2. try to avoid putting a downpayment on a lease. Because if the car is totaled, the downpayment will be lost.
I am unsure how things work in Canada so please verify before relying on this, however, this is not actually inherently true. The reason most people believe this to be true is because in practice the majority of customers are not in an equitable position in their lease (especially prior to COVID) so when they totaled their leases and the insurance company assigned a value, it typically was at or below the lease payoff amount. If its equal, there is no equity, no one "gains". If its below, most leases included GAP (not all, Mazda, Toyota and Lexus actually are one of the few that do not include GAP for free on leases) so the GAP insurance covers the shortage. However, in rarer instances if the lessees car is actually worth more than the lease payoff at time of total, the insurance company will pay the difference. We see this scenario more often because our client pool is typically getting very discounted deals through us and therefore have lower payoffs on their leases, one of my rep's got a new Grand Cherokee Limited for his wife last year and she totaled it about 6 months after, their payoff was lower than market value so they actually got a check back from insurance for about $2,000, despite it being a lease. With that said, the advice is still sound generally speaking (especially if you are leasing a PHEV/EV or any other greatly depreciating vehicle that will most likely not be equitable).
If you are leasing a BMW M product for example, those can be massively equitable and will likely yield a hefty check back in the event of a total loss. We bought a 22 X5M off lease from a customer a couple of months ago, we paid them $18,000 in equity back for their lease.
By your own admission, not everyone has 30k sitting in the bank or a car w/that equivalent trade-in value!
Yeah I think this debate gets a bit muddied because your situation is not consistent with the average scenario, most people don't have the choice to choose to either put $30k down or save it on a lease - also you specifically set the circumstance as you doing a 3yr/3yr trade cycle with financing so responses were based on this specifically unique scenario.
I forgot to ask. Can you explain what you mean by some brand have more restricted lease ? I am not familiar with the difference in flexibility some brand offer over the others.
This again may be US only, so confirm with Canadian banks, but in the US during COVID most manufacturers started restricting their leases. For example, in 2020 with my BMW M340i I was leasing I traded it into my Mazda dealership and got a Mazda3HB Turbo, they had zero issue buying the lease on trade. Shortly after, BMW set a restriction that ONLY a BMW dealership or the lessee can buy their car, that means they cannot trade their BMW lease in with a Mazda or any other brand dealer, or sell to a company like Carvana/Carmax.
Our company specializes in bypassing these restrictions and are one of the only services that allows you to easily sell a restricted lease like this.
The reason I say Audi and Volvo are badly restricted is because they take it up one notch, we can technically buy Audi still but they instead make 3rd party (non Audi dealers) buyers pay an insane retail based price to buy anyones lease from them, and if an Audi dealer DOES buy the lease they also impose a massive "segment fee" of $400-$800 to the Audi dealer to buy the lease. Their goal was to make sure the bank was getting their cut on the cars off lease and making it prohibitively expensive to other parties so they could get their leases back and capitalize on selling them at auction themselves. Audi is no longer an equitable brand as their values do not hold up nearly as well as BMW, so I am personally cautious of recommending anyone jump into an Audi lease for this reason (if they are ever considering an early exit at least) and recommend BMW since they are more likely to have lease equity.
Volvo gets EVEN WORSE because their rule is ONLY the originating Volvo dealer can buy your lease, not just restricting to Volvo dealers as a whole, but if you leased your Volvo in NY and moved to Cali, then wanted to try to get out of your lease early, the Volvo dealers in Cali can't help, you need to call up your dealer in NY. It's insane and I always caution clients of the Volvo lease commitment before jumping into one.
Lexus is great because they are open to all parties, if you want to sell your Lexus lease to a Lexus dealer, a BMW dealer or Carvana, no worries Lexus will let you be free to do with your lease as you please.
Hi there, that's us! Equityhackr was a program we co-developed with Victoria and Michael (owners of Leasehackr) back in December of 2021 and have been their exclusive partner since. In the very beginning, I was the one personally managing, appraising and quoting every single car that was submitted. Now, we still do manual quoting on every single vehicle submitted, but I've trained and promoted my Acquisitions Director, Alberto, to now manage the program.
