So... leasing a car is pretty much renting the car with an option to purchase a the end of the period. My lease was for 2 years.
However, there were some unforeseen issues.
When we got the Camry, it was around 2 months into our stay in Houston.
My wife's contract in the US is for 2 years. Furthermore, we are planning/hoping to go back to SG in Dec 2021.
The lease contract ends in March 2022.
I'm contractually obligated to complete my lease regardless.
I was paying US$359.99 per month to lease the Camry.
If I leave in Dec, I would have to pay another 3 months worth of lease which I would not be utilizing.
Furthermore, there is also a "listing" fee of US$350 which the leasing company imposes for returning the vehicle. It's for their "effort" to sell the car after you've returned it.
So if we leave in Dec, we'll probably need to pay around $1,430. (US$360 x 3 +US$350)
Just to close out the lease contract.
Of course there's the option of just running away and just refuse to pay for the lease breakage, but... we're not going that path.
So, the above situation was pretty much unfavourable cos... well we don't have much of a choice cos it's a contract for 2 years. (From what we know, 2 years is the shortest lease contract for a vehicle.)
We had already renewed our apartment rental to end in Nov so that we would have more flexibility to plan to return to SG in Dec.
But the car was a 2 year contract and we were pretty much stuck with it.
Or so we thought...
By some stroke of chance, my wife received an email by the another department of the dealer who leased us the car, offering to buy the car.
The thing about leasing a car is that we can return the car after the contract.
OR we can choose to buy the car at any time, by paying up all the future lease payments PLUS a pre-stated cost of the car. This amount is fixed on the day we signed the lease.
When I saw the email, I was dismissive. Cos... everyone knows that this would be a loss making move.
No one is going to be willing to help pay for all my future lease payments AND the buy out price of the car AND give me extra money on top of it.
I mean... that's expected right? Who expects to make money after buying a new car? It's well known that new cars are a loss once driven out of the dealership.
So I told my wife not to waste her time, cos there's no real point to sell the car and get another car and need to take the loss now.
Might as well just wait til end of the year and pay it off when we leave.
But my wife had nothing better to do and, to her, it was no loss so she just asked me to leave her alone and she was going to try to get a quote from them anyway. Which is fine by me. I mean... she's just wasting her own time right?
So she filled up the online form, which asks when we bought the car, how much mileage is on the car, the overall condition of the car, etc... The car is pretty much in perfect condition. We didn't drive it much cos... well COVID, so I didn't even send my wife to work daily, and the interior of the car is in immaculate condition.
And the next day, she got a reply from a representative.
Somehow... the amount quoted, was enough to pay off all our future lease payments PLUS the buyout amount and then some...
Yes... we managed to turn a "profit" for the leased vehicle.
I'm not saying we turned a profit on the lease overall. We still leased the vehicle for over a year and that expense is gone.
This "profit" is just that we are able to get back some money in cash at this point in time, even after all the future lease payments are paid off and the buyout is paid for. AND the buying company will handle all the paperwork and administration, and contact the leasing company, etc. We just need to agree and sign the papers and we would receive a cheque for the excess amount.
I was pretty mindblown.
Ok, I now suspect that it's cos of the supposed chip shortage which has been going around, and due to this chip shortage, there will generally be less stuff being available for sale in the coming months before the chip production ramps up to cover for the shortfall.
Unconfirmed, it's just my suspicion.
Anyway... who cares why right? If someone wants to buy out my car and I get some cash for it...
And the amount is enough to buy an old car, then basically, my vehicle expense for the next few months would be settled AND I wouldn't need to incur a loss when I leave.
I was pretty excited about it. And my wife told me not to ganjiong, cos she since this company was willing to buy us out at this price, then maybe we could get better quotes. So she went to submit our car details to a few more companies.
And... woah... one company actually was willing to pay even higher.
So we decided to proceed with this plan.
We would sell the existing car and use the cash proceeds to get ourselves an old beat up car which will last us til the end of the year, hopefully without any major issues.
This beat up car, typically called a "beater car" in the US, would be fully paid up and we would not need to pay US$360 every month anymore. Also, we save on insurance, cos... well it's an older car and since it's not leased, we can take a lower coverage. Leased vehicles have some requirements by the leasing company, so we needed to take up some higher coverage.
And over the weekend, we got ourselves an old high mileage Nissan Maxima. It's a bigger car than the Camry, with a 3-litre V6 engine. It is old and dirty and beat up, and inside was dirty, etc...
Unfortunately, I overpaid for this vehicle, cos I was lazy, inexperienced, and didn't do enough research and mentally not prepared to haggle, and a lot of other reasons.
It was just really poorly executed.
But it was still pretty much within budget.
So the objective was met. We managed to sell the Camry and using the proceeds, we paid off for an old car.
However, we could have done better as we could have had money leftover to cover repairs, if we were better prepared for the buying process.
We ended up having to pay an extra US$113 out of pocket.
(This also includes new cheap covers and steering wheel covers, which were needed, cos the seats were dirty and steering wheel sticky, and Uber costs to get between the buying and selling locations, and cleaning material and anti-bacterial wipes & spray. I've deemed these as capital expense as part of the buying of the beater car.)
So previously, I would need to pay US$360 for the lease payments, plus $156 per month for insurance. And when I leave in Dec, I would need to pay another lump sum of US$1,430.
Now, every month, I just need to pay around US$59 for insurance and maybe an oil change in a couple of months for US$30, and keep my fingers crossed that there will be no other maintenance required.
Not to mention, I'll also be able to sell this car when I leave for a fraction of the buying cost.
Ok, one thing to note, in SG, we mentally already think cars are expensive. So it seems kinda "wow" that I got a "free" car.
(This was one of the reasons why I failed during the nego, cos I already thought that the price of the car is already very cheap. In SG, car are in the tens of thousands. So I was pretty much a pushover during the nego.)
But in the US, beater cars are cheap. They are really old and worn out.
Imagine the worst old taxi you've ever sat in... and a beater car is worse than that.
There are holes in the seats, the car has dents, scratches, it smells bad, some areas are sticky cos the previous owner ate something or spilt something in the car, etc.
Which is why I needed to get cheap seat covers and steering wheel covers and wet wipes and anti -bacterial spray, to clean up the car.
The pictures are below.
The Toyota was my previous leased car.
And the Nissan is my "new" beater car. The outside is already not so bad, the inside is worse.
Anyway, that's it for now.
I think overall this was a good decision but poorly executed, as we could have gotten a way way way better deal on the purchase of the vehicle.
But what's done is done. And hopefully this vehicle will last me til the end of the year.
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