Mr. R's car lease is up in May. I thought it was up in March so we've already been contemplating this question for a while. Turns our the lease was for 39 months, not 36.
I love leasing at the beginning. Getting a brand new car under warranty for only $200 per month. Awesome! But it always sucks when the lease is up and we don't have a car to trade in towards our next car.
The car we have right now is a 2012 Chevy Malibu. Overall it's been a great car. We barely put miles on our cars since we live so close to work and family. The Malibu has just under 13,000 miles on it right now. We've never had to fix anything on it until now but it is under warranty anyways. Mr. R has an appointment to get the spray things fixed that spray the windshield washer fluid. For some reason it hasn't been spraying for a while now. A real pain in the winter when dirty slush is everywhere. There's also a recalled part that needs to be replaced. And now one of the tires keeps getting low on air. Hopefully it can be patched although I've never taken a tire in to get fixed that a patch was able to repair it. I always end up having to replace the tire. Hopefully this will be the first time a patch will work?
I can tell Mr. R wants a different car. But I think we should buy out the lease. We don't want to spend a couple thousand dollars right now to enter into a new lease. So instead of leasing again, Mr. R wants to buy a used car. I don't mind putting money down on a car that we will own, I just don't want to pay a down payment on a car that we are basically borrowing.
I checked out our lease agreement and to buy out our lease is $10,400. The car is still under warranty, only a couple years old, in great condition and has less than 13,000 miles on it. I don't think we could get a better used car for that amount of money.
I looked up the blue book value and to purchase this car in this condition from a dealership would be around $13,000. The trade in value if we actually owned this car is $10,800. That's more than our buy out. Financially, I think it makes sense to buy out the lease.
We'll have to have a few more discussions about this before our lease is up in May. If Mr. R strongly feels that he would rather have a different car, as long as our payments are about the same, I guess I'll leave that decision up to him. But I'll due my best to get him to really take a look at the numbers and benefits of keeping this car.
I can get a loan from our credit union with 3.25% interest. Not sure how many months we can get the loan for but if we could get a 60 month loan and put down $1500 up front then our payments will drop from $205 per month right now for the lease, down to about $160 per month. The goal would be to pay it off quicker if possible but I like the idea of keeping the payments as low as possible.