Automotive

Lease Question - Dealer offer new car for remainder of leasing period

  • Last Updated:
  • Jun 8th, 2020 11:22 am
[OP]
Newbie
May 6, 2020
10 posts
1 upvote

Lease Question - Dealer offer new car for remainder of leasing period

Hi,

I've a 2017 Mazda CX5 GT (no turbo) leased for 48 months at roughly 620 monthly + tax (with the hassle-free walk away appearance insurance when returning leased car + extended warranty).
I leased the car brand new and the lease maturity date is in Nov 2021 (around 15 months left).

I received a call from the dealership yesterday talking about no payment for 2 months, he said if you're interested come over to the dealership and we can talked about it.

I went into the dealership the next day and talked to the manager and he basically offers to take my 2017 cx5 away and lease a new 2020 Mazda CX5 GT w/turbo (599 monthly tax included) with the same lease maturity date of Nov 2021?

I asked about the walk away appearance package/insurance and he said it's all included and I basically also get to have 2 months of free of charge from Mazda, so rather than paying for 620+tax monthly, I basically need to pay the 30 dollars licensing and I get to have a lower monthly payment (599+tax), brand new 2020 turbocharged CX5.

This deal seems to be too good to be true, and I've never heard of something like this before. Has anyone heard of something like this before?



UPDATE June 05: Yea so basically I won't be getting the deal since my application got declined. The manager essentially said due to COVID19, a lot of banks has tighten up their restrictions where my credit might have work before the whole COVID 19 situation but now I can't.

UPDATE 2 June 05: Thank you to everyone who responded. My application didn't go through, and oh well, that's too bad then. Have a nice day yall.
Last edited by moneycat239 on Jun 5th, 2020 6:37 pm, edited 3 times in total.
31 replies
Sr. Member
Feb 17, 2015
553 posts
661 upvotes
Canada
Go for it but make sure everything he said put it in writing and have it signed by him. Also, check the total amount of the vehicle on the agreement just in case you want to buy it later. If you are not planning on keeping the car after 15 months and lease again then dont bother.

I believe that the 33 months youve paid for $620 (around $20K), plus the amount when they sell your vehicle will give them more profit, thats why they do this kind of deal.
moneycat239 wrote: Hi,

I've a 2017 Mazda CX5 GT (no turbo) leased for 48 months at roughly 620 monthly + tax (with the hassle-free walk away appearance insurance when returning leased car + extended warranty).
I leased the car brand new and the lease maturity date is in Nov 2021 (around 15 months left).

I received a call from the dealership yesterday talking about no payment for 2 months, he said if you're interested come over to the dealership and we can talked about it.

I went into the dealership the next day and talked to the manager and he basically offers to take my 2017 cx5 away and lease a new 2020 Mazda CX5 GT w/turbo (599 monthly tax included) with the same lease maturity date of Nov 2021?

I asked about the walk away appearance package/insurance and he said it's all included and I basically also get to have 2 months of free of charge from Mazda, so rather than paying for 620+tax monthly, I basically need to pay the 30 dollars licensing and I get to have a lower monthly payment (599+tax), brand new 2020 turbocharged CX5.

This deal seems to be too good to be true, and I've never heard of something like this before. Has anyone heard of something like this before?
Deal Fanatic
Apr 16, 2007
7649 posts
2865 upvotes
Financial District B…
Why on earth would you even buy an ext warranty on a leased car?
There's some of the cost difference when they are trying to flip you into a new lease (plus possibility of lower lease rate)
(Your original lease without the ext warranty would have probably been around $550-$570 approx)

