So you want to buy your leased car?
My wife likes to have a new car every 4 years so she's been leasing for the past 3 vehicles. Her lease was up this month but the buyout price for her 2003 Toyota Camry, $9952, is much less than the Kelly Blue Book value, $11,500; so she decided to buy the car.
I, on the other hand, only buy, never lease. Unless you have some type of investment that you can put your money into that pays more than lease interest and other charges, it's always better to buy to own. BTW, I drive a 1989 Honda Civic with 179,000 miles on it. I get 34 miles to the gallon and I spend about $1,000 a year for maintenance. Rather than impress others with a snazzy pimpmobile, I prefer to impress myself with the money I save by not buying a new car for the past 18 years.
But back to my wife. On Saturday she went back to the dealer that leased her vehicle. When she told them that she wanted to buy the car, they rolled out the finance papers. No, she wanted to pay cash - no financing.
"Well, we have to appraise the car first," they said. She asked why that was necessary, she wanted to buy the car outright. "That's our procedure," she was told. She informed the dealer that she wasn't going to pay for any appraisal. "No worry, there's no charge."
After waiting 25 minutes for this "appraisal" the financing document is finally brought out and the buyout price for cash looked like this:
Toyota Buyout: $10,815.54
Document Preparation: 195.00
Sales Tax: 770.74
Cash needed: $11,781.28
My wife filled out a worksheet before she went to the dealership:
Toyota buyout: $9,952 residual value + $188.54 remainder of Jan payment = $10,140.54
Sales Tax: $709.84
Grand Total: $10,850.38 - not counting any fees the dealership may charge for the transaction.
Now my wife thought that the $195.00 was a bit steep just for preparing a document and when she protested asking why their number was so much higher they finally let us look at their worksheet. They had added $675.00 for "Inventory Fee". Now it became clear what the "appraisal" was all about. They wanted $675 for putting the car into inventory and then selling it back to my wife. We kindly told them that we didn't want to pay an inventory fee and reminded them that we didn't want the car appraised if it was going to cost us anything. "That's our Policy!" they repeated. The worst part was that the sales tax wound up $61 higher because of the extra fees. She left.
Total time spent at dealership, filling out documents, waiting for appraisal, arguing with dealer: 57 minutes.
This morning my wife called Toyota directly, got a faxed buyout document, and sent a check for $10,850.38 (no document prep fee, no inventory fee, no extra taxes on the new bloated amount).
Total time spent on phone, filling out faxed documents, mailing out check: 9 minutes,
She saved $931 because of the greed of the dealership. Had they been merely content to charge an already outrageous document prep fee, my wife probably would have gone along with it. And they would have made $195 for only spending 9 minutes with Toyota doing exactly the same thing my wife did.
Update 08 Sep 2008:
My old car mentioned above finally died. For the first time in my life I buy a new car.
