The first thing to be aware of, if you are interested in buying your leased vehicle at the end of the lease term, is the residual value of the vehicle. Also called lease-end values or the lease-end purchase price, the residual value of your leased vehicle is simply the wholesale value of the car at the end of the lease term. This price is set by the company financing the car lease and is an expert guess as to what the car will be worth at the end of the lease term. It is typically based on expected depreciation, historical demand for that model, and the effect of expected mileage on the car’s value.
Typically, the cost of your auto lease buyout is based on the residual value and an additional purchase-option fee. If you are interested in purchasing your leased vehicle, the best tactic to take is to wait for the leasing company to call you toward the end of the lease and broach the subject of a lease buyout. From this position, you have a little negotiating power. This is when you can ask about purchase incentives. For example, you can ask if they would lower the purchase price. You could also ask if they would remove or lower the purchase-option fee. Asking if they will offer a discount financing deal on the lease-buyout loan is another question you can ask.
Prior to hearing from the leasing company, do some research on the current value of your vehicle and shop around for financing options for a lease-buyout loan. This will give you a little more negotiating power to work with when the leasing company does call about your intentions. With leasing companies typically open to selling the leased vehicle upon the end of the term, you are likely to find yourself with a good chance at a favorable deal if you are prepared with current vehicle data, are knowledgeable of your lease’s terms, and are aware of the market’s current financing rate.
For direction and assistance navigating your auto refinance or lease buyout and getting the best financing rates possible, call iLendingDIRECT at (866) 683-5505 or Apply Now.
One of the benefits of an executive, leadership, or sales position in some corporations is the opportunity to drive a company car. But what constitutes a good company car, and what are the most popular types of company cars, you might ask? Comfort, reliability, and fuel economy top the list of the most sought after features companies look for when choosing which make and model they will purchase or lease for their employees to use as their company car, and German makes and models are currently at the top of list of preferred company cars. Here are the top five picks from the “hot list” of company car choices, according to whatcar.com:
BMW's 3 Series is currently the most popular choice when it comes to company cars, and has been the recognized leader in its class for years, with other manufacturers consistently raising their game to try and compete. Offering its drivers great handling, an enjoyable driving experience, interior comfort and elegant refinement, the fuel-efficient engines also combine stellar performance with competitive levels of emissions, making the BMW 3 Series irresistible to company car buyers.
Coming in second is the Audi A3, a phenomenal purchase for both company car buyers and private owners, with diesel engines ranging from 1.6 to 2.0 liters. Whatcar.com recommends company car buyers go for the 1.6-liter engine.
Volkswagen Golf comes in at number three, with something for everybody. The 2.0 TDI 184 GTD is the most searched for Golf model, and offers a dynamic combination of fuel economy, performance, and practicality. Carbuyer.co.uk calls this hatchback “impressively quick” (reaching 0-60mph in just 7.5 seconds) and good to drive.
Should you keep your car loan the way it is, or refinance your vehicle? There are several scenarios that make it worthwhile to consider refinancing a car loan. If you are wondering if or when you should refinance your auto loan, here are a few situations where it might be warranted.
Divorce. If you are divorcing and separating assets, you will want to make sure that the only name on the auto loan is that of the person who is actually in possession of the car. If your name is on as co-owner of a vehicle you no longer have access to after the divorce, you are still liable for payments on that loan if the other person defaults. Also, should the car become damaged or even totaled in an accident, anyone whose name is still on the title is responsible to pay any deductibles that apply.
Change in financial situation. If you experience a traumatic life event such as a job loss or unexpected medical expenses, you could significantly lower your monthly car loan payments by refinancing your auto loan. By extending the term of the loan, your monthly payments will be smaller and more affordable. You may also be able to secure a lower interest rate, thereby saving even more every month. If your financial situation improves, you can always make more than the minimum monthly loan payment and pay the balance off sooner, saving even more interest.
Improvement in your credit score. Since your credit score has a great deal to do with the interest rate you receive on your auto loan, it may be a good idea to look into refinancing if your credit score improves significantly. A new loan (refinance) pays off the balance of your current auto loan, and can lower your payments and garner you a better interest rate. Continuing to make the new, lower payments on time will only boost your credit score even more.
Refinancing your Auto Loan is typically easier than buying a new/used vehicle. There are several reasons for refinancing your car loan, however, the primary reason is to lower your monthly payments. This can be done by either securing a lower interest rate, adjusting the term of the loan, and ideally both. Another reason for refinancing may be to remove or add a co-signer to the loan.
Many people fear the extension of a loan, but in fact it is a blessing to be able to do so. With the lowest payment possible, you ensure that the least amount of interest per payment goes to the bank. With a simple interest loan, anything you pay over the minimum goes directly to the principal so you can pay down the actual balance of the loan specifically. So, you actually pay the loan off in a shorter amount of time. Example:
If your current loan is $400/mo and you have 36 months remaining and you refinance at 60 months but it gets your payments down to $200/mo – you can make that exact same $400 payment that you would be making in your old loan – BUT you would be making double payments, essentially paying the new loan off in 30 months saving you $2,400 in payments! AND you always have the security and comfort of the lower payment if you ever have a tight month or need the money elsewhere.