Lexus Lease Buyout in Florida... Who's got the Facts?
10-07-20, 08:03 PM
#1
Racer
Thread Starter
Lexus Lease Buyout in Florida... Who's got the Facts?
I'm hoping a CL member here who's been down this road already can offer some enlightenment on this topic.
I've always purchased and never leased, I usually drive 18K miles/year and keep my cars a long time. But with the lease cash offered in 2018, my spreadsheet told me that leasing new and buying at the end would save me a few thou. Did research, asked questions, thought I had it all figured out, but it seems I might have missed a couple things.
1. Rules and Regulations covering car leases differ by state.
2. Appears I cannot simply obtain the payoff amount, go to a bank, get a loan (or cash) and pay LFS the balance in full. Looks like I am required to purchase the car at a dealer. Is this true?
3. The dealer now has the opportunity to tack on their junk fees, typically a dealer fee ($599 - 999 is typical) and an electronic titling fee ($99 - 199), in addition to the required sales tax and registration, tag and title processing fees. That's a potential $1,200 I did not anticipate; I won't be in the red but it still stings.
4. Would all dealers tack on junk fees? For example, the Autonation dealer will likely charge $799 and $149 plus TTL, but JM Lexus does not charge a dealer fee... if I schedule my lease buyout at JM Lexus, can I save on those fees?
5. Are any of those fees negotiable in a lease buyout transaction?
6. Any other fees I did not anticipate?
I still have another 11 months before my lease is up so it's time to research this issue a little more in depth so I can make the best decision when it's time to act. I'll have about 24K miles on on my 36K lease mileage allowance.
All Help would be appreciated.
And I am sure this is a topic where others can learn more about the pros and cons of leasing.
I've always purchased and never leased, I usually drive 18K miles/year and keep my cars a long time. But with the lease cash offered in 2018, my spreadsheet told me that leasing new and buying at the end would save me a few thou. Did research, asked questions, thought I had it all figured out, but it seems I might have missed a couple things.
1. Rules and Regulations covering car leases differ by state.
2. Appears I cannot simply obtain the payoff amount, go to a bank, get a loan (or cash) and pay LFS the balance in full. Looks like I am required to purchase the car at a dealer. Is this true?
3. The dealer now has the opportunity to tack on their junk fees, typically a dealer fee ($599 - 999 is typical) and an electronic titling fee ($99 - 199), in addition to the required sales tax and registration, tag and title processing fees. That's a potential $1,200 I did not anticipate; I won't be in the red but it still stings.
4. Would all dealers tack on junk fees? For example, the Autonation dealer will likely charge $799 and $149 plus TTL, but JM Lexus does not charge a dealer fee... if I schedule my lease buyout at JM Lexus, can I save on those fees?
5. Are any of those fees negotiable in a lease buyout transaction?
6. Any other fees I did not anticipate?
I still have another 11 months before my lease is up so it's time to research this issue a little more in depth so I can make the best decision when it's time to act. I'll have about 24K miles on on my 36K lease mileage allowance.
All Help would be appreciated.
And I am sure this is a topic where others can learn more about the pros and cons of leasing.
Last edited by chinee; 10-07-20 at 08:07 PM.
10-07-20, 09:10 PM
#2
Every dealer is going to tack on some sort of "doc" fee as well as TT&L. What that fee is will vary from dealership to dealership and no, they're generally not negotiable.
When you purchase out your lease, it is the same as buying a used car at that point with the payoff being your vehicle's price; you're simply purchasing from the manufacturer (as they're the true owner throughout the lease) and not the dealer itself. I usually don't advise LBO's as you're paying sales tax twice on the car, once when new and once again at the end of the lease.
A dealer will most likely take the liberty of marking up your interest rate to make it worth their time and effort, so be cognizant of that too.
When you purchase out your lease, it is the same as buying a used car at that point with the payoff being your vehicle's price; you're simply purchasing from the manufacturer (as they're the true owner throughout the lease) and not the dealer itself. I usually don't advise LBO's as you're paying sales tax twice on the car, once when new and once again at the end of the lease.
A dealer will most likely take the liberty of marking up your interest rate to make it worth their time and effort, so be cognizant of that too.
10-07-20, 10:54 PM
#3
Many of the fees are negotiable. CA has $85 doc fee limit. I'm not sure in FL or other states. I think you are on the right path by shopping the OTD price for a buyout from different dealers. One of my friends also shopped around and got a great deal and saved some money and got his Benz CPO as well.
You can ask LFS on buying out the lease to see if there's any negotiation on that, I don't really think there is but no harm in asking. I helped one of my friends trade-in his lease vehicle with 4 months left on payments for another car. So he still has to pay that 4 lease months. I dealer give a value covering that 4 months lease payment + residual + extra cash after negotiating. He was able to take advantage of the strong used car values and still made $$$ out of it.
