Ask a car salesman
I too would like to understand vehicle leases as I'm about a year from replacing my old pickup. How do you build equity in a leased vehicle? I never considered that option because I always viewed leasing as a way to get a new vehicle at a reduced monthly payment. Downside was that after the term was up, you're left with nothing unless you buy the vehicle.
They "calculate" how much the car will be worth at the end of the lease. If your vehicle is worth more than that calculation you have equity. If it's worth less you won't owe the difference, however the price they tell you that you will pay for the vehicle once the lease is over stays the same. When I traded in my van last year I had 1,500 in equity and I went to a different dealership, told them I had equity but did not tell them how much, and I actually got 3,000 in trade for the vehicle! That's in addition to what I owed for the vehicle had I bought it.
Overage on miles can get expensive if you drive a ton of miles. I'm on pace for about 9,000 miles over by the end of my lease, which, at 15 cents a mile would cost me $1,350, but then most dealerships won't charge you the overage if you buy another vehicle from them. That's what Toyota does, at least. Not sure what Dodge will do to me, but as of now I plan on buying the vehicle anyway. It'll be a lot more affordable in 2 more years.
Each dealership is run differently. The dealership that I'm at has a 60 day turn policy. If not sold in 60 days it gets wholesaled and replaced with a quicker moving product. Yet I know some dealerships that have inventory up to 1 year and its still sitting there. In our business the inventory depreciates every day. So the longer you have it the less its worth. At least on the Used Car side anyways. Have you monitored it since the begining of February ? Have they slowly been lowering the price to attract more attention ? We adjust the pricing on our U/C inventory every 14 days.
Question: How long is a used car typically on a dealer lot? With Car Fax reports, it is now easy to see when a dealer first offers a vehicle for sale. At what point can a buyer use this as leverage? I'm looking at a unique truck that seems to be a touch overpriced. It looks to have been on the lot since early February. Does this give the dealer any added motivation?
1. The complete dash cluster goes out sometimes only parts like the fuel gauge wont work 2. 3 water pumps 3. 2 power steering pumps 4. ABS system 5. emission air pump 6. Exhaust manifold will develop big cracks 7. Electrical issues, signal, head or tail lights short out 8. Front wheel bearings about every 35K 9. Rotors about every 45k 10. Eats front tires 11. Takes 7 qt per oil change 12. Only gets 15mpg with a tail wind 13. Trailer light system will short out 14. door switches fail 15. possible weak tranny so told to flush it every 35k 16. it will auto lock so never just close the door with keys in ignition 17. Fan resistors fail then you may only have one fan speed 18. Intake manifold will start to leak as they used a plastic gasket and the antifreeze eats it. 19. exhaust resonator will fail 20 3rd set of tie rods.
The good - It's never left me broke down on the side of the road. It can tow a lot. Smooth ride. Haven't got stuck in the snow yet.