Volvo Lease End Options Question

[tenmiler]

I've put it off long enough-my 2008 XC70 comes off it's 2 year lease in a few short weeks. I honestly wouldn't mind having another year with this car, it's been great to me. I'm about 5K under my mileage, and the inspector guy came out and said my car looked nearly brand new. I've been lucky with the wear on it.

But the buyout rate that Volvo C. F. lists is fairly high for comparable used models, so I've got a question about whether Volvo Car Finance (this is the first time I've used them) negotiates with customers, or the dealer does all this, or if it's just one of those things where they won't budge?

I leased my 04 XC through Wells Fargo, and they negotiated HARD to get me to buy the car, down to a screaming deal. But I don't get the sense that a dealer is going to be incented to take a lower offer than the buyout.

Any insight would be great!

[DrJazz]

When I returned my 2004 lease after 4 years with Volvo Financing (might be a different entity in Canada), I really wanted to buy out my car but, like your situation now, the residual was far too high given the market price of similar used '04s. There was absolutely NO negotiating permitted - either pay the agreed buyout price or return the car.

So I returned the car and began a search for a used XC70 to replace it (new XC70s at the time didn't have favorable lease deals and still don't actually). A few days later I saw a car that I liked - an 04 in the same color with the same options. Turned out to be the same car I had just returned, but priced much lower than my buyout would have been. So I bought it back! :) That worked out well until I re-experienced what it's like to have an expensive car out of warranty. I just sold it and bought a new 2010 XC70 with an extended 6 year/120,000 km warranty.

Please let us know how it works out for you.


Cheers,

[TR6-XC70]

Out here in Belgium the difference between Volvo CF lease buy-back (or any other fleet lease) is they ask the dealer "premium used car" selling price. And since you buy from a professional organization they have to stick sales tax on the price (VAT over here).
If indeed you buy a second-hand car from the brand dealer you get, and pay, a warranty. That you don't get, but pay, in the case of a buy-back from the leasing company. Including the sales tax on the premium.
However the car is written off by the leasing company, e.g. professionals buy at slightly above residual book value, making a killing. Often the buyers are the branded garages themselves. Most cars are calculated written off after 4-5 years or 100Kmiles (160K km), whatever comes first. Residual book value is defined here as 16% of purchase price.
There is a perfectly legal trick to obtain your car at significantly lower price than the official leasing buy-back rates: Your garage buys back your car from the leasing company at slightly above book value. Since the car is then officially on your garage's books you negotiate with them, and you are more or less aware of their purchase price. Evidently your garage will require a margin on the resale plus maybe expect some sort of incentive to do the deal with you. The good thing is this is perfectly legal, as long as all money exchanged goes through your garage's books. Now, has anyone ever heard about illicit liquidities in the used car business ?
Keep in mind, a brand garage makes their money on repairs, car resale, car financing.