Automotive

Would you pick Leasebusters or buy used car?

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  • May 18th, 2020 11:26 am
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[OP]
Newbie
Oct 1, 2019
75 posts
22 upvotes

Would you pick Leasebusters or buy used car?

Trying to decide if I want to take on a lease with leasebusters in the range of 4-12 months with the option to buy at the end versus buying a used car for under 8k. I'm looking to get something sooner than later so I'm aware the market for used cars and new might change if the economy gets worse or takes years to recover.

leasebusters.com there are enough cars at under $300/month in lease payments and some listings that include wear and tear insurance. At least with end of the lease, could always jump into another one if don't like the car and or unsure if I want to buy.

My main goals are to get a set of wheels and put away as much money in savings for investing and in buying a house.

I think the lease option looks ideal for getting to drive a fairly new car, buying time on a future decision and having peace of mind in not having to dish out money in repairs in having a used car.
27 replies
Deal Expert
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Apr 21, 2004
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Buy a relatively reliable used car that's easy / cheap to repair (parts and labor) that you won't hate driving.

Have mechanic inspect it to play safe.

Leasebusters makes sense the shorter the remaining term is. And I would only lease if I had the intention of buying it.

To be honest, paying $10k more or around $20k for a car that will last 10 or more years with little running cost including fuel will not change anyone's chances of buying a property in any big to medium sized-city.
Deal Expert
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Jul 30, 2007
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Toronto
Many factors in deciding which is the better route.

Speaking of $ perspectives point of view ? If you buy used from dealer, you wil be paying a hefty markup by the dealer, partly you may be getting an extended warranty of sort and perhaps, wearable items would have been replaced during their reconditioning process.

Taking over a lease can also work in some cases as current owner may be willing to give cash credit to entice the offering. If car totally checks out clean , you have to option to buy it out (with added fees and cost of safety) such that you end up not paying the dealer high markup.

Bottom line is there is no clear cut winner on both situations, you have to evaluate on a case by case
Last edited by booblehead on May 17th, 2020 4:22 pm, edited 1 time in total.
[OP]
Newbie
Oct 1, 2019
75 posts
22 upvotes
Taking some examples. I see a few VW holds that have lease warranty and car buyout of around $10k and are 2017 models with 20k to 50k kms and other option is 2013 car with 100+kms for around $7-8k at a dealership.

I see other cars that are 2018 models, low kms for similar lease and buyout values. I don't envision to drive up the kms so wondering if licking a lease with a decent buyout value would be worth the extra expense.
[OP]
Newbie
Oct 1, 2019
75 posts
22 upvotes
If the lease ends in 12 months and the market for cars looks bad, think I'd be able to negotiate a lower buyout price?
Deal Addict
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Mar 8, 2006
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Richmond
I don't know if it's just me, but Lease Busters has to be the worst website I've ever used. Their search function is useless and it seems to mix in really old listings with new ones.

I've tried looking for deals there, but it's impossible to use
Deal Addict
Jan 15, 2017
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slotsdisco wrote: If the lease ends in 12 months and the market for cars looks bad, think I'd be able to negotiate a lower buyout price?
No. Buyout price is set by the leasing arm and has already been agreed to in the contract. When you take over a lease, you also agree to this buyout amount.
[OP]
Newbie
Oct 1, 2019
75 posts
22 upvotes
M@rk wrote: I don't know if it's just me, but Lease Busters has to be the worst website I've ever used. Their search function is useless and it seems to mix in really old listings with new ones.

I've tried looking for deals there, but it's impossible to use
Their mobile site is useless but when you use their filters I have no problems. Just sort by payment and goes lowest to highest. Site is ugly but it works for me.
[OP]
Newbie
Oct 1, 2019
75 posts
22 upvotes
skeet50 wrote: No. Buyout price is set by the leasing arm and has already been agreed to in the contract. When you take over a lease, you also agree to this buyout amount.
But if I have the choice of not buying the car and it becomes used inventory to them, I'd guess they want more cars leaving than going back.
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Apr 21, 2004
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I have occasionally checked leasebusters for Toyota, Lexus, Acura and Honda hybrids and shortest typically is 20 months. There was a 2018 RAV4H with 10 months and it disappeared after a few weeks as it was available to be turned over in May. It was much cheaper to take over the lease and buy it out. Total with HST was around $31k. So someone could have taken over and then had the intention to buy it out and flip it but there's risk now that the economy is in a recession.

I think pre-covid, dealerships were buying these hybrids to flip or maybe there's a big demand for people who want to lease and buy it out as soon as possible as I rarely see terms below 20 months.

Risk with taking over is excess wear and tear and km but several have lease protector.

Maybe OP is thinking to flip. Not sure if there is enough demand for VW when it's time to buy it out and resell but yeah, at least OP can walk out of the lease easily.
[OP]
Newbie
Oct 1, 2019
75 posts
22 upvotes
No intentions to flip. Some of these deals to take over and buyout look good. That being ones with low kms and lease protection.

