I’m leasing a 2020 Honda Accord Sport 1.5 CVT (34,000 miles on it) at $325/month that matures next month. I decided that I want to buy out my lease because of the high price of vehicles these days. The residual value is $16,476 (before taxes) and Honda Financial has given me a buyout price of $17,938 (taxes included). The retail value of the vehicle is around $28,000
I went to a Honda dealership today to see how much my interest rate would be if I would purchase/finance the car through the dealership. The Honda Dealership said that the best interest rate they are giving customers with Tier 1 credit is 6.6% (I have 800+ credit score). They then proceed to give a proposal which I have attached to this post.
I wasn’t impressed at the 6.6% interest rate and the total sale price being $23,543.56 ($398.99 a month).
When I scoffed at the offer he said he would eliminate the GAP insurance and give me a discount on the $3500 Warranty bringing the monthly payment down $360-ish. He also said he would try to get me a lower interest rate, but no guarantees. I told them I need a few days to think about it. Do I really need the GAP and warranty anyway?
I guess my other option would be to shop around some other lenders to get a better interest rate and purchase the car without the dealership. The dealership was stressing that going this route will be a gigantic pain in the ass because of all the DMV stuff I would have to do on my own. They said its not worth the headache and would be best to finance with them, even if it costs “a little” more.
What has your guys experience been buying your lease out by bypassing the dealership and using a your own financing?
In my case would you go through the dealership or should I seek independent financing and do it myself? Is it possible to even beat a 6.6% interest rate at this time? Any input is appreciated.
GAP insurance exists to protect you in the event that the value of your car is less than the payoff at the time of a total loss or theft. You’re sitting on 12k in equity at the moment LMAO. The market will correct itself eventually, sure… But do you anticipate a 13k correction any time soon, or over the course of the loan? They are just trying to make a quick buck off of you. Skip the GAP and finance the car yourself. It’s a trip to the DMV. If you are concerned about GAP ask your insurance company about it, they will most likely be happy to offer it to you for pennies on the dollar. If you are concerned about the warranty I’m certain you can do better via a third party.
It’s a pretty ballsy approach for the sales drone to suggest that they are providing some kind of value here. Maybe if you are on the Forbes 500 and your time is worth more than that? They wouldn’t even go for that though.
