Dealer Markups, Two Names on the Title, and Is My Rate Any Good?

0:00 Hey everybody, welcome to Keys or Keep. I'm Joe, managing director at Champion Auto Finance. This is the show where we take your lease-end questions and work through the one decision that matters: hand back the keys, or keep the car.

0:13 Quick note before we start. The questions on this show are based on the kinds of questions people ask us. Names and details are changed. And nothing here is legal or tax advice. Your contract and your state's rules always win.

0:24 Three questions today. Let's get into it.

0:28 We got a question from Ben in Colorado. He says, Joe, I called the dealership about buying my lease, and they gave me a price that's about two thousand dollars higher than the payoff my leasing company gave me. Which one is real?

0:42 Ben, great catch, and you did exactly the right thing by getting both numbers.

0:47 Here's what's usually going on. Your leasing company's payoff quote is the amount they need to release the car. When you buy through a dealership, the dealer may add its own fees, or bundle in products like service contracts or protection packages. Some of those charges are legitimate. Some are optional. And some are just extra profit.

1:05 So here's the move. Ask the dealer for a full itemized breakdown, every line. Then put it next to the leasing company's payoff quote and go line by line. Anything that isn't on the leasing company's quote, ask what it is and whether it's required.

1:19 Next, ask your leasing company directly whether you can buy the car from them without going through a dealer, and whether you can use your own financing. Rules vary by leasing company, and they can change, so get the answer from the source.

1:32 If you do end up going through a dealer, you can still decline optional add-ons. You're allowed to say no. A required fee and an optional product are not the same thing, and the paperwork should make the difference clear.

1:45 Ben, two thousand dollars is real money. Don't sign until every dollar of that difference is explained.

1:52 Next up, Lauren in Massachusetts. She says, Joe, the lease is in my name only, but my husband and I want to buy it out together and put both of our names on the title. Can we do that?

2:03 Lauren, often yes, but there are two different questions hiding in there, and it helps to separate them.

2:09 Question one is the title. That's about who owns the car. Question two is the loan, if you're financing. That's about who's responsible for paying.

2:18 On the title, many states let you title a car in two names. How the names are listed can matter, so ask your state's motor vehicle office what options they have and what each one means.

2:29 On the loan, your lender decides whose names go on it. If both of you apply, the lender will usually look at both of your credit histories and incomes. That can help, or not, depending on your situations. And both of you would be responsible for the full loan, not half each.

2:44 Then, the leasing company. Since the lease is only in your name, ask them how they handle a buyout when a second person is joining. Some may need the purchase to start in your name. Ask what paperwork they need from both of you.

2:57 And one practical tip. Once the car is in both names, update your insurance so it matches.

3:04 Last question. This is from Chris in Washington. He says, Joe, is a lease buyout loan basically the same as a used car loan? And how do I know if the rate I'm getting is any good?

3:14 Chris, short answer, a lot of lenders treat a lease buyout a lot like buying a used car. You're buying a specific used vehicle at a set price. But the details depend on the lender, so ask how they classify it.

3:26 As for rates, there's no single right number. Your rate usually depends on your credit, the length of the loan, the age and mileage of the car, how much you're borrowing compared with what the car is worth, and the lender's own pricing that week.

3:40 So how do you know if an offer is good? Compare. Get more than one offer if you can, and compare them the right way. Look at the annual percentage rate, the length of the loan, and the total amount you'll pay over the life of the loan. Not just the monthly payment.

3:54 Here's why that matters. A longer loan lowers your payment, but you'll usually pay more interest overall. And on an older car, a very long loan can leave you owing more than the car is worth for a while.

4:05 One more tip, Chris. Check whether the loan has any fees, and whether you can pay it off early without a penalty. Read the paperwork before you sign.

4:14 Alright, let's wrap it up. Three takeaways.

4:17 One, if a dealer's buyout price is higher than your leasing company's payoff, get it itemized and make them explain every line.

4:25 Two, the title and the loan are separate questions. Ask the motor vehicle office about the title and the lender about the loan.

4:34 Three, judge a loan by its rate, its length and its total cost, not just the monthly payment.

4:40 If you've got a lease-end question, send it in at lease end live dot com, and it might end up on the show.

4:47 Champion Auto Finance helps arrange financing for drivers buying out their lease, nationwide. We are not a lender, and approvals and terms are subject to lender underwriting.

4:58 That's Keys or Keep. I'm Joe. Thanks for listening, and I'll talk to you next time.