In New York. My 36 month lease on a 2018 Honday Civic Hatchback Sport ends beginning of February. Have used low amount of miles allotted (17k of 36k). I do need another car.
Payoff 14.1k. Did a quick look in Carvana (need to try others) and they offered 19.5k.
What are my best options and things to look out for when making sense of my situation?
Can I extend my lease (just keep paying known smallish payment and kick the cab down the road)?
I saw Honda does not allow 3rd party buyout / transfer so I could buy myself. Do I need to pay tax on this?
Better to finance the payoff? Or pay cash? How to start this process?
Sorry if some of these are obvious. Not experienced here.
Is that the rv on your contract or the payoff on the Honda finance portal?
I recently bought out my Honda lease. Was able to do everything on the Honda financial portal and the amount listed included sales tax. That may vary by state though.
A number of different issues. Is there an exception to no third party buyouts for Honda dealers, I have no idea. I would visit some Honda dealers, see who has inventory in the car you want online before you go. Again, I have no idea if there is an exception to the no third party buyouts for Honda dealers, research and check on that. You can call the 800 number for your lease servicer but you may want to get the buyout numbers in writing if they say you can sell it to a Honda dealer.
As to whether it is worth it to trade on the equity to lease new that also depends on a lot of assumptions. Assuming you could actually get a Honda or Acura dealer (both are owned by Honda but double check if an Acura dealer can buy it out, not sure) to pay for your equity, then assuming you could get the whole $5000 (which I doubt but you can try), then that is the equivalent of $150 a month toward the price of new car (every $1000 a month that you do or do not put down changes the payment approximately $30 a month on a 36 month lease), since new lower end civics are currently advertised at $300 a month (crazy) your new lease may be $300 - $150 = $150 plus tax, title, and bank fee, assuming the dealer can and is willing to buy your old car and they have the new car in stock and available https://www.huntingtonhondacars.com/5-day-only-sale.htm. As was noted below, that is however a lot of equity to put down and would be lost if something were to happen to the new car shortly after you got it (totaled or stolen).
You may also want to look into how much it would cost to buy a new car instead of leasing since you do not drive a lot or next time either get a lower mileage lease or consider whether buying makes sense since you used up such a small number of miles. Normally on lease termination you do not get a prize for not using all your miles (now is the exception since lower miles means a higher Carvana offer). I guess the question I would ask myself is why am I leasing in the first place? Do I want a new car because I want the latest upgrades? Or because I do not want to deal with a car once the warranty is over, cannot afford to finance or buy the car outright , or is there some other reason?
If you decide to buy the current car to keep and drive, which is something only you can decide if it is worth it to you, instead of buying new, yes you will need to pay tax on the $14.1 at 8.75% (if you are in NYC) and whether you should pay cash or finance depends on what rate you are offered and whether you have the money to buy it outright, no one can tell you that except your accountant.
You can usually extend your lease, you would need to talk it over with the 800 number lease servicer ahead of time to see what your options are. Note your car would no longer be on the bumper to bumper warranty after 36 months and if something major goes wrong you would be paying to fix it unless you have an extended warranty
That is good advice, if you total the car or it is stolen you lose all that equity, which is the reason I limit my upfront payments to DMV and taxes whenever possible (always make sure the taxes are designated as taxes and not simply as cap cost reductions). In my state I am told (although never had the experience) that you get a refund of any unused taxes that you prepaid however every state is different in how and when it charges taxes and whether those are refundable in the event the car is totaled or stolen before the end of the lease. That is something your insurance company may be able to tell you
