First post. Trying to learn a ton about this process.
I plan on leasing a 2017 Pilot Ex-L w/ sensing at 12k/36.
I am currently in a lease on a white 14 civic sedan ex with only 24k miles. I have 2 $300 payments left. To buyout at lease end its $12600, which is at where most of the trade in sites get me. However, as a low mileage CPO, I am seeing $15000-15,800 asking prices. From where I am standing can I use my current lease to help reduce the payments on the pilot?
If I can, then when would I bring up this situation? I’m thinking it is a separate transaction after I agree on selling price of the pilot. Also, what is the process for the dealer on this? Do they have to buy the car? Does the dealer eat the last 2 payments, or do they try and wrap it into my new lease? Isn’t there some allowance Honda dealers get to basically comp a few lease payments?
I don’t know about Honda specifically, but most dealers actually absorb the cost themselves it looks like. So you can go to any dealer of any make with your honda and ask them to pull you ahead.
The way it works is this: you can pay off your lease anytime you want it’s literally like a maxed out credit card that you have to pay minimum payments off over the course of your lease.
What the dealer does is they pay off your remaining balance. Make sure you are prepared to pay the extra lease return fee (disposition fee), damages, and any excess mileage as that’s typically not on the table but it can be.
So your old lease will actually add on to the cost as negative equity and increase the gross cap cost of the Pilot making your monthly payments higher.
As for what to do, with the last lease I negotiated; I surprised the dealer and added my old lease on at the end after they started playing hardball. When they didn’t change the numbers and just agreed to taking care of the old lease payments, I knew I had been got. At this point you can either then accept the deal or take the other lease payments off the table and tell them that you want the same deal with the negative equity removed $600/36 months. So you should then subtract ~$20 from your monthly payments.
You can go to the dealer and see what they’d offer you for the car, and then add any profit to the pilot lease. They’d have to offer you more than the buyout.
Your buyout iseems pretty close to what your Civic would be worth at trade in, I doubt you will profit much from the dealer buying it, but check kbb or a similar site for trade in values for your car.
you’re correct that the dealer would have to buy the car (from the bank). Since the lease is terminated once they buy the car there are no payments for them to “eat”
Thank you all. My last question… I was looking over the lease contract on the civic and the residual at lease end if I want to buy is the 12690. I mentioned above. However, on Honda financials site my payoff amount is 14440 From what I read on here and elsewhere, if I were to buy the car today, it would cost me the 14440 But at lease end it would be the 12, which makes no sense because I have two $300 payments left. If that’s the case then if I go to a Honda dealer and then what price would they be able to purchase the car for? The 14440 or the 12690. Do dealers get to purchase the vehicles at the residual prices early because they are a dealer, or would it be the current payoff?
I just really want to be sure I know what I’m talking about when I approach them about the current lease and what they can buy it for and sell it for.
I think you’re forgetting about the lease disposition fee of $350 + $600 negative equity.
Dealers don’t purchase the car for any sort of scientific number. The car goes to auction and the bank tries to get rid of it for as much as possible. Technically, you can try to get a dealer to follow the car to auction and i hear there are services who do this for a specific % markup.
The current payoff probably includes sales tax. The dealer can purchase it without tax so their price would be the residual plus the sum of remaining payments.
