Should I buy out our leased car? | GTAMotorcycle.com

Should I buy out our leased car?

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stangn99

Well-known member
Have a 4 year lease on a 2018 VW GTI Autobahn with 80,000km allowance.

There's about 8 months left on the lease and we've got about 53xxxkm on it. The residual is a little under $20,000.
The car has been well kept, fed premium fuel, and aside from a truck/van reversing into it and leaving marks on the front bumper, it's clean.

We're having a tough time deciding if we should buy it out, or return it and get something cheaper (used, really cheap).

Reason why we want to keep it
  • genuinely love the car, the power, handling, options and aesthetics
  • its small enough to fit in our parking pad in front of the garage, allowing me to keep the bike inside the garage.
  • we're going to have about 20,000km in excess mileage
Reasons why we want to give it back
  • I don't like the fact that someone reversed into - never bothered to go through insurance or get it checked (hit+run), and don't like seeing the scratches on the front bumper (I have lease damage protection on the car up to $10,000, so never bothered)
  • Since moving closer to downtown core we just don't drive much - we walk to the grocery store, beer store, etc.
    • The car, for the past 5,000km or so, has been on 90% short distance drives (5km or less).
  • The A/C is trash - dealer fixed it twice under warranty and it's starting to crap out again slowly.
  • Never got it rust proofed because we never expected to keep it.

I'm looking at used base model Golfs, smaller Kia's, and other small hatchbacks, and it seems like used prices are quite high (covid related?).
Does it make sense financially to buy out the GTI and keep it? or buy it out and sell it privately to get something used/cheap considering we do about 5-7,000km annually?

This is the first time we've leased a car, so I don't really know what buying out the car entails. I'm assuming you just pay taxes on top of residual price?
 
While I have no opinion on whether you buy it out or trade it in.

Even with the issues at least you know what they are and what to expect, with a used car you may end up with new surprises?
I would suggest look to finance a new car , could actually work out cheaper (mth to mth) than a used one.. and you have a warranty.
 
At 5000 km a year, does car share/rental work for you? It's probably cheaper. What alternative used cars can you pick up for 20K? Alternatively, what is the cheapest acceptable used car you can get? Getting a pristine used car is difficult, I wouldn't worry about the scratches you have. You live close to the core. Anything is going to get damaged soon enough as so many people drive by braille.

I wouldn't worry about rustproofing. Rust rarely kills VW's.

A/C is annoying. Isn't this car mostly for winter use?

I don't like short drive cycles but those will not be good for any car (other than EV).


What about @PrivatePilot 's ioniq? Similar size, no gas, warm when you get in, happy with short trips, etc, etc.
 
I have a 2019 GTI Autobahn, although financed. Given your yearly mileage and use for the car (short 5k runs), it maybe a bit overkill to fork $20k for it. If it is a DSG, You will need that serviced soon, and given the short trips, maybe some carbon cleaning down the road due to the turbo, maybe even coil packs.

As for the bumper, not a big deal, I had a MK6 before with the same damage, I left it till the end. However, if you did want to fix it, there is a place in London, ON, that has anew, painted bumper you can install under $500. (New Painted 2018-2019 Volkswagen Golf GTI Front Bumper). I'd do that, save getting a carfax record on the car.

Rustproof isn't an issue, comes with a corrosion warranty and I'm yet to hear or see any Mk7/7.5's with rust issues anywhere in the world.

If you do get another used car, sub $20k, no saying it won't have damage, rust issues later, or something else. That said, a Corolla hatch can be had for fairly cheap, otherwise in the small hatch category in a reasonable price/fit and finish, not a lot of options.

I wouldn't get a base golf over the GTI, you'll pay similar amount to buying yours out.
 
Also, and I would look into this more, speak with 2-3 VW dealers in the area so one doesn't take you for a ride. Though, you can buy it out and sell it for more (I've never sold privately, so not sure how long that would take). I reckon you could even buy it out and trade it in for more right now. GTI's are up in price, and finding a good 2018+ Autobahn, non-modded, ain't so easy.

Though once covid prices ease, I reckon prices to go down a bit, and with the new MK8's supposed to come out end of this year/next year, MK7.5's may drop a bit more. Though many are saying prices will rise on them, hence why so many sold out now because lots don't like the MK8 and consider it a step backwards, grabbing whatever 2021's they can.

How will the mileage be in excess by 20k, when you are at 53k now, and have 80k allowance? Unless you mean under
 
ScorpionT16 said:
How will the mileage be in excess by 20k, when you are at 53k now, and have 80k allowance? Unless you mean under
Click to expand...
I was confused about that too. I think he means he has extra mileage not excess mileage. Either way can make a buyout more attractive though. If he he under, he gets a lower mileage car for the agreed price, if he is over, it narrows the price gap between turning it in and keeping it.

Selling a car privately for >20K is probably balls. I find it easier to sell cheap things privately but as the price climbs fewer people have the cash (or want to arrange a private loan).

