Advice on trade in

[Derek Hale]

Hey all,



I asked about financing stuff for an STA in another post, now I hit another wall. I have a 2008 Ford Fusion SEL with 25k miles on it. Its a lease and was a 36 month (stupid mistake). Thanks to A-Plan and all that I don't owe a crazy amount on it for being two years in, I guess, I owe $13,960 as the lease payoff.



When I take it to the dealer to have them buy out the lease (as a trade in) and sell me an STA, they are offering me in the neighborhood of $12k, don't seem to go much higher either, checked two dealerships nearby. Thats adds about $2k to an ST I am already planning to spend quite a bit on, and pushes me over where I want to be on monthly payments (already going to be leaving a $250 payment to more than double that, but at least its to own).



Anyway, NADA on my car is between 14,375-18,500 depending on what you judge (Poor, Good, Excellent, etc). The specs on it are:

2008 Red Ford Fusion SEL I4 FWD

Sport Appearance Package

Moon/Tune

Basically everything except a Nav system, has remote start as well.

25,000 Miles

PERFECT looking, no scratches, dings, etc. Decent to Good tread life on tires. Regular (hell, better than regular) maintenance done.



I know not all dealers use NADA, but even when I look at what other dealers are selling less equipped Fusions near me with around the same miles, I still don't get it. I printed out three near me that had most everything the same except no Sport package and they were $15-17k.



All I want is enough to buy out the lease. Do you think I am in the wrong to expect that?



Sorry its so long.

 

[Jim parnell]

go to edmunds.com, they have a function that will find what cars comparable to yours is actually selling for in your area, this might give you a better idea whether the dealers offer is good/bad/meh. If you spending a ton on a new ST, there should be some room for negotiation imo. You could also just counter offer them you need the payoff on the lease for your Fusion, and see what they say.

 

[Thomas Rogers]

Derek,



I've leased several vehicles and each time I did I leased vehicles that I couldn't otherwise afford *AND* I went into the lease deal 100% certain I would keep the vehicle through the duration and THEN return it. That, and leasing vehicles with high residual values are the cornerstones to smart leasing.



You are breaking those rules. You will pay for it.



Figuring out what is a "good" lease payoff is not a simple thing. You need to know a lot about your vehicle, but the good news is that most of what you need to know should have been in your initial lease contract.



Take a look at the link below. It describes an equation for figuring out a good lease payoff amount. Plunk in your numbers and see what you get.



TJR

 

[Ron Tobias]

I always find the NADA estimate to be much higher than a dealer will allow. Try KBB, I find they are usually closer.





Oh and you'll never get the Excellent price

 

[TrainTrac]

Also, wait them out. Don't go back in until the 30th or 31st of the month, about an hour our two before closing. They might budge a little more at that point to close the sale. Not only will it be the end of the month, but also the end of a quarter, and they want the best sales numbers possible for the month and quarter.

 

[Richard L]

I really does not matter what NADA, Edmunds, or KBB say your vehicle is worth. You will only get what the dealer is willing to pay...They know they have you over a barrel. They know what your payoff is on the lease and they will want to make a profit after your lease is paid off. They will never give you more than the wholesale value and if they do they will not discount the vehicle you are wanting to buy.



Your best strategy is to sell the vehicle for enough to pay off the lease, or continue the lease and turn the vehicle back in. They will offer you all kinds of incentives like no turn in fee, etc to buy or lease your next vehicle from them.



...Rich

 

[Thomas Rogers]

Derek,



Read what Richard and I wrote, and forget about blue book or what edmunds says the Fusion is worth. That's pretty much moot. The worst case is that you owe all the remaining lease payments as the pay-off. That's the worst case. However, to figure out the actual payoff that you should get grab your lease contract and hit the web link I sent and plunk in numbers and calculate it yourself.



What a Fusion would sell for, or what your Fusion would sell for seems like pertinent information; but the reality is that with leasing the bigger factor is depreciation. When returning a lease early the unrealized depreciation (also called the "unpaid depreciation") is something you are not liable.



Read the link I sent to better understand. Of particular interest to you is the "Note" at the bottom of the page of the website I mentioned. The payoff is a Net Payoff, ie. what is owed Ford if you wanted to buy the vehicle now. If you are trading the vehicle in, then the Net Payoff is substracted from the wholesale (auction) price of the vehicle.



If the dealer is saying that surrendering your leased Fusion is adding 2K to the price of your new STA, then that means that the Net Payoff is 2K *more* than the wholesale price of the vehicle (which is what you said).



It's very possible that a 12k offer on your vehicle is within reason given it's wholesale value.



As Richard said, they have you over a barrel.. If they've accurately calculated your pay-off as almost $14K, then find someone you can privately sell the vehicle to for that amount and you will be money ahead.





Good luck.



TJR