In need of Lease End advice

[RatherBeDrivingaManual]

Hello New England - Maine.
I'm looking to hear from those of you that have bought a vehicle at the end of a lease or flipped a lease vehicle.

I currently have a 2020 Jeep Gladiator and my lease ends October.

My plan is to order a Maverick when it opens up in August. I have a great vehicle now so I am absolutely able to wait.

I can buy my Jeep at the end of the lease for $28k. I have contacted a few dealership and I'm being offered $36-38k trade in. Obviously I'm looking to sell it privately for more.

The lease is with Christler Capital. I believe I have to buy it + pay tax. Anyway out of the tax if I'm flipping the vehicle. One dealership said I would get it back as a tax credit. I cannot find a Maine tax law on this. It only may happen for excise tax.

What advice do you all have you me?

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[n0maverick]

If you purchase the maverick the trade value typically is deducted from price for taxes. so you'd pay taxes on $28k when you buy your lease but get a deduction of $35k trade value from your mav price. Or whatever the value is when it is traded. On a lease you only paid sales tax monthly on your montly payment/value depreciation.

 

[RatherBeDrivingaManual]

On a lease you only paid sales tax monthly on your montly payment/value depreciation.

Thank you yes I know that part ^

Is there a tax law I can look up for what you said happens when I trade in a $35k vehicle for a $28k Maverick?

 

[Darnon]

Is there a tax law I can look up for what you said happens when I trade in a $35k vehicle for a $28k Maverick?

https://legislature.maine.gov/statutes/36/title36sec1765.html

 

[atomguy245]

If you trade in your lease, then what is really happening is the dealer you are trading at is buying the lease out and keeping it for themselves. The Ford dealer you plan to work with should know the answer to this. Here's the real question: Is Chrysler Capital allowing its lease holders to trade in their vehicles to other dealers at lease end? Many manufacturer's finance arms have put restrictions on doing that, requiring lease holders to return the cars to the same brand dealership (because they don't want YOU to reap the massive reward you are anticipating). Ford Red Carpet Lease has been doing exactly that for a very long time

 

[Portcqb]

Just keep in mind orders reopen in August but those wont be built until after October very likely at some point in 2023. Some 2022 orders wont be built due to shortages by the 23 model year start and will roll into early 23 model scheduling.

 

[RatherBeDrivingaManual]

If you trade in your lease, then what is really happening is the dealer you are trading at is buying the lease out and keeping it for themselves.

It Seems like carvana may be able to do that, buy from me the right to buy the vehicle at the end of the lease / buy out the lease

One Ford dealer I spoke to said they had expirenced not being able to buy out a lease from Chrysler Capital, that the few people they worked with before had to buy the vehicle out first.

I think my lease and September 31st. So I may have to buy this vehicle and drive it for a few more months before the Maverick arrives arrives. I'm also fine with that because the more payments I make on the Jeep the less I owe when I trade it in. I just don't want to get stung really bad with taxes buying two vehicles back to back.

 

[RatherBeDrivingaManual]

Just keep in mind orders reopen in August but those wont be built until after October very likely at some point in 2023. Some 2022 orders wont be built due to shortages by the 23 model year start and will roll into early 23 model scheduling.

Thanks yes good advice. I'm fine with ordering in August and taking delivery anytime after October. Lease ends Sept/oct

 

[RatherBeDrivingaManual]

https://legislature.maine.gov/statutes/36/title36sec1765.html

Rock and roll. I think that is exactly it. I had only found Maine gobernment pages talking about size taxes. Thank you


Seems like the gobernment won't make me pay tax on two vehicles back to back

 

[Rob Cactus Gray]

There is like a 5 percent chance you get your Maverick in October. I would call and buy the lease now. Pay the sales tax and be done with it. When the Maverick comes in buy it and sell the Jeep private party. You will need to pay sales tax on both the Jeep and Maverick. You will still be up a few grand.

 

[RatherBeDrivingaManual]

I would call and buy the lease now.

I don't buy the lease out now because that would take dropping $1500-3000 (I don't know off the top of my head) to end the lease.
I don't want to take that money out of a high apy% savings account (higher % than the lease).

Switching to financing should be a lower interest % than the lease but my monthly payment would go up. And I don't want the monthly payment to go up. I'm better to increase my pre tax 401k contribution than move to a higher monthly vehicle payment.

 

[Rob Cactus Gray]

I don't buy the lease out now because that would take dropping $1500-3000 (I don't know off the top of my head) to end the lease.
I don't want to take that money out of a high apy% savings account (higher % than the lease).

Switching to financing should be a lower interest % than the lease but my monthly payment would go up. And I don't want the monthly payment to go up. I'm better to increase my pre tax 401k contribution than move to a higher monthly vehicle payment.

I have a different mentality as I don’t like leases in the first place. My retirement fund is maxed out, so I get that. I’m “broke”, but I will make way more in retirement than I do now. Might consider leases then.

 

[RatherBeDrivingaManual]

Might consider leases then.

That's why I leased. At the start gas was 2.50/gallon in 2019. I wanted to be able to ditch this truck if the value tanked or fuel was $5+

Also because jeep thought the vehicle would not depreciate much, so the monthly payments were a lot lower = greater amount going into savings & staying in saving ect...

 

[OB1e]

Do the lease buyout now. DCU will give u 2.24% 65mos at best. Have the sales tax rolled into the loan. When your mav becomes available dump the jeep to CarMax for more than what the dealer would give u, you should have some good profit.

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