Trading it for more than 20K is an interesting concept. Easy for him to do, no idea if it would work financially.
 
what is the used value of that car? > 20K ?
what are the excess km charges going to total?
to me, it's a pure dollars and cents matter

also, any tax advantages that made you lease?
or was it just the low monthly pays?

it is possible to stick a lease back on a used car
interest rates are of course higher
but the tax advantages continue versus a loan or cash deal
 
@GreyGhost :
The short drive cycles are also killing my fuel economy. Not to mention each time I want to take the bike out, I start the car, move it forward a few feet to get the bike out, then reverse it and turn it off. Sometimes this happens multiple times in a day.

I also did consider going EV, but was hoping for Ontario EV rebates to return. I think we currently only get federal rebates. I actually had a 100a electric panel installed in my garage for potentially getting an EV (and because I wanted to buy a welder to learn/practice).

The Ionic looks nice, but the Kia Soul EV (imo) looks more functional for our needs (baby + large dog).

I'll start pricing out the EVs. I know VW is also releasing their ID 4 later this year, but I think it's going to be out of the budget.

@ScorpionT16 :
Yes, I meant I would have an excess of 20k to drive (poor phrasing on my part). I'll be under the 80k limit by 20 to 22k.
Thanks for that link for the bumper. That's an incredible price considering OEM is about $1000+. If we buyout i'll likely order it for $500. Worth it.

Ours is bone stock, never abused, and all scheduled maintenance done at the dealer (Don Valley).

My pops has a 2019 Corolla hatch and we swapped cars for about a month so he could put some mileage on our GTI. I didn't mind the Corolla at all, but the CVT transmission is just horrible. It likely won't be an issue given the short amount we drive, but man...it really sucks. My dad wanted his car back because he was having a hard time getting in and out of the GTI (his back is no good).

The dealer wants me to go in around Fall to discuss options. I'll ask about buyout options and any hidden fees. Again, I think it's just taxes you have to pay, but I don't know. I've never leased before.
 
J_F said:
what is the used value of that car? > 20K ?
what are the excess km charges going to total?
to me, it's a pure dollars and cents matter

also, any tax advantages that made you lease?
or was it just the low monthly pays?

it is possible to stick a lease back on a used car
interest rates are of course higher
but the tax advantages continue versus a loan or cash deal
Click to expand...
Kijiji has a couple 2018 GTI's. One is 21K which seems reasonable. The other is 35K which is cuckoo bananas. You can get an R for that money.
 
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if you payout the residual, it's just one big lease payment on the end
it will be plus taxes, dealer will probably charge some fees as title swaps over to you
 
If you do decide to get rid of it, what I've always done with my leased cars was to list them for private sale at market value, then meet the buyer at the dealership and have them buy out or re-lease it. For an optional fee, the dealership can give it an inspection and make it a "certified" used vehicle, which gets the buyer a factory extended warranty, and potentially incentivized lease and finance rates. This all assumes the vehicle's residual value is below market value.
 
Relax said:
If you do decide to get rid of it, what I've always done with my leased cars was to list them for private sale at market value, then meet the buyer at the dealership and have them buy out or re-lease it. For an optional fee, the dealership can give it an inspection and make it a "certified" used vehicle, which gets the buyer a factory extended warranty, and potentially incentivized lease and finance rates. This all assumes the vehicle's residual value is below market value.
Click to expand...
Forgot a few things. Check with a few dealerships first, starting with the one you leased it from to make sure you get all the costs involved. They may have caught on to this since that last time I did it, and might be charging a fee. The buyer also needs to be informed what you're doing, because they'll be signing with the dealership and then separately cutting you a cheque or cash for the difference in the agreed "sale" price.
 
Relax said:
Forgot a few things. Check with a few dealerships first, starting with the one you leased it from to make sure you get all the costs involved. They may have caught on to this since that last time I did it, and might be charging a fee. The buyer also needs to be informed what you're doing, because they'll be signing with the dealership and then separately cutting you a cheque or cash for the difference in the agreed "sale" price.
Click to expand...

I tried this once and the dealership said they couldn't sell the car to someone other than the person whose name was on the lease agreement.

It might depend on the manufacturer. If this is the case, you would have to transfer the lease over to the new buyer before they bought it out themselves, which involves a lease transfer fee. Also, you had to do the transfer with 6 or more months left on the lease. Or maybe it was 3, can't remember, but whatever the case, you couldn't just show up at the end of the lease and do a lease transfer.

Things to double-check before you go down this route.
 
stangn99 said:
@GreyGhost :
The short drive cycles are also killing my fuel economy. Not to mention each time I want to take the bike out, I start the car, move it forward a few feet to get the bike out, then reverse it and turn it off. Sometimes this happens multiple times in a day.

I also did consider going EV, but was hoping for Ontario EV rebates to return. I think we currently only get federal rebates. I actually had a 100a electric panel installed in my garage for potentially getting an EV (and because I wanted to buy a welder to learn/practice).

The Ionic looks nice, but the Kia Soul EV (imo) looks more functional for our needs (baby + large dog).

I'll start pricing out the EVs. I know VW is also releasing their ID 4 later this year, but I think it's going to be out of the budget.

