Nope. The buy out amount is based on the residual when the lease was signed in 2019. They had no idea that the trade-in value of used cars would be so inflated today.
Dealer charging for PCM/TCM updates?
- Thread starter TheBlackCat
- Start date
1
181962
Your comments on this subject seem self-contradictory.
@Odrapnew parroted back what you said and you replied with a "nope". Maybe that has something to do with how you define "buyout" but that seems to be a stretch. Anyway, most folks understand a "buyout" as either buying out and keeping the vehicle at the end of the lease or exercising the buyout right and flipping it in trade without ever taking possession.
Some clarification is in order.
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- 2019 CX-5 Signature
Weird... Let's say the residual was $15k when they wrote up the lease. The vehicle is worth $21k on the free market at the end of the lease. You're saying it would be a bad idea to buy it for $15k and would be better to just turn it in?
Just the opposite!. Buy it and sell it privately or to a dealer, with or without the purchase or lease of another new vehicle.Weird... Let's say the residual was $15k when they wrote up the lease. The vehicle is worth $21k on the free market at the end of the lease. You're saying it would be a bad idea to buy it for $15k and would be better to just turn it in?
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- 2019 CX-5 Signature
Yes, those seem to be the obvious logical options. I'm trying to see if "dunhillmc" knows something we don't.
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- CX5 GT
trading the lease into a new lease is a buyout too, its just a 3rd party buying the lease. A dealer in this case. I think this is what the reference was.
i.e Save the trouble of buying/paying the lease buyout price yourself, changing titles, sales taxes , etc. and since the market is inflated vs 2019 prices, you can use some of that inflated money amount (todays market price of the car vs residual set in 2019 which is way lower) as a downpayment on a new lease or finance.
i.e Save the trouble of buying/paying the lease buyout price yourself, changing titles, sales taxes , etc. and since the market is inflated vs 2019 prices, you can use some of that inflated money amount (todays market price of the car vs residual set in 2019 which is way lower) as a downpayment on a new lease or finance.
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- 2019 CX-5 Signature
If that's now an option, that's new, or not available everywhere. Our daughter was given two options. Return the vehicle and walk, or have them certify the vehicle and sell it back to her for ~$2k more than residual. As I stated above, she avoided them and got a loan through her CU.
I've never leased, but have been on car forums since day one. I've always been fascinated by the reasons some people lease and have learned quite a bit about them. My understanding is the only way a dealer can offer you more than residual for your old lease, is to have support from the leasing company. They do this with lease trade-ups, but they don't actually pay you, they just end the lease early to get you in a new one. It costs money to process the paperwork involved, which is probably why they're calling this a "certification" and charge a premium. If some aren't doing this, that would be awesome. Do you know of any?
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- CX5 GT
you are correct in normal times.
The only reason it happens today is because
market price of the car is way
higher than the residual (for leases prior 2020).
Because of the fast inflation in used car prices.
Same thing with real esstate homes. Everything is up market value 20-30% or more from 2020 and before. But if I recall some leasing companies stopped allowing 3rd party buyouts because too many people started selling their leases to carvana carfax etc. Mazda leases in the part were by Chase and they allowed anybody who
pays the buyout price to get the car. Dont know about Toyota Financial which now services the new leases from around 2020.
and yes, nobody pays you anything directly most people drop the diference amount as a downpayment on the new car lease or finance.
Example CX5 Buyout residual 18k (+whatever months are left) market value tradein that dealer gives 26k. you "get" 8k which they can use to lower the total cost of a new car either lease or even finance from the same dealer.
There may be states or car brands that dont allow it though.
Essentially one still pays the full price of the new car it just lowers the new monthly sometimes.
But lease to lease is endless cycle in which under normal markets the person leasing doesnt gain anything but pays a rent to drive the car.
Leasing used to be a way to drive more expensive car (some brands not all) for smaller monthly vs financing (Chase used to have almost 0% interest as well on end of year lease,etc.)
through a lease with high residual and manifacturer rebates, dealer discounts etc.
That is now thing of the past of course.
The only reason it happens today is because
market price of the car is way
higher than the residual (for leases prior 2020).
Because of the fast inflation in used car prices.
