Tom in Austin

I think we all knew this was coming but good Bloomberg article confirming the coming impact of lease returns on the used car market ... https://www.bloomberg.com/news/artic...=pocket-newtab.

Interesting possible approaches lessors may try to buy time and protect residual values .. like reduced-rate lease extensions. Or maybe they'll go "outside the box" and shuffle excess inventory to Uber drivers or something.

Gonna be a great time to be a buyer in the high-end market since so many are leased.

emilner

A little misleading. It's not a flood of lease turns that are hitting the market, it's that no one is buying cars right now. The same number of lease returns are expected this year as last. Frankly lease returns might be down since some people will decide to hold onto their car.

ygmn

more about used car inventory growing and no on buying.
so prices will crash...

YEAH for the buyer of used cars

hyperion667

There are several things I could care LESS about right now.....and dealerships are on that list

TNS550

Read this article yesterday about dealers refusing to accept lease returns: Lease Returns

hyperion667

^after reading through that........fawk dealerships!! fawk 'em into the ground!!!!!!!!! Same goes for gas companies and restaurants too!!

Tom in Austin

Amazing, dealers flat out refusing to accept lease returns ... I suppose it's somewhat understandable if the lease were actually with the manufacturer's finance company and the dealer's operations were not open for business. Still, you'd think the reputational impact would be awful.

konigstiger

jumpman726

I read another article about more people posting their cars on sites like swapalease.com or leasetrader.com to get out of their lease. People are worried they won't be able to afford their lease and/or because the lockdown is preventing people from driving as much, so there's no need to pay for a car that you can't drive anywhere.

bkdc

The used car market is going to tank due to lack of demand. In 2008/2009 it was lack of demand because of lack of credit/financing as the credit market froze. Anyone willing to pay 100% cash at a used car dealer back then could walk off with an absolute bargain. This time, there is credit, but buyers are dealing with worsening personal finances. It's much worse this time around.

I said this before. Anyone willing to buy a used car in December 2020 will be able to walk off the lot with a bargain. As long as his personal (or business) finances are rock solid.

emilner

Agreed. I remember the rock solid deals. In Miami they were giving away searays. You could get a 330 that was $150k in 2007 for $40k. One auction had 50 of them up for auction, the prices were insane. I have been eyeing a place in Turks, maybe a deal will be had...

Mitch Alsup

None of this would happen if people actually ought their cars.

zpcsc

Any input on lease buy outs? Our lease expires in November and we would like to keep it. The salesman called us offering us to return it 5 months earlier, will cover overage in mileage and will give us a good deal on another lease but we are happy with this vehicle. I've posted in another thread but would like to hear if anyone can give us some tips on the process through Mercedes Benz, we have great credit and we've never been late on payments. The residual value is higher than the market value I've read the Mercedes is tough on negotiating the buy out. All input welcomed.

Thank you.

SndsoftheSbrbs

You should not buy it.

zpcsc

If we can negotiate the price? What's your reason on not buying it?
The reason why we like this car it's because it's a c-300 with an amg sports package which it seems rare to find. We've ran a carfax and it's clean just a fender bender we had.

SndsoftheSbrbs

You cannot negotiate the buyout price. You are not negotiating with a dealer, you are trying to negotiate with Mercedes-Benz Financial Services. They are not going to negotiate with you. You signed the contract. By purchasing it, you are paying significantly more than if you had just purchased the car from the beginning. Perhaps leasing isn't right for you?

bkdc

Yep... Better to turn in the car and then buy a separate used car at a much lower market price. It would be nice if you could track your current car and rebuy it later, but often it is sold to another dealership.

Tom in Austin

Another data point ... WSJ reports Hertz is negotiating with creditors, and may have to dump 150k vehicles from their fleet to avoid bankruptcy and stay in business.

Or, if they can't make a deal and liquidate, all 500k Hertz vehicles will be headed to the auctions.

Certainly not many Mercedes in that number, but nonetheless indicative of the pressures building in the industry.

teksurv

You can always negotiate a lease buy out. It is true, you cannot negotiate the residual, two different things.

theboogers

You can call a couple of dealerships tell tge you want to land the car with them and buy it. Give them the vin snd they will call mbfs and give u a price after they get it From mbfs wholesale. Done it before. Less than residual.

RJC

All these news stories are a troubling sign of the times, with more ahead. Things have been too good for too long with very little substance backing it up, as many Americans are still living paycheck to paycheck, and that's not a solid financial foundation for anything.

Have you guys also seen how stimulus funds are being used to play the stock market? https://www.cnbc.com/2020/05/21/many-americans-used-part-of-their-coronavirus-stimulus-check-to-trade-stocks.html In addtion, too many companies and individuals received money (some in the millions) that should not have..simply outrageous.

SndsoftheSbrbs

This is absolutely not true. The lienholder is not going to negotiate with you on your buyout price.

SndsoftheSbrbs

Any money I got from the government I saved and poured into market investments.

hyperion667

You actually got a check?

teksurv

You are correct, I did not state my point clearly. As was stated above, when your lease is finished, it is possible to work with your dealer to purchase the car, after turn in, for less than the residual was on your lease. Effectively you are buying a used car that's going through MBFS wholesale.

As to other points about the state of things in general, I agree that it's crazy and unfortunately going to get worse. No stimulus check here, as I would suspect for most in this forum, but those that are friends of mine that did get one they didn't always apply it in the way intended. The casinos are opening up here in SoCal after all...