I understand the temptation to buy a car that you have grown to be fond of (I am assuming that is the case otherwise why would you consider this?) for the last 3 years or so. But it is not a good idea and let me tell you why:

First of all, let's assume that the mileage is low (because if it is high, i.e., more than 45,000+ then it's automatic). You can buy this car from Volvo and although the residual value stated on your lease contract is artificially high, they will lower it to a certain degree. Actually, they may lower it "significantly" and tell you "we are saving you a couple of thousands of dollars". Don't fall for that as this is the first clue why you should not buy the car. Eventhough they will lower the buyout figure, it will still be a pretty high number based on what the car can do in the market (otherwise they would not sell it to you for this price). Second, you are going to pay sales tax on the price that they quote you. That can be anywhere from 2.75% to 8.75%, depending what state you are going to register the car. They may offer you a pretty low APR for the upcoming loan but so what? You are going to be buying a used car which will be on the verge of having its warranty expire (even if you are a year away). Sure, you can certify the car if you buy it through your Volvo Retailer and your warranty will be extended for another 2 years and/or 50,000 miles. But think about what you are going to pay; I assume you are going to pay at least $21,000 (plus any incurring finance costs)...You are probably going to take a 3 or 4-year loan (you take a 5-yr. loan and you are..."done") which will increase your purchase price quite a bit if you add the finance costs (don't forget your state tax!). So, what are you going to have 3 or 4 years down the road, when you just paid off the 2nd loan? A used car, with no warranty and a questionable value since it will be at least 7 years old.

If the current lease rates were absolutely abhorring, then it may make sense to entertain the idea. But that is not the case.

Right now, Volvo has a "loyalty rebate" for current Volvo owners plus lease rates that approach about 2% to 2.5%. That's a heck of good rate and there are good deals on 2002 S80s (plus the 2002 models have some pretty valuable upgrades when it comes to comparing them with MY1999 and MY2000 S80s). And if you have some handy cash, pay up to your last 9 payments of the new lease and Volvo Finance will lower the APR to about 0.3%! If you calculate the amount that you are going to front to them (your last 9 payments on a 39- or 42-month lease) and then divide it by the term you lease, you will see that the return for your money will approach at least 12% to 14%! That's a heck of a deal and a return for an investment that bears absolutely no risk! No stock market where your money can evaporate.

Ask one of the sales people at your local Volvo Retailer and they can show you in greater detail what I am talking about. Why buy a car that Volvo Finance want to TOTALLY get rid of? Why buy a car that another company does not want?

Best of luck!

Yannis
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2001 V70 T-5M SR, Classic Red/Graphite Lthr., ipd ME7 ECU Upgrade, K&N Air Filter, Cold Weather, Dolby Surr. Sound, Rear Spoiler, 17' 'Tethys' alloys