I want to buy the car I've been leasing...

January 16, 2016 7:32 PM

... but don't have a ton of experience arm-wrestling dealers. Know any negotiating tactics? Tricks to watch out for?

I've been leasing a Honda Civic from a dealership in LA for the last 3 years (I'd also leased from the same dealership for the 3 years prior, so we have some history). I now wish to buy the car, which has about 30,000 miles on it (well under the "do not exceed" level).

I believe blue book "fair price" is around $12,500, and the suggested retail is as high as $15,000. I'd like to offer a substantial downpayment (around $7,000 or $8,000), and pay off over 3 years and want the best total price I can get.

Any idea what to expect?

Think I can leverage my leasing history at all, or will they treat it as totally irrelevant?

(For the record, I realize leasing was a money-loser. Right now, I'm trying to make the most of a tiny windfall and investing in reliable transportation makes sense to me. Given the low mileage of the car I'm driving and my familiarity with its maintenance history I'd love for this to work out, but buying used from a private individual is still an option).

posted by ducky l'orange to Work & Money (7 answers total)

You've already negotiated a price - it's the buyout amount/residual value in the lease agreement. What you're trying to do is get a price lower than that. That's probably obvious to you, but I'm mentioning it just in case you didn't realize you have a fall-back position.

All negotiation is based on your BATNA (best alternative to a negotiated agreement). Your alternatives here are:
a) The pre-negotiated residual value amount.
b) The price of buying from a private individual.
c) The price of buying from a dealership.
The cost of b) is likely the lowest. Figure out what that is. It's important later...

Think I can leverage my leasing history at all, or will they treat it as totally irrelevant?

Your leasing history is a sunk cost and has no impact on this current transaction. Actually, it's to your detriment, because they know that you are invested in the car (and hence, will pay more money).

I now wish to buy the car, which has about 30,000 miles on it (well under the "do not exceed" level).

This suggests your car might actually be worth more than your pre-negotiated buyout amount in your lease agreement which assumes that you use most/all of the miles allotted to you. This again is to your detriment.

I'd like to offer a substantial downpayment (around $7,000 or $8,000), and pay off over 3 years

This is one of the few things you have going for you - car companies make money off of financing and offering to finance through the dealership/Honda may get you a bit of lee-way in terms of buyout price.

To be honest, I don't think you have much going for you. If you do want to try this out, don't negotiate too much with the dealership/Honda - send them an email or letter saying you'll buy the car for $X, where $X is approximately the cost of the BATNA previously established. The dealership/Honda will either ignore you or come back with some other offer. Figure out if that other offer is worth the premium over your alternative (for instance, due to your maintenance history). Go back and forth, but don't ever talk to them on the phone - this is business and they are better at it than you are.
posted by saeculorum at 7:54 PM on January 16, 2016 [6 favorites]

Doesn't your lease agreement specify a purchase price? Ours did for our Civic, so we just paid that price at the end of the lease instead of turning in the car. It was a good deal because the car ended up being worth more at the end of the lease than the contracted price. There was no negotiating.
posted by gatorae at 7:56 PM on January 16, 2016 [4 favorites]

A few years ago, someone posted a great comment on negotiating car prices (which may be helpful).
posted by triggerfinger at 10:34 PM on January 16, 2016

Go onto Honda Finance and look at your pay-off price. Chances are it will be lower than buying the vehicle from the dealer. Call Honda (not the dealer) and see if they can re-negotiate the financing to something you're comfortable with. Or, get a loan from your credit union and just pay the vehicle off entirely.

That will get you out of paying taxes on it, and a bunch of dealer bullshit.
posted by Ruthless Bunny at 6:23 AM on January 17, 2016 [1 favorite]

Response by poster: Fantastic advice. Thank you, everyone.
posted by ducky l'orange at 3:37 PM on January 17, 2016

Regarding that great comment from 2006 - Edmunds no longer has separate listings for invoice price, MSRP and true value. They only show MSRP and then you need to submit a form to the dealers to figure out what price they are willing to accept, but they won't tell you that in an email or over the phone. They will make you go in.

There are some calculators and websites that will calculate a TrueCar price, but most of the dealers I visited this month insisted that their corporate office was in a lawsuit with TrueCar and they would not honor any of those prices.

Because you can't see the invoice prices, it's very hard to pick a number and say "this is what I will pay" via email.
posted by CathyG at 4:36 PM on January 17, 2016

You don't normally lease from a dealership. You lease from the manufacturer, directly. Honda even has their own bank. If you want to buy out your lease, you'll have to contact Honda to find out the buy-out price. There isn't any negotiating. The price is essentially set in your lease contract.
posted by TickTickVroom at 1:42 PM on April 21, 2016