pricing,

Offer very few information
Ford, Honda, Hyundai, Mercedes, Audi


Below are ones have clear pricing structure
BMW, Kia, Toyota, Lexus, Nissan, Infiniti,
Deal Addict
May 23, 2009
3681 posts
2388 upvotes
Mississauga
Block your personal information and post the lease agreement or buyout quote.
Deal Fanatic
User avatar
Sep 9, 2012
6959 posts
6077 upvotes
Oakville, ON
Cookimonster wrote: i’m guessing what they are doing is for example they tell me 20k but the actual buyout is 15k so they take 20k from me and buyout the car from ford credit for 15k and earn the difference.

Im not sure if this is what dealers do but that’s my conclusion.

This makes more sense thats why ford credit can’t or won’t disclose the buyout.
What's the reason for the early buyout? What's your end goal?
Sr. Member
Oct 16, 2008
546 posts
43 upvotes
Vancouver
Cookimonster wrote: So its ford credit who is the owner of the car.
Online account doesn’t show the buyout or any information relate to that.
I called ford credit and basically they told me they don’t have any information on the lease. All they do is collect payment from me… which is stupid slilly. They are the leaseholder and they don’t or wont disclose that is beyond my logic.
They said all information relate to lease is with the dealer that i bought and i can only get it from them.
So no i cant go around dealers to get that info cause what i was told is that original dealer would be reluctant to give it to another ford dealer.

But here is the kicker. I got the buyout cost from another dealer somehow and he gave me a actual print out of buyout and it was off by 7k. After that i did another calculation with my sister that came to similar number.
Did you go with in house financing when you leased the vehicle or Ford credit?
Newbie
Jun 21, 2020
89 posts
57 upvotes
Toronto
Kayne wrote: Did you go with in house financing when you leased the vehicle or Ford credit?
Ford credit. I have ford credit online account.
Deal Addict
Oct 1, 2015
4100 posts
6124 upvotes
Barrie, ON
Give Booblehead the numbers and let him do some math. We'll have an answer in about 15 seconds.
Newbie
Jun 21, 2020
89 posts
57 upvotes
Toronto
booblehead wrote: MSRP of the vehicle - $50,000.
$2,500 discount
All fees paid on "Due on delivery"

48 mo. term
2.98%
43% residual as per lessor = $21,500 as the buyout
$2,000 down


Monthly calculated payment = car's deprec portion $500.00 (*) + interest portion $83.19 = $583.19 + taxes

Total agreed price of car $47,500 - $2,000 down = $45,500

Month 1 - ($500.00) Balance $45,000

Month 12 - ($500.00) Balance $39,500

Month 48 - ($500.00) Balance $21,500 <<

Reconciliation: 48 months x $500.00 = $24,00 payment to-date.
Total agreed price $47,500 - $2,000 down - $24,000 payment made = $21,500 residual price


(*) msrp - discount + fees = total agreed price . Then Total agreed price $ - down $ - residual $) / 48 months = the above calculated amount
Hey booblhead,
Do you think you can run that spreadsheet for my car?
I don’t want to put it up here for now.
Let me just see where this goes and i’ll shame that damn dealer cause i know for a fact some rfd member bought cars there.
Deal Guru
Sep 1, 2004
12887 posts
13083 upvotes
Your sister and Bobblehead and do all the math they want. If it's only the dealer that can quote you an early buyout amount, what else can you do? Hire a lawyer?

I assume you have done this?

https://www.ford.ca/finance/customer-support/lease-faqs
Can I end my lease early?
You may terminate your lease early by following the instructions contained in the "Voluntary Early Termination" section of your Lease Agreement located in Account Manager. If you require additional assistance, please contact us.
Newbie
Jun 21, 2020
89 posts
57 upvotes
Toronto
Xtrema wrote: Your sister and Bobblehead and do all the math they want. If it's only the dealer that can quote you an early buyout amount, what else can you do? Hire a lawyer?

I assume you have done this?

https://www.ford.ca/finance/customer-support/lease-faqs
Well, at this point I don’t give a ass about the money. Basically they are trying to commit fraudulent and if they tried to do this to me, how many more people got screwed this way? I don’t need a lawyer cause if what i know is indeed a fact, all i care at that point is to make that dealer suffer with money and reputation.
If you screw with me, i screw with you more..
Maybe then the owner can hire a better manager.
Last edited by Cookimonster on Aug 27th, 2021 6:34 pm, edited 1 time in total.
Deal Expert
User avatar
Jul 30, 2007
33234 posts
21163 upvotes
Toronto
Op just wants to see if my calculation is in line with his sister’s figure. If it’s totally different, then we know something is wrong with the methodology to calculate.
Deal Expert
Mar 23, 2004
35606 posts
18999 upvotes
Cookimonster wrote: Hi guys, so I like to know if this a normal practice that dealer does or that i’m missing something.
So i have a lease that i want to buyout mid way.
Can dealer markup the buyout?
Not talking about fees.
No. This is a contract when you start the lease. Changing it would be breach of contract. You can sue them to perform according to contract and even for additional damages for dealing with these backdoor shenanigans.
Deal Expert
Mar 23, 2004
35606 posts
18999 upvotes
booblehead wrote: really ? they are the one taking your $ from your bank account every month. LOL.

If that's that case, maybe the buyout is $0 then since they have no information of your account. Just saying as this sounds so stupid of them.
Haha yeah just stop paying the payments when the lease ends and then when they call or send a letter about the residual/buyout, just tell them you don't know what they're talking about and say the dealer took it. Tell them when you called earlier they told you they didn't know anything about it so yeah, talk to the dealer. In meantime just keep driving around the car and keep it garaged so they can't repo it.

Take them for a ride a while, just like they're trying to do to you.
Newbie
Jun 21, 2020
89 posts
57 upvotes
Toronto
ES_Revenge wrote: No. This is a contract when you start the lease. Changing it would be breach of contract. You can sue them to perform according to contract and even for additional damages for dealing with these backdoor shenanigans.
Like i mentioned early reply, i told them about the lease contract and the sales dealer told me, it’s irrelevant and not accurate?? So where the f do i get an accurate contract???? Heaven?
So whatever contents in lease contract is crap and worth nothing? You know the saddest thing of all this is that I think most of salespeople know about some of shaddy and illegal shit going on with upper management but never bother to say anything about it.
Deal Expert
User avatar
Jul 30, 2007
33234 posts
21163 upvotes
Toronto
I have replied to op with an amortization schedule.

I suspect one dealer was quoting the interim term buyout with taxes included and the other dealer was without.

13% taxes of the interim buyout amount is a big number

Take a look and see if you can recall those numbers as quoted by dealers

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