What’s up hackrs? I need to bounce my strategy off some others to see if I’m missing anything. Here’s the scenario:
My wife and I live in Seattle and have only one car, a 2019 Honda CR-V EX-L that I leased (and posted about here) in May 2019. I had a lease end on my Stelvio during the pandemic and we were working from home so I just turned it in.
We should be able to continue for a bit with one family car, so I’m trying to navigate the unprecedented times (who isn’t sick of that phrase already).
RV on the 2019 is $19,638 and I have two payments of $388 left. Lease expires May 31. With Seattle tax, my buyout is $22.3k right now. I could keep it as our family car but don’t want to output 22k right now. I got quoted about $400/month from USAA at 3.24% for 60 months (!) just to own it.
Seems smarter to capitalize on the equity while it’s here. Got quotes this week from Carvana (25.3k), Carmax (27.9k) and Equityhackr (26.05k). Waiting for Honda of Burien to give me their number tomorrow. May also see if Enterprise or others are still giving offers too.
Assuming I can pay basically MSRP of $39,000 for a 2022 CR-V Hybrid Touring, here is the calculator: 2022 CR-V Hybrid Touring Calcs
This LH score of 6.3 obviously isn’t great but maybe for now it’s all right. If I get a check for about $5k from the 2019, then it makes these new payments feel more like $420 than $560ish.
I guess buying the new hybrid is an option but Honda Finance is 2.9% on 60 months and so even assuming I get $5k equity from the 2019 as the down payment, monthly payments will be at least $660 for 60 months.
Did some looking around at other brands but the bottom line is I want a small but not compact SUV with AWD and I didn’t find clearly superior options.
That’s an assumption, you might have trouble getting that in the PNW.
Why give up the equity, consider them seperate equations. Equity down is money out of your pocket. Also, consider getting buyut quotes from Honda dealers, HFS leases cannot be sold to Carmax, Carvana, etc without you buying the lease out and getting the title/tax paid, which can take months due to DMV delays. Consider getting quotes directly from Honda dealers!
Get a loan quote elsewhere. DCU is still offering rates as low as 1.99% for 65 months, and there is another credit union PCFU from Cali (You can join with a single time donation) doing as low as 1.85% for a 60-month loan.
Try finding a RAV4 Prime at MSRP. Equivalent size, PHEV capability for HOV lanes, and fuel economy, but you will have similar if not greater trouble finding one - plus there is a tax credit to help offset costs.
MSRP - yes may have trouble, in process of quotes now. Seattle Honda doesn’t mark up MSRP. Klein in Everett or the Lynnwood Honda may also keep it around MSRP. Have to navigate annoying attempts for dealer add-ons with Bellevue Honda and Burien.
Maybe I didn’t word the equity part right. I’m not putting the 2019 vehicle equity back into a lease. I’m keeping it and in my head I get to think it makes my monthly lease payment lower by about $140 a month. However, if I did buy a new Hybrid then I would use all the equity as down payment to reduce the monthly as much as possible.
Yes I’m aware of the buyout restrictions, didn’t think about delay time from DMV so thanks for reminder. I don’t really want to buy it out myself and then flip it afterwards anyways. Would like to get a competitive offer from Honda dealers. Trying to query them now without actually going into every single one so they can “evaluate” my 2019.
Thanks for heads-up about DCU and PCFU, will look them up! That could be worthwhile.
My wife likes RAV4 but I honestly thought it would be worse than shopping these CR-Vs. Will do a little looking now. Tax credit in Washington state on the Prime? Interesting.
Federal tax credit of 7500 (need the tax income to utilize this) and any state tax credits for PHEVs
Understood, I just wanted to make clear, that equity is money, and using it as down payment is the same as taking money out of your pocket. Make sure to think of the two transactions as separate and maximize both (get the lowest price for your new car, and the highest price for your old lease!)
Another item - are these manufacturer “special offers” ever really good? One dealer passed this back to me for a lease special: Lease Offer #2: New 2022 Honda CR-V Hybrid Touring AWD CVT Featured Special Lease $469 per month for 36 months**** $1,999 Due at signing includes down payments with no security deposit. Excludes taxes, titles, and dealer fees. For well-qualified lessees. Closed-end lease for New 2022 Honda CR-V Hybrid Touring AWD CVT (5J6RT6H97NL019164) available from 03/18/2022, through 03/31/2022, to well-qualified lessees approved by Honda Financial Services. Not all lessees will qualify. Higher lease rates apply for lessees with lower credit ratings.
MSRP $38625 (includes destination, excludes tax, license, title, registration, documentation fees, options, insurance, and the like). Actual net capitalized cost $38,249.25. Net capitalized cost includes a $595 acquisition fee. Dealer contribution may vary and could affect actual lease payment. Total monthly payments $16,884.00. Option to purchase at lease end $24,270.00 . Must take new retail delivery on vehicle from dealer stock by 03/31/2022. Lessee responsible for maintenance, excessive wear/tear and 15¢/mile over 10000 miles/year for vehicles with MSRP less than $30,000, and 20¢/mile over 10000 miles/year for vehicles with MSRP of $30,000 or more. See your Honda dealer for complete details.
I can’t figure out how to get this into the calculator. By “down payment” of $1,999 - does this actually include the first month payment plus tax? In other words, is this a drive-off amount? Or a true down payment (which none of us do on a lease, right?).
The $1999 is usually cap cost reduction + acquisition fee, but does not include doc fee, registration, tax etc. In Seattle assume $150 for doc fee, $600 for registration, and probably $200 in taxes for the cap reduction. So a total of $3k OOP and $469/month before tax.
Pre-COVID, these “specials” were generally easy to beat. They generally included less discount from MSRP than a good hacker or broker could get. Nowadays, when you might have to pay MSRP, or more, the specials might not be as bad.
Ok that checks out as almost exactly matching the calculator I already had set up if I had checked the box for zero drive-off. Yes it’s a lot for a CR-V. Still not sure where a better deal lies right now.
Maybe there are other options if I start exploring that $7.5k tax credit for a plug in.
Buy your Honda, get on a list for a Rav4 Prime at MSRP. That is my advice. You also have a partial* State sales tax exemption on a purchase, plus the federal 7500 tax credit.
Thanks - this seems to line up with my initial thought and what the calculator shows. I do recall those weren’t super great prior to pandemic but now it basically matches paying MSRP and using the current HFS rate of 0.0015 MF.
As long as MSRP including destination is less than $45k, you get up to $20k of your sale price excluded from sales tax. Just to clarify since it’s not a free pass.
I have read that Toyota is expected to hit the 200,000 EV sales threshold this quarter, so the credit will drop by half starting July 1. I suspect it will be difficult to get a RAV4 Prime at MSRP before July 1.
A RAV4 Prime at MSRP would be a solid buy with the rebate. Assuming you can nab it before the rebate drops. Big If.
Another option if you’re open to full electric could potentially be a base VW ID.4 - would qualify for the $7500 rebate and if you stay light on options would get you a sales tax exemption.
In both cases lease rates aren’t great, so it would be a buy and claim the rebate in your return.
Very true. Never say die though - and maybe OP can even try to get one of the few Prius primes that Jim has had trickling in. He sold a few at 1k over sticker, plus the 2k in shipping with rebates he’d still come out ahead of anything else - minus the SUV requirement.