Here's a great video to check out from Kevin Hunter:
You can ask LFS on buying out the lease to see if there's any negotiation on that, I don't really think there is but no harm in asking. I helped one of my friends trade-in his lease vehicle with 4 months left on payments for another car. So he still has to pay that 4 lease months. I dealer give a value covering that 4 months lease payment + residual + extra cash after negotiating. He was able to take advantage of the strong used car values and still made $$$ out of it.
Here's a great video to check out from Kevin Hunter:
Last edited by websurfer; 10-07-20 at 11:05 PM.
10-08-20, 04:40 AM
#4
Racer
Thread Starter
Every dealer is going to tack on some sort of "doc" fee as well as TT&L. What that fee is will vary from dealership to dealership and no, they're generally not negotiable.
When you purchase out your lease, it is the same as buying a used car at that point with the payoff being your vehicle's price; you're simply purchasing from the manufacturer (as they're the true owner throughout the lease) and not the dealer itself. I usually don't advise LBO's as you're paying sales tax twice on the car, once when new and once again at the end of the lease.
A dealer will most likely take the liberty of marking up your interest rate to make it worth their time and effort, so be cognizant of that too.
When you purchase out your lease, it is the same as buying a used car at that point with the payoff being your vehicle's price; you're simply purchasing from the manufacturer (as they're the true owner throughout the lease) and not the dealer itself. I usually don't advise LBO's as you're paying sales tax twice on the car, once when new and once again at the end of the lease.
A dealer will most likely take the liberty of marking up your interest rate to make it worth their time and effort, so be cognizant of that too.
Agree with most of your points but sales tax. In FL, you only pay tax on the down payment and 1st payment at the start of the lease, not the full price of the car; then on the residual value at the buyout (and of course on each payment during the course of the lease). The down payment at the start is not the total amount paid out-of-pocket but only that portion that goes to reducing the purchase price of the car. Monies paid to TTL fees are not taxed. So sales tax is not paid twice, at least not in FL.
I plan on getting pre-approved for a loan (~50% of the residual) prior to visiting the dealer, to avoid the Finance Dept interest rate games. The big dealers have relationships with the bigger banks so there is always a process for the dealer to use my own pre-approval. I was hoping that the bank could do it all, but I might be wrong. I have a couple of banker and credit union friends who still do vehicle financing and may have some insight into lease buyouts, I need to reach out to those folks.
Florida is always different from other states...
so a lot of the info I found from my research was not entirely applicable, mostly legit but missing the Florida-specific details.
10-08-20, 05:58 AM
#5
Racer
Thread Starter
Many of the fees are negotiable. CA has $85 doc fee limit. I'm not sure in FL or other states. I think you are on the right path by shopping the OTD price for a buyout from different dealers. One of my friends also shopped around and got a great deal and saved some money and got his Benz CPO as well.
You can ask LFS on buying out the lease to see if there's any negotiation on that, I don't really think there is but no harm in asking. I helped one of my friends trade-in his lease vehicle with 4 months left on payments for another car. So he still has to pay that 4 lease months. I dealer give a value covering that 4 months lease payment + residual + extra cash after negotiating. He was able to take advantage of the strong used car values and still made $$$ out of it.
Here's a great video to check out from Kevin Hunter:
You can ask LFS on buying out the lease to see if there's any negotiation on that, I don't really think there is but no harm in asking. I helped one of my friends trade-in his lease vehicle with 4 months left on payments for another car. So he still has to pay that 4 lease months. I dealer give a value covering that 4 months lease payment + residual + extra cash after negotiating. He was able to take advantage of the strong used car values and still made $$$ out of it.
Here's a great video to check out from Kevin Hunter:
I've watched so many of those YouTube videos over the years, especially in 2018, that I thought I was pretty well-informed, but none that I found specifically addressed lease buyouts in FL, or with LFS.
Everything I've read indicates that there's no negotiation on the residual value, dealers talk it up, but it's up to the finance company to determine the payoff, and they don't budge. The dealer can, and sometimes does assist with funds to sweeten the deal on the next purchase, as they did with your friend, but again, the finance companies always want to maximize what's coming to them... no negotiation.
But you did give me an idea to try... a month or two, or three, before the lease ends, I can go shopping and see if any Lexus dealers are willing to deal... really got my heart set on either an L/Certified LS or LC. Thanks.
10-08-20, 06:44 AM
#6
Thanks for the response.
