Tips on Buying Cars: 6 Months Toward End of Lease, jeep grand cherokee, toyota rav 4

Question
QUESTION: Hi Ray,

We're planning to purchase a 2012 Jeep Grand Cherokee and will probably be trading in our leased 2009 Toyota Rav 4 Base to the Jeep Dealership for them to pay-off.

Is it a good idea to go thru with the plan considering we still owe about 6 months left on our monthly payment towards the end of the lease or $3846?

Rav4 is currently 14,400 miles and option to buy amount in receipt is around $13,900 and I'm sure there is negative equity too.
We are trying to lower down our payment around 480 or so a month, we have a good credit around 733 on both.  

Thanks

ANSWER: Hi Xian,

I am answering this Q based on the assumption you are currently paying about $ 640 a month incl taxes with 6 months remaining ?

You cannot trade a car that don't belong to you, however you can turn the Rav back to Toyota and the Jeep dealer may be able to build in the negative factor $ 3,846 into your new payments but, I am 100% sure your payments will be way beyond the $480.

I suggest you drive the Rav till end of lease and at that time you can walk away provided there will not be extra charges for wear and tear or excess miles,,, if you return car now Toyota will also want the balance of outstanding payments.

Ray  http://www.usedcartips.org/

---------- FOLLOW-UP ----------

QUESTION: Follow up question:

Jeep offered to buyout the lease and pay it off, can they do that? Or can a credit union buy-out a lease too? I understand i will still end up paying beyond $480 but i just want to know if it's possible for a dealership or credit union to buy-out a lease?

If so, i think I am just going to keep paying my monthly payments until I'm on the last 3 or 2 months left.

Thanks Again

Answer
Yes anybody can buyout the lease as long as you agree to the new terms and this is where that nasty $ 3,836  come into play that will be hidden / added to your new investment,,, you are thinking right by waiting towards end of terms to minimize losses providing you are not over mileage allowance which would change the whole picture.

You got time on your hands to plan the best deal, should it be turning in the Rav a month or two prior to termination so be it but at this moment the figures are kind of heavy againt you, so you are thinking right by waiting till towards the end.

Do this,,, go to this link on my website http://www.usedcartips.org/BEFORESHOP.html " study " and get 2 free new car quotes, with those in hand you will know your future payments

PS,,, It's middle of night in CA,,, don't you ever sleep,,,lol