Think am leaning towards lease with buyout if it is a good car. Cost a bit more than buying a used car but gives me a manageable debt and a decent car at a good price on buyout and a bit less risk of having potential repair problems.
Deal Expert
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Jul 30, 2007
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If going to leasetakover route, you ought to look for some kinds of $ incentive, current owner to pay transfer fee, service records (if you want to be diligent), Carfax report and dealer inspection report (to ensure the car does not have any repair issue, esp. non warranty repair issues.
Deal Addict
Jan 15, 2017
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slotsdisco wrote: But if I have the choice of not buying the car and it becomes used inventory to them, I'd guess they want more cars leaving than going back.
The financing companies have a large and well-established network to quickly see returned leased vehicles. There will be no negotiating on the buyout price. I suggest that you carefully read the original lease contract/agreement of any lease that you are thinking of taking over and it will spell out all the fees that will be required at the lease end.
[OP]
Newbie
Oct 1, 2019
75 posts
22 upvotes
skeet50 wrote: The financing companies have a large and well-established network to quickly see returned leased vehicles. There will be no negotiating on the buyout price. I suggest that you carefully read the original lease contract/agreement of any lease that you are thinking of taking over and it will spell out all the fees that will be required at the lease end.
I'd simply have to not like the car or decide it isn't worth the value to buy out. I'd agree they won't budge on negotiating before the lease ends but I have to wonder if any of these auto companies want to have anymore inventory. I don't know if by rejecting the buyout if I'd get asked why or if a discount would exist to encourage a quick sale. I just think in the next 12 months, that new cars won't be selling at the rate manufacturers would like and I think that might apply to used cars.
Deal Addict
Mar 3, 2018
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GTA
slotsdisco wrote: I just think in the next 12 months, that new cars won't be selling at the rate manufacturers would like and I think that might apply to used cars.
The next 12 months will have less sales but also due to lack of supply. With most auto plants closed down current inventory will soon be running low. My thinking is prices are going to rise not fall as a result. Basically the old supply and demand relationship.
[OP]
Newbie
Oct 1, 2019
75 posts
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DaveTheDude wrote: The next 12 months will have less sales but also due to lack of supply. With most auto plants closed down current inventory will soon be running low. My thinking is prices are going to rise not fall as a result. Basically the old supply and demand relationship.
I have read that this will stop the imbalance of supply not letting prices bottom out and the same could be said of housing. That said, anybody selling anything whether new, lease or used cars, I think are going to struggle with so many unemployed people out there. It will probably take 1-2 years to get out of it so car inventories are slowing down now but how long does any dealership want to let a car sit there and get a year older? Just look at condos in Toronto, I'm assuming construction is slowing down and some projects are going to go bust, condo prices are already dropping, see here. The parallels condos and cars share in common is in the luxury segment and this seems to be true in past recessions. Luxury cars tend to have more deals to drive sales of new cars and people trying to sell used.

That supply demand relationship is heavily dependent on the economy itself. If the Canadian economy does retract by 3% to 6%, that is a significant number and it means a lot of people out there won't have any money for any car.
Sr. Member
May 20, 2017
805 posts
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ON
slotsdisco wrote: I'd simply have to not like the car or decide it isn't worth the value to buy out. I'd agree they won't budge on negotiating before the lease ends but I have to wonder if any of these auto companies want to have anymore inventory. I don't know if by rejecting the buyout if I'd get asked why or if a discount would exist to encourage a quick sale. I just think in the next 12 months, that new cars won't be selling at the rate manufacturers would like and I think that might apply to used cars.
Based on previous experience, buyout prices are almost non-negotiable. But who knows, you might get lucky, or the dealership might get desperate. But you should be prepared that very likely that price is fixed when you do it.
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Jul 30, 2007
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dealer does not own the car. they could care less if you drop off the keys and walk away.
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Oct 5, 2009
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slotsdisco wrote: I'd simply have to not like the car or decide it isn't worth the value to buy out. I'd agree they won't budge on negotiating before the lease ends but I have to wonder if any of these auto companies want to have anymore inventory. I don't know if by rejecting the buyout if I'd get asked why or if a discount would exist to encourage a quick sale. I just think in the next 12 months, that new cars won't be selling at the rate manufacturers would like and I think that might apply to used cars.
How many times do you need to hear NO? DO a search. This is not how it works. It’s contractual. The dealer who you return the car to has nothing to do with it. If you don’t want the car the dealer usually has first choice to buy from leasing company at the set price. If they don’t want it it goes into an auction pool (dealers used car deals). It won’t sit on their inventory it will be sold at auction for whatever price the auction dictates. Leasing companies do not have the process or infrastructure to negotiate individual prices with former owners on buyouts.

If you want the car but are not willing to pay the contracted residual price then you either need to get a dealer license and go bid on it at auction or find out who wins the auction and try to go negotiate with them.

There will not be any negotiation when your lease comes up period. Either buy for the residual or don’t .
[OP]
Newbie
Oct 1, 2019
75 posts
22 upvotes
Elec2016 wrote: Based on previous experience, buyout prices are almost non-negotiable. But who knows, you might get lucky, or the dealership might get desperate. But you should be prepared that very likely that price is fixed when you do it.
I'd assume this is non negotiable until the point in which I'd say I'm walking away when it would come to my decision to do that after the lease is over. Of course I'd only be doing this if I didn't like the car or if the market changes and becomes favourable for buyers. There isn't a lot discussed out there about negotiating but there are some articles that explain the process that it is possible, just very unlikely.

https://business.financialpost.com/pmn/ ... leased-car

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