@ScorpionT16 :
Yes, I meant I would have an excess of 20k to drive (poor phrasing on my part). I'll be under the 80k limit by 20 to 22k.
Thanks for that link for the bumper. That's an incredible price considering OEM is about $1000+. If we buyout i'll likely order it for $500. Worth it.

Ours is bone stock, never abused, and all scheduled maintenance done at the dealer (Don Valley).

My pops has a 2019 Corolla hatch and we swapped cars for about a month so he could put some mileage on our GTI. I didn't mind the Corolla at all, but the CVT transmission is just horrible. It likely won't be an issue given the short amount we drive, but man...it really sucks. My dad wanted his car back because he was having a hard time getting in and out of the GTI (his back is no good).

The dealer wants me to go in around Fall to discuss options. I'll ask about buyout options and any hidden fees. Again, I think it's just taxes you have to pay, but I don't know. I've never leased before.
Click to expand...

Good options above. I think the easiest would be to buy it out, and then trade it in or sell it to the dealer, you may get 22-24k for it, so not a whole lot extra, though a good chance to make some $$$ in a high market.

Also, if you post in the MK7 North America forum, VW Vortex or the GTI RedFlags thread, I'm sure you will find people willing to pay you 23-25k for it. It's an enthusiast car, and one owner, with service records, some warranty, and low miles is a good bet. Most can get their finance/loan approved at the bank with lower rates than a dealer anyway. The dealer will list it for 26-29k. So if you do like it, and want it, I'd keep it over getting a used car in this market and enjoy it, or sell it and wait a few months for the market prices to drop and get something next year.

I looked at a 2018 Autobahn last year in September, it had 60k kms, and was for sale at Ford Meadowvale. Was listed for $30k then, I didn't like that it was blue like my at the time MK6, so didn't feel like an upgrade lol. They dropped it to 28k before it got sold I believe.
 
Lightcycle said:
I tried this once and the dealership said they couldn't sell the car to someone other than the person whose name was on the lease agreement.

It might depend on the manufacturer. If this is the case, you would have to transfer the lease over to the new buyer before they bought it out themselves, which involves a lease transfer fee. Also, you had to do the transfer with 6 or more months left on the lease. Or maybe it was 3, can't remember, but whatever the case, you couldn't just show up at the end of the lease and do a lease transfer.

Things to double-check before you go down this route.
Click to expand...
This is just dealership Bs....they want the car themselves. Any dealer can do what they want (emphasis want). Most dealers (including mine) will just charge you a fee to buy it out.....with a higher fee if it isn't your car. Shop around to some dealers and see who'll play ball. Do NOT buy it and then try to sell it. You will lose all the taxes. Just find out which dealer will play ball...then find a buyer to agree to a price above your buyout number....then walk them into the dealership and the dealer should just take the fee out of your profit.

So if you have a $20k buyout and sell it for $24k and they have a $600 admin fee you pocket $3400.

IF you want another car try and do this at a dealership that you are doing business with for the new car as that $3400 will be plus tax savings.
Most dealers will have another dealer that will help them out with off brand buyouts (so if you want a GM or Toyota you can still trade there).
You will still face the buyout fees from the VW dealer they have to deal with etc...
 
You do 5-7000km a year so is a $20,000 car with likely full coverage insurance worth it?
I'm guessing no. My opinion is buy a decent beater for $5000 or less and just have liability insurance on it. Saving a ton of money and not worrying about scratches or dings.
If you ever have to take a long trip and need something more reliable then you can just rent something.
 
Lightcycle said:
I tried this once and the dealership said they couldn't sell the car to someone other than the person whose name was on the lease agreement.

It might depend on the manufacturer. If this is the case, you would have to transfer the lease over to the new buyer before they bought it out themselves, which involves a lease transfer fee. Also, you had to do the transfer with 6 or more months left on the lease. Or maybe it was 3, can't remember, but whatever the case, you couldn't just show up at the end of the lease and do a lease transfer.

Things to double-check before you go down this route.
Click to expand...
It's been a while since I did this with 3 cars, so maybe things have changed. Any limitations should be in the contract, though.
 
If it ain’t a stick shift rwd 400+ HP then there ain’t much fun to be had in a cage beyond miatas probably.

Daily driving buy a cheap old Corolla for less than 5 digits to actually drive, bang for buck nothing beats a bike for fun.

Full insurance is mandatory on leased or loaned cars which is more money ****** away for nothing. Liability is all I’d grab. If I had cash to burn a V8 mustang would be hella fun to daily, fwd or awd? May as well get a bike at that point for less than 1/10 the cost.
 
CriticalCore said:
If it ain’t a stick shift rwd 400+ HP then there ain’t much fun to be had in a cage beyond miatas probably.

Daily driving buy a cheap old Corolla for less than 5 digits to actually drive, bang for buck nothing beats a bike for fun.

Full insurance is mandatory on leased or loaned cars which is more money ****** away for nothing. Liability is all I’d grab. If I had cash to burn a V8 mustang would be hella fun to daily, fwd or awd? May as well get a bike at that point for less than 1/10 the cost.
Click to expand...
Be careful with rwd. A tiny chirp or slide and the 172 mafia has you.
 
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