Sorry I missed that! I’ll try it in the next 3-6 months after we determine we love the car. This is an awesome way to buy!
Hello,
Same thing happened with my dealer as well. They insisted me do buy out after 3 months but I completed the buy out through credit union before 1st month. will the dealer charge me back anything ? I dont see anything mentioned in the contract.
Also, do you happen to know how the registration can be done? Since Credit union paid off, I assume they will own the title. If they own, then what documents I need to produce to DMV for re-registering?
Will Acura be sending any documents through which I can register the vehicle? I did speak wit AFS, but they are not aware of the process and said it might take upto 4 weeks to get title. So, till then I can’t register ?
I am searching to find right answer. Thanks!
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Thanks OP for this thread.
I was looking into doing something similar and realized this does not work in states(like VA) that charge full sales tax upfront. We pay full 4.15% sales tax during signup and then taxed again while transferring the title post payoff, essentially double taxed.
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Can someone please confirm the payoff amount is the Adjusted Capitalized Cost minus amortized depreciation??
Super interested to find if this stuff works!!!
2019 MDX AWD Base - 36 month lease
Gross Capitalized Cost = $34867.47
Cash Pmt - $7359.25
Adjusted Capitalized Cost = $29636.72
Residual Value = $26012
Rent = $5,168.52 / 36 = $143.57 per Month
Depreciation = $3624.57 / 36 = $100.68 per month
Total = $244.25
Payments made 9/28, 10/28, 11/28
Total Depreciation = $302.04
Payoff should be equal to : (Adjusted Capitalized Cost $29,636.72 - Total Depreciation $302.04) + (.25 x $244.25)
Total Payoff = $29,395.74
Fingers crossed this works!!! 25% off
If it’s worst case and I have to pay Residual + Total remaining payments - then I paid just under $42K which is not exactly a screaming deal - but not horrible either.
Did you pay it off then and it worked as you stated?
On a CEL which I am 100% certain what you have with AFS, you will not be paying the entire remaining payments of 33 months if you are buying out of the lease now, after making your 3rd payment!
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Yes i did. So far good. Waiting for title from AFS.
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I am new to leasing but find this topic very interesting. Could one deflate the capital cost further by asking for a higher MF if the intention is to immediately purchase the car?
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Nope. I did it less than 30 days.
I’ve wondered this same thing - it would be nice if a dealer would chime in on this. The understanding would need to be waiting until 3rd payment in this case I would guess, otherwise they’d get charged back from finance company.
Stop everything with this MDX lease/buyout plan of yours and take some time to learn how all the components of a lease come together. Go back and read the leasing 101 section on the main site a few times, work through generating pricing, etc. Trying to do what you’re suggesting without knowing even the basics of a lease is going to end up costing you a ton of money.
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Aren’t you suggesting the same thing I am?
You will need to hit Leasing 101 educational thread to learn the acronyms being constantly thrown around but FYI a a quick reference guide:
CEL = Close End Lease
MF = Money Factor
RV = Residual Value
MSD = Multiple Security Deposit (Acura / Honda does not implement in their leases)
DAS: Due At Signing
Yes. My above post was supposed to be in reply to William asking what MF meant, not to you.
Well that’s too late - but a ton of other people have messaged me to say that my strategy works. I will post again when I have title in hand and share any hard lessons I may have yet to learn.
I don’t think that there is any inherent issue in your plan. On a vehicle where the lease incentives are significantly larger than the purchase incentives, this makes sense.
The issue is more on the lease side of the equation. You’re asking the most basic questions about the components of a lease. It’s like getting a loan and saying “what is interest?” That’s a recipe for disaster. The only way to reliably get a good deal is to be very well educated on all parts of the lease. Otherwise you’re rolling the dice and hoping they land on your number.
A sound strategy! I think they make it intentionally opaque though - like reading a financial statement from a large bank. The lease I signed didn’t contain the words “Close End Lease”, “Money Factor” or Multiple Security Deposit…
Pay off is same as selling price i signed for. I have put in my previous post exact amount. I dint put anything down except first month and dmv fee
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Long story short?
Could it be done? Yes.
Will it be done? No.
Long story long?
That is, if the dealer knows what your intentions are, they would be dumb to do it. The dealers makes additional profit by marking up the money factory. Which is how they could justify giving you and additional discount. However, as noted the dealer can get charged back if the loan is paid off within a certain time (typically 60 or 90 days). They would end up losing money on the agreement.
If the dealer doesn’t know that you plan to payoff, you are burning them by doing so (I know some people are okay with this). If the dealer does know, they would have to trust that you would not pay it off until after the cutoff period. If I were a dealer, I wouldn’t trust a customer as far as I could throw them. People get greedy and they would payoff immediately. Dealer again loses.
Here are some details on my 2019 MDX FWD base:
I’m also in a situation where I’m trying to decide whether to payoff and keep the car or continue with the lease. If I payoff, I would have to refinance $35k with APR ~ 3.5% which would cost me ~ $3,200 extra over 60 months. Currently with this lease I would pay $4,685.67 as my rent charges.
I think I could save ~ 2k if I payoff right now. However it would come with all ownership headache. Hope this helps.
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