Buyout ending Acura MDX lease or lease new model?

Ask the Hackrs
1

Hi all,

New user here - first time posting, but I’ve leased 3 cars before (2 of them below the 1% MSRP rule) so I have a decent understanding of the leasing and negotiation process. Currently, I have a 2014 MDX lease ending in about 2 weeks and I am looking to either buy it out or replace it with another SUV.

I am located in Texas so that affects taxes (6.25% on whole cost of vehicle).

Here is my dilemma:

I have looked at a number of SUVs to lease next. Long story short, I think my family has settled on the 2017 MDX to be the best option. For the longer story, I will post my notes at the bottom of this post.

From my negotiations, I have brought my Acura dealer down to the following:

2017 Acura MDX w/ Tech Package
MSRP: 49,300
Negotiated price: 45250
1000 Lease Cash
Selling price: 44250
Fees: 925
MF: .00094
Tax: 6.25%
36 mo. 10k miles.
Payment: $573.01/mo.

I believe I could possibly get them down to 44500 selling price pre-lease cash (43500 after) resulting in a payment of $550.12 and a final 3 year total cost of lease of $20,729.

Now, my current 2014 MDX has a buyout value of $28,001. With only 28k miles after 3 years, it has a market value of 30-34k depending on your sources, but I’m getting trade in values of only 28.5k and private selling hassle is probably not worth the extra $500-1000 I could earn.

So, adding in 6.25% tax and a dealer admin fee, this brings the total buyout cost to about $30,600. Assuming that I will keep this car for another 3 years and then sell it, here’s how my numbers play out at a 60 month 1.99% financing Acura Financial can give me:

Monthly payment: 536.22
Total paid after 36 mo: 19,303.92
Remaining principal to be paid off: 12,606.20
Selling price in 2020 (using 6 year old, 2011 MDXs as proxies): ~$18,000

Total net cost for 3 years of keeping my 2014 MDX: $13,910.12. Assuming new brakes, etc. will be needed, let’s round this figure up for an extremely conservative $15,000 cost of ownership.

HERE IS MY DILEMMA: Am I thinking about this the right way? $15,000 to keep my current 2014 MDX which I am happy with for 3 years vs. $20,729 to lease a 2017, which is pretty much the same car besides some slight facelift updates? Am I missing anything or are any of my assumptions wrong? Being someone who is VERY pro-leasing and who had planned to return every single car at the time of lease inception, this just doesn’t feel right… what would you guys do?

Thanks for the help - sorry for the long post!

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Here are my notes on the other SUVs I considered. Please excuse if they are messy, but I figured the rough numbers would be helpful for other SUV shoppers. NOTE: I am not claiming these to be accurate - MSRP discounts are what I’ve seen on forums, and residuals/MF are off edmunds.

Mercedes GLE 62240 MSRP - .00055, 56%, 12% off = 655.52, 10 MSD. 13% off 637/mo

Acura MDX 49300 MSRP - 1k cash, .00094, 59%, 11% msrp = 531.82, no MSD

BMW x5 60695 MSRP - .00146, 58%, 12% off msrp, 7 MSD = 689.36
however if 15% off = 633.74

Volvo XC90 53450 MSRP - .00150; 58%, 8% off from forums, 10 MSD at .00005 each = $675.09

Infiniti QX60 49240 MSRP - 12% off, 58%, .00113, 9 MSD .0001 each = 511.88, 15% off = 467
Infiniti QX80 64845 MSRP - 15% off, 60%, .00190, 9 MSD .0001 each = 645.13

Tahoe, escalade, GMC- family doesn’t want American… no discrimination, just personal preference

Lexus GX 58495 MSRP - 63% and .00100, 9 MSD, 10% off msrp = 566/mo or 21302 total
Lexus RX 53249 MSRP - .00080, $500 lease cash, 61%, 13% off MSRP - 480.49, but did not like the drive

bmw x3 - too small
Porsche Macan - too small
Jaguar F Pace - too small
Toyota Land Cruiser - .0022? 62%, 9 MSD, too expensive of an MSRP
Lexus LX - around 98k msrp, too expensive

Range Rover Sport SE 72912 MSRP - 63%, .00190, 0 MSD, 12% off MSRP = 836 mo. Too expensive

Audi Q5 - too small
Audi Q7 2.0T 55620 MSRP - 8% off MSRP, .00204, 61%, 10 MSD at .00005 each = 705/mo

Cayenne 63% residual, .002 MF, 64k car even if 10% off = monthly is 734.99
Panamera - too expensive

2

I sold a 2012 Acura MDX with Tech Package to a Dallas Carmax dealership back in 2015 when we were done with it. Carmax actually offered almost $3400.00 MORE than any other dealership, including the original Dallas Acura store and two others that I checked with.

Might check with Carmax if you didn’t already. Absolutely loved the MDX, one of our most favorite cars in the 44 years we have been married!

3

Yeah check with Carmax to set your floor, but I would probably keep your current MDX given the low miles on it plus you seem to like it. Do you have to pay sales tax again on the 28k buyout? It’s under full warranty for another year and the powertrain longer. Besides brakes you will probably need another new set of tires.

4

Will check out CarMax tomorrow or day after and report back. Thanks for the advice!

5

Yes, Texas has double taxation which is a bummer - once at lease inception on the FULL value of the car (not just the amount you are leasing), and then once more on the residual value if you plan to buy…

And you are right on the tires. That’s why I rounded my cost of ownership up to $15k.

6

CarMax offered only 27k - so definitely no money to be gained from buying and flipping the car immediately. I guess it comes down to the delta between the lease cost of the 2017 vs. the financing cost of the 2014.

7

Sorry to hear it didn’t work out with the Carmax offer. Just curious, what area of Texas are you in?

8

Houston, TX area! However I’m open to any dealership in Dallas/San Antonio/Austin as well

9

If you like it I would buy it out and keep current MDX. It sounds like it has basically the same equipment as a new one. The tax laws in Texas for leases are not good as you know. Unless you are are writing off the lease payments for business use, it doesn’t make sense to me to lease again and pay full tax again for the same vehicle you can only drive 10k a year. And granted you have to pay tax on the buyout now but at least you own it. You have some flexibility when you own it. You know it’s history. Decent cargo space. You can drive as much or as little as you want and sell it/trade it in whenever if need be. It’s a nice SUV so it should always hold its value well. The only risk, and I’d say a small risk given it’s an Acura with low miles, is being out of warranty in a year but you can buy an extended warranty latter if you want peace of mind.