Same thing with real esstate homes. Everything is up market value 20-30% or more from 2020 and before. But if I recall some leasing companies stopped allowing 3rd party buyouts because too many people started selling their leases to carvana carfax etc. Mazda leases in the part were by Chase and they allowed anybody who
pays the buyout price to get the car. Dont know about Toyota Financial which now services the new leases from around 2020.
and yes, nobody pays you anything directly
most people drop the diference amount as a downpayment on the new car lease or finance.Example CX5 Buyout residual 18k (+whatever months are left) market value tradein that dealer gives 26k. you "get" 8k which they can use to lower the total cost of a new car either lease or even finance from the same dealer.
There may be states or car brands that dont allow it though.
Essentially one still pays the full price of the new car
it just lowers the new monthly sometimes.But lease to lease is endless cycle in which under normal markets the person leasing doesnt gain anything but pays a rent to drive the car.
Leasing used to be a way to drive more expensive car (some brands not all) for smaller monthly vs financing (Chase used to have almost 0% interest as well on end of year lease,etc.)
through a lease with high residual and manifacturer rebates, dealer discounts etc.
That is now thing of the past of course.
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- 2019 CX-5 Signature
This would make sense, but I haven't heard of a dealer taking their lease back and paying more than the residual. Maybe taking your Mazda to a Honda dealer, but that's essentially the same as selling to a place like CarMax. Manufacture's leasing companies are pretty strict with their policies.you are correct in normal times.
The only reason it happens today is because
market price of the car is way
higher than the residual (for leases prior 2020).
Because of the fast inflation in used car prices.
Same thing with real esstate homes. Everything is up market value 20-30% or more from 2020 and before. But if I recall some leasing companies stopped allowing 3rd party buyouts because too many people started selling their leases to carvana carfax etc. Mazda leases in the part were by Chase and they allowed anybody who
pays the buyout price to get the car. Dont know about Toyota Financial which now services the new leases from around 2020.
and yes, nobody pays you anything
But lease to lease is endless cycle in which under normal markets the person leasing doesnt gain anything but pays a rent to drive the car.
Leasing used to be a way to drive more expensive car for smaller monthly vs financing. through a lease with high residual and manifacturer rebates, dealer discounts etc.
That is now thing of the past.
When I was at the dealer buying my 2021, the salesman had the paperwork on his desk for a woman whom, per his request, was returning her lease early and they were giving her a $4,000 check
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- CX5 GT
here is the difference they are not taking it back but buying it out instead. even if they dont tell that they do exactly that. The lease is not returned in that case. The leased car is owned by the leasing company and the dealers are just interim parties in a lease or lease return case but to cash out the so called equity there is a purchase not lease return. Semantics
Because of the car market value today (if the dealer has to buy similar car on the market i.e. not from the person leasing) is much higher than the residual set in say 2019 there is a positive difference. Obviously they dont "give" the exact value for what they will sell to a new customer but you get the idea.
Same could be done if one buys the lease and then sells it immediately then one can get the money difference but may lose on the sales tax on top of the residual unless living in a state where the whole amount is paid already upfront on a lease (i.e Texas) or a state that forces you to go through a dealer (Florida comes to mind)
More scummy dealers may not even "give" anything as difference and try to cheat but often they do to get people to buy something new and lower the monthly. Most people look at monthly payments at the end not the true total cost.
And as mentioned this "positive difference" today is specific to this and last year inflated prices vs prices before the virus.
Never happened before as far as I know.
It will all dry out in few years when the new leases start to come to their end period and that would be it.
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- 2019 CX-5 Signature
And I'll bet that was about $2k less than its worth.
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- 2019 CX-5 Signature
Again, this seems logical, but neither my daughter nor the OP had this experience. I'm not saying it couldn't happen, it's just not something I've heard of happening. That's why I was asking for a specific example from someone who has gone through it.here is the difference they are not taking it back but buying it out instead. even if they dont tell that they do exactly that. The lease is not returned in that case. The leased car is owned by the leasing company and the dealers are just interim parties in a lease or lease return case but to cash out the so called equity there is a purchase not lease return. Semantics
...
I think the term 'buyout' is what's causing confusion.
Buyout could mean the dealer is buying out the remainder of a lease (remaining payments + residual) and getting you into a new vehicle, in which you could be losing out on a lot of cash.
I was referring to the leasee buying out the lease at the end based on the agreed residual and then trading (or selling) it at a higher value than the residual.
Buyout could mean the dealer is buying out the remainder of a lease (remaining payments + residual) and getting you into a new vehicle, in which you could be losing out on a lot of cash.
I was referring to the leasee buying out the lease at the end based on the agreed residual and then trading (or selling) it at a higher value than the residual.
