I work with someone who