My Car Is Worth Nothing After My Lease is Up
July 31st, 2008
Reader Question
I was leasing a new Ford Mustang for 2 years, but now they say the price of the Mustang is soo low that I lost value, or something like that….I think he said its residual value was lower than market value? Help…I think I am getting screwed on this car lease “deal”.
Anne,
Houston, TX
Example 1 Residual Value: What the vehicle will be worth at the end of the lease. It may or may not match true estimates of the used car value at that point. Residuals are determined by lenders. You are unlikely to be able to negotiate residual value, but you can comparison shop for the highest available.
Example 2 Residual Value: The value of the means of transportation at the finish of the lease. Now, let us work out a sample rent imbursement based on a vehicle with an MSRP (sticky label price) worth of $25,000 and a currency factor of 0.0034 (this is usually quoted as 3.4%). So this is how it will look to you
The scheduled lease is over three years and the predictable outstanding proportion is fifty-five.
The first step is to compute the left over value of the car. You reproduce the MSRP by the outstanding proportion:
That is $20,000 X .55 = $11,000.
The vehicle will be significance $13,750 at the closing stages of the lease, so you will be by means of:
That is $20,000 – $11,000 = $9,000
This quantity of $9,000 will be use over a 36 month lease epoch giving us aMonthly payment of:
That is $9,000 / 36 = $250.
best of luck to you, you really can not negociate the lease AFTER the lease is up…..but you might be able to find a sucker to buy the vehicle from you for more than the residual price…..maybe post it on Craigslist.com?
Entry Filed under: Car lease financing