Agree with most of your points but sales tax. In FL, you only pay tax on the down payment and 1st payment at the start of the lease, not the full price of the car; then on the residual value at the buyout (and of course on each payment during the course of the lease). The down payment at the start is not the total amount paid out-of-pocket but only that portion that goes to reducing the purchase price of the car. Monies paid to TTL fees are not taxed. So sales tax is not paid twice, at least not in FL.
Agree with most of your points but sales tax. In FL, you only pay tax on the down payment and 1st payment at the start of the lease, not the full price of the car; then on the residual value at the buyout (and of course on each payment during the course of the lease). The down payment at the start is not the total amount paid out-of-pocket but only that portion that goes to reducing the purchase price of the car. Monies paid to TTL fees are not taxed. So sales tax is not paid twice, at least not in FL.
10-08-20, 07:58 AM
#7
I would call your dealer and call Lexus.
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10-08-20, 10:08 AM
#8
Lexus Champion
I would start with a call to LFS as they can help you to understand the process in your state.
I've only done it once, and I did it through the dealer. It actually wasn't bad at all. I don't recall the specific fees involved, but I made an appointment with my local dealer's finance office. They helped me secure a good bank rate and took care of all of the paperwork. There may be some ways to save some document fees and do more of it on your own, but the dealer finance office was very familiar with the process, local laws, and documentation so for me, I found it worth it. Was very painless and easy.
I've only done it once, and I did it through the dealer. It actually wasn't bad at all. I don't recall the specific fees involved, but I made an appointment with my local dealer's finance office. They helped me secure a good bank rate and took care of all of the paperwork. There may be some ways to save some document fees and do more of it on your own, but the dealer finance office was very familiar with the process, local laws, and documentation so for me, I found it worth it. Was very painless and easy.
10-08-20, 06:34 PM
#9
Racer
Thread Starter
Unfortunately everything I've found states that LFS is essentially hands-off in the process, providing a payoff and referral to a dealer, nothing more.
I should be so lucky to have a painless process, but Florida is notorious for having predatory dealerships. I will consider making an appointment with JM Lexus (no dealer fee dealer) and see if they are transparent about the process and fees.
Thanks for the feedback guys.
I would start with a call to LFS as they can help you to understand the process in your state.
I've only done it once, and I did it through the dealer. It actually wasn't bad at all. I don't recall the specific fees involved, but I made an appointment with my local dealer's finance office. They helped me secure a good bank rate and took care of all of the paperwork. There may be some ways to save some document fees and do more of it on your own, but the dealer finance office was very familiar with the process, local laws, and documentation so for me, I found it worth it. Was very painless and easy.
I've only done it once, and I did it through the dealer. It actually wasn't bad at all. I don't recall the specific fees involved, but I made an appointment with my local dealer's finance office. They helped me secure a good bank rate and took care of all of the paperwork. There may be some ways to save some document fees and do more of it on your own, but the dealer finance office was very familiar with the process, local laws, and documentation so for me, I found it worth it. Was very painless and easy.
Thanks for the feedback guys.
10-09-20, 08:28 PM
#10
Unfortunately everything I've found states that LFS is essentially hands-off in the process, providing a payoff and referral to a dealer, nothing more.
I should be so lucky to have a painless process, but Florida is notorious for having predatory dealerships. I will consider making an appointment with JM Lexus (no dealer fee dealer) and see if they are transparent about the process and fees.
Thanks for the feedback guys.
I should be so lucky to have a painless process, but Florida is notorious for having predatory dealerships. I will consider making an appointment with JM Lexus (no dealer fee dealer) and see if they are transparent about the process and fees.
Thanks for the feedback guys.
Just speak to LFS and they will go over this with you step-by-step.
10-10-20, 03:57 AM
#11
Racer
Thread Starter
Have you done this in Florida? LFS owns a leased vehicle and in order to sell the vehicle to the consumer, must have a dealer's license, which includes having a physical location with signage, staff, etc. I do not believe LFS is licensed, hence the referral to the dealer. I've not done this myself, so only regurgitating what I've read from others' experiences in FL.
Last edited by chinee; 10-10-20 at 04:03 AM.
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ThomasGS4 (10-11-20)
12-31-21, 02:14 PM
#12
Caps on for a reason
12-31-21, 02:38 PM
#13
Racer
Thread Starter
Hey man... no need to shout...Florida just does things differently from other states. In FL only dealers can "sell" cars, finance and leasing companies typically are not licensed to perform this sales transaction. This gives the dealers 2 significant advantages...
1. A fantastic sales referral... someone turning in a leased vehicle makes for a great sales prospect.
2. Dealers get a 2nd bite at charging fees on the lease purchase... that notorious dealer/document fee that FL dealers love, which can be anywhere from $500 to over $1,000.
