Lease is over miles - trade in early or pay at the end

Ask the Hackrs
,
1

I am 2 years in to this 3 year / 36,000 mile lease on a 2018 Honda Pilot EX-L AWD. This forum was very helpful in me securing a good deal. (True $0 DAS and $435 includes tax/month). But, I am at the two year mark and have driven 33,000 miles. What is best recommendation…

1 - Sell and try to get as close to my payoff amount as possible before going over 36k miles and losing manufacturers warranty. (One quote was $3,000 under current payoff of $29,338)
OR
2 - Buy the miles at the end (again risking being out of manufacturer warranty and probably have to buy tires) at $.025/mile – I’m probably a 15k miles/year driver so that will be about $3,750
OR
3 - Shop for a new lease now (can be same or different make/model? I just need larger SUV) and hope I hack a great deal with the trade in.

Who has had similar issue? What are the trends now regarding leases? Does it matter if I do this before the end of manufacturer’s warranty or before the end of year? I feel rusty.
Any suggestions on which direction I should focus is greatly appreciated.
FYI I’m in South Florida.

2

Have you tried Vroom to see if they come closer to your payoff?

3

You’re looking at thousands in negative equity currently. How are you planning on hacking a great deal with that weighing you down?

Your best bet currently is to get purchase quotes from multiple places and use that to start to get a better idea of where you’re actually at currently.

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4

Thanks, I will check with Vroom and maybe a few others!

5

Yes, that was wishful thinking. I do believe my best best is to see if I can cut my losses now by selling it. Then, I’ll search for the best large SUV deal with 15k / year miles.

6

I actually just tried ALGO and they were nearly 1k over what vroom offered! and they offered almost 3k over what Carvana said so… Do what you want with my example LOL!

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7

Sell to Vroom et al. or just pay the overage charge. Trading in to the dealer likely means you will pay interest on the negative equity.

8

It also can be worth going to a Honda dealership and seeing what they will give you.

My MDX lease would have been up today. All the online places came in 1K-2k under buyout. The Acura dealership I bought the car bought it back from me at buyout, so saved me the disposition fee plus 150 bucks for a broken fob.

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9

I would wait another 6 to 9 month. It’s most likely you are paying off principal faster then the vehicle is depreciating, especially considering current market conditions, in which case the equity buyout gap will be smaller after more payments. A lot can also happen in that 6 to 9 months, another Corona lockdown, your driving habits could change (etc). It seems like acting now will at best be a wash with waiting, so why act now, unless this whole story is a really a way of justifying wanting a new car… which by all means just do it then and don’t worry about justification.

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10

If it is $3k now or $3750 later plus Dispo and tires, is there really a choice?

Waiting is a gamble. Deals may get better but used car values are trending down and you keep adding miles so your car will Likely be worth less. Could wind up a wash, could get worse, could improve. So take it now or roll the dice? Only you can answer that.

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11

IMO honda keeps value. It was 12 months ago. I had a leased 2016 honda accord, had contract 36/10. Extended my lease for another 6 months. Sold the car to Vroom with ODO at 42k miles. It cost me $90 (negative equity). If i would return it to Honda it would be at least $2500 in fees for overmilage and dispo fee

12

So you when you extended did they give you another 5k mile allowance? Making it 35k total allowance and then you still were over by about 7k?

13

I appreciate all your comments…update…algo offered me a better deal but I’m still $1,500 negative equity including disposition fee. Quite a bit better. But not perfrct. At least I am armed with the knowledge now.

Does anyone know if you go over your lease allowance (in my case 36k miles) and then try to sell privately, is there a huge disadvantage? I figured it would be out of manufacturer’s warranty and/or the option of the new owner buying an extension of that warranty…another value hit?

Or a big issue selling a 2018 in 2020 v 2021 (looks older I guess!)

Thanks again!

14

Thanks for this tip! They came in better for me but not quite the payoff amount! Still, better!

15

Yes, o got another 5k miles for those 6 months and i was still over 7k miles.

16

Selling privately usually means you add sales tax to your cost

17

Yes and no, it depends on the financial service.

18

I actually meant selling to carvana or algo or similar. I used the wrong terminology. I just meant selling as opposed to trading in and/or rolling in to a new lease.

19

Since you are driving +15k/yr, have you considered buying? If you keep this up, the next car will likely have even more negative equity. If not for the COVID boost to used car prices, the offers you have now would be lower.