What would the new 2020 Mazda be if you were to lease it for 2 years by itself? Perform that calc and compare to what you were offered
----------------------------Licensed Credit Bureau member, S1, FI Automotive, CCP forums most banned = x 13 and counting, guess who that is?... stomped to the curb once again
Newbie
User avatar
Oct 29, 2012
89 posts
41 upvotes
Oakville Honda
moneycat239 wrote:
I went into the dealership the next day and talked to the manager and he basically offers to take my 2017 cx5 away and lease a new 2020 Mazda CX5 GT w/turbo (599 monthly tax included) with the same lease maturity date of Nov 2021?
I've been in the industry for over 11 years and have not heard of that. I believe something has been miscommunicated and although the deal may be correct, the lease-end date would be reset and would end June 2024 (assuming a 48 month lease). The shortest lease for a Honda is 24 months and I believe that goes for Mazda too. Let us know!
Newbie
Mar 7, 2011
42 posts
32 upvotes
Ontario
Not sure about the maturity date. But such an offer is common in the industry. From a financial perspective, it's usually so the dealer can make a quick profit and not a good idea for you.

Dealers usually do this because you in the lease, you pay for a set annual km allowance and you're way under it. For example, your lease may give you 20k kilometers a year (1667/month). If that's the case, over the 33 months so far you've paid for 55011 km but only driven 35000 km. Such an offer usually means you forgo the km's you paid for but didn't used. Less usage also means the actual value of the car is higher than what was signed for ($$$ if you sell).

Depending on the circumstances, people usually just end up using their car on a long road-trip to use up the kilometres, or buy the car out and sell it privately after the lease is up (because again, car is worth more with the lower usage). THAT SAID, it works out for those who don't want any hassle and are ok with the loss because the monthly payments are reduced moving forward. Such an offer also appeals for someone who wants the latest and greatest model
Member
Feb 26, 2008
334 posts
84 upvotes
Montreal
The new lease maturity date can't be in Nov 2021. They're probably getting you into a new 4 or 5 years lease.
Deal Addict
User avatar
Sep 3, 2006
4370 posts
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krusty50 wrote: The new lease maturity date can't be in Nov 2021. They're probably getting you into a new 4 or 5 years lease.
Why can't it be in November 2021?
Deal Addict
Jan 15, 2017
3213 posts
2579 upvotes
Right now Mazda's website is showing the CX5 GT Turbo available with no negotiating for $535 + tax for 36 months lease. 48 months is $502 + tax. Doesn't seem like an exceptionally great deal to me, even if it is until Nov '21.

Yes, OP gets a new vehicle, but with only 35,000 km, I doubt if he needs a new vehicle right now. OP, how much money do you need to bring to the table for this deal?
Member
Dec 27, 2006
407 posts
194 upvotes
Canada
jcon wrote: Why can't it be in November 2021?
It's very rare to see a 15 month lease
Deal Addict
User avatar
Sep 3, 2006
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mario-rock wrote: It's very rare to see a 15 month lease
Sure, but they can do whatever they want. It's not a limitation if the leasing company wants to do it.
Deal Addict
Sep 8, 2017
3443 posts
3525 upvotes
GTA
Were you ever planning to buy out the 2017? You lose all the equity you've paid into it with this deal. Or maybe you're ok with always leasing.

The dealer just sees you and your car as good business. You lease another new car, and they add your low-milage lease return to their used car inventory. It's win-win for them.
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Oct 29, 2012
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Oakville Honda
derass wrote: Were you ever planning to buy out the 2017? You lose all the equity you've paid into it with this deal. Or maybe you're ok with always leasing.

The dealer just sees you and your car as good business. You lease another new car, and they add your low-milage lease return to their used car inventory. It's win-win for them.
There are multiple factors that go into whether or not there will be equity or negative equity in a deal. Dealerships are always looking for more inventory as the used vehicle market is in high-demand right now. I would say that vehicle valuations are higher than they've ever been because of this and the customer can capitalize on this and combine it with incentives that dealerships wouldn't normally offer because of what's going on (covid).

If your vehicle has low mileage and you don't care too much about vehicles, I would say take it to the end of your term. However, if you like the styling of the new vehicle or the new safety features and the deal makes sense, then do it!

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