I used JM Lexus, they always advertise "no dealer fees" and IMO have lived up to their slogan. While I was there, the Lease End Options Mgr was busy with a desk full of deal folders. Understandably, in this market, many lessors found it to be financially feasible to buy their leased vehicles rather than turn them in and pay premium prices for replacement vehicles. In addition to LFS leases, he was also processing Toyota Financial Services Lease buyouts.
Back to my transaction... In addition to the payoff, I was charged a $59 Elec filing fee and about $82 in Tag/Title fees. The Elec filing fee is typically a fee used to recoup some of their costs in preparing the paperwork, $59 is more than acceptable.
The only other dealer I am aware of that does not charge dealer fees is Earl Stewart Toyota... they advertise one price, no haggle pricing, what you see on the website is what you pay.
I hope this is helpful to other Florida lessors out there.
1. A fantastic sales referral... someone turning in a leased vehicle makes for a great sales prospect.
2. Dealers get a 2nd bite at charging fees on the lease purchase... that notorious dealer/document fee that FL dealers love, which can be anywhere from $500 to over $1,000.
I used JM Lexus, they always advertise "no dealer fees" and IMO have lived up to their slogan. While I was there, the Lease End Options Mgr was busy with a desk full of deal folders. Understandably, in this market, many lessors found it to be financially feasible to buy their leased vehicles rather than turn them in and pay premium prices for replacement vehicles. In addition to LFS leases, he was also processing Toyota Financial Services Lease buyouts.
Back to my transaction... In addition to the payoff, I was charged a $59 Elec filing fee and about $82 in Tag/Title fees. The Elec filing fee is typically a fee used to recoup some of their costs in preparing the paperwork, $59 is more than acceptable.
The only other dealer I am aware of that does not charge dealer fees is Earl Stewart Toyota... they advertise one price, no haggle pricing, what you see on the website is what you pay.
I hope this is helpful to other Florida lessors out there.
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RetireeZ (03-25-22)
12-31-21, 05:07 PM
#14
Anyways, the dealership fees were not that bad when I did it, I think it was $400 if I remember correctly? taxes and tag and all that, no way out of it of course... I ended getting the extended warranty on the car too. All in all, it was a quick in and out deal doing it at the dealership.
12-31-21, 06:27 PM
#15
Lexus Test Driver
Hey man... no need to shout...Florida just does things differently from other states. In FL only dealers can "sell" cars, finance and leasing companies typically are not licensed to perform this sales transaction. This gives the dealers 2 significant advantages...
1. A fantastic sales referral... someone turning in a leased vehicle makes for a great sales prospect.
2. Dealers get a 2nd bite at charging fees on the lease purchase... that notorious dealer/document fee that FL dealers love, which can be anywhere from $500 to over $1,000.
I used JM Lexus, they always advertise "no dealer fees" and IMO have lived up to their slogan. While I was there, the Lease End Options Mgr was busy with a desk full of deal folders. Understandably, in this market, many lessors found it to be financially feasible to buy their leased vehicles rather than turn them in and pay premium prices for replacement vehicles. In addition to LFS leases, he was also processing Toyota Financial Services Lease buyouts.
Back to my transaction... In addition to the payoff, I was charged a $59 Elec filing fee and about $82 in Tag/Title fees. The Elec filing fee is typically a fee used to recoup some of their costs in preparing the paperwork, $59 is more than acceptable.
The only other dealer I am aware of that does not charge dealer fees is Earl Stewart Toyota... they advertise one price, no haggle pricing, what you see on the website is what you pay.
I hope this is helpful to other Florida lessors out there.
1. A fantastic sales referral... someone turning in a leased vehicle makes for a great sales prospect.
2. Dealers get a 2nd bite at charging fees on the lease purchase... that notorious dealer/document fee that FL dealers love, which can be anywhere from $500 to over $1,000.
I used JM Lexus, they always advertise "no dealer fees" and IMO have lived up to their slogan. While I was there, the Lease End Options Mgr was busy with a desk full of deal folders. Understandably, in this market, many lessors found it to be financially feasible to buy their leased vehicles rather than turn them in and pay premium prices for replacement vehicles. In addition to LFS leases, he was also processing Toyota Financial Services Lease buyouts.
Back to my transaction... In addition to the payoff, I was charged a $59 Elec filing fee and about $82 in Tag/Title fees. The Elec filing fee is typically a fee used to recoup some of their costs in preparing the paperwork, $59 is more than acceptable.
The only other dealer I am aware of that does not charge dealer fees is Earl Stewart Toyota... they advertise one price, no haggle pricing, what you see on the website is what you pay.
I hope this is helpful to other Florida lessors out there.
I really like this car and there is no way I'm going to ES. Other cars don't really interest me either. It doesn't matter if the GS never wins any races but damn I really like this thing!
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JeffKeryk (01-01-22)