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- 2019 CX-5 Touring FWD
That’s what we ended up doing - we bought out the car at lease-end (directly through the bank which held our lease), which was based on the agreed residual value ($18K for our 2019 CX-5). We might have gone the trade-in route instead, but our next vehicle won’t be available for another year-plus anyway due to supply shortages, and we still need our CX-5 in the interim, as it’s our main vehicle.
Hopefully, should the used car market stay relatively high like it is now, we’ll sell our 2019 CX-5 within the next year, pocketing perhaps $4-$7K, which is still far more then we anticipated when we leased the vehicle three years ago. We can then put some of that as a down on our next vehicle if we decide to.
And even if our CX-5 needs probably one more oil change & maybe rear brakes, that’s only a few hundred dollars out on our end - without giving $1-$3K to the dealership on an extended warranty.
All in all, we’re grateful to the feedback on this forum, which ended up saving us quite a bit of money.
Hopefully, should the used car market stay relatively high like it is now, we’ll sell our 2019 CX-5 within the next year, pocketing perhaps $4-$7K, which is still far more then we anticipated when we leased the vehicle three years ago. We can then put some of that as a down on our next vehicle if we decide to.
And even if our CX-5 needs probably one more oil change & maybe rear brakes, that’s only a few hundred dollars out on our end - without giving $1-$3K to the dealership on an extended warranty.
All in all, we’re grateful to the feedback on this forum, which ended up saving us quite a bit of money.
1
181962
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I don't have too much sympathy. Try reading the lease contract. If it says you can pay the residual value of $xx,xxx at the end of the lease to take ownership, then that's what you pay, plus tax and title. And if you're over the allocated mileage or have some damage that would incur additional charges if you turned it in, you don't pay those fees either if you buy the vehicle.
Area dealerships overcharging tens of thousands on car lease buyouts
With used car prices doubling this year, more car owners than ever at the end of leases have been buying them out instead of turning them in.
I don't have too much sympathy. Try reading the lease contract. If it says you can pay the residual value of $xx,xxx at the end of the lease to take ownership, then that's what you pay, plus tax and title. And if you're over the allocated mileage or have some damage that would incur additional charges if you turned it in, you don't pay those fees either if you buy the vehicle.
They are free as far as i know. Go to another dealer and do an oil change and ask for ALL software updates. I think the cx 5 has 8 devices that need software updates. Some maybe just for cell phones.
Jack Rabbit
Banned
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- 18 Mazda CX5 AW
For future reference, Is there a way for us to update the PCM/TCM without the dealership???
Purchased a cpo vehicle and took in for warranty work including transmission jerky and sometimes taking too long to shift into higher gears. They said it wasn't covered under warranty and that the dealership that sold the vehicle should have updated the software before selling it and that I could either drive back to that dealership(no guarantee of free fix) or pay $380 some dollars to have 3 system updates completed which should fix some of the problems.
Was in no mood to drive to the other dealer nor argue so just had them update the software.
I told them if the update doesn't fix the problems and car goes over warranty mileage/years , will Mazda still fix the problem and they said yes so we shall see.
What sucks is that I had purchased a few cars from this dealer over my lifetime.
As long as the software update fixes the problem will not be upset. But have to wonder if getting scammed.
Purchased a cpo vehicle and took in for warranty work including transmission jerky and sometimes taking too long to shift into higher gears. They said it wasn't covered under warranty and that the dealership that sold the vehicle should have updated the software before selling it and that I could either drive back to that dealership(no guarantee of free fix) or pay $380 some dollars to have 3 system updates completed which should fix some of the problems.
Was in no mood to drive to the other dealer nor argue so just had them update the software.
I told them if the update doesn't fix the problems and car goes over warranty mileage/years , will Mazda still fix the problem and they said yes so we shall see.
What sucks is that I had purchased a few cars from this dealer over my lifetime.
As long as the software update fixes the problem will not be upset. But have to wonder if getting scammed.
If it's a CPO vehicle then it absolutely is under warranty from Mazda and they should have performed the updates for free. If not a CPO then 5 years 60k miles is the USA for powertrain which includes computer modules that drive it. Call and tell them it has a factory Mazda warranty and ask for your money back. If they balk then contact the general manager. If they balk then do a CC chargeback
Jack Rabbit
Banned
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- 18 Mazda CX5 AW
Yeah. I read the warranty book and the cpo warranty. Interestingly, firmware and software updates are not listed as covered items nor are they listed as excluded items. Should be interesting to see their answer.
