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This option is such that I would buy the car outright at lease expiration, then use if for trade in on a new lease?

I am assuming the value would be used toward lease initiation costs including paydown (ie, they wouldnt cut me a check, right?)...

This is a fascinating option. Really hadnt considered it. I wonder if there is a way to ensure the new dealer will set up a deal guaranteeing the trade in value...

Yes, you would buy the car (ideally directly from the lender) and turn around to use it as a trade-in. Your sales tax should be less than the disposition fee, so it really seems like a no-brainier.

One thing that should be obvious by now is that there is no "getting out of a lease early." Whether you buy out the lease or you make a dealer do it for you, you end up paying for the full lease term. So any option that involves getting a new car sooner than 8 months from now means you are paying two lease payments for a short period of time. This is another good reason to do the buyout at lease-end. You then have time to shop, otherwise your timing window is very narrow.

In terms of a trade-in...I'm not sure if they can cut you a check. I think by applying it against the car, you end up saving on sales tax (at least in MN you do). I'd use the trade-in against the lease, and try to minimize any cash out-of-pocket.

The best way to guarantee yourself a fair price is to get a quote from Carmax (hopefully there is one near you). If you take the car into a dealer looking for a guaranteed trade-in, they are just going to pressure you into letting them handle everything for you (out of sight, out of mind). Now this is more convenient, but you will certainly pay for this convenience. For some, I'm sure the time saved is worth it, and that's OK just so long as you understand what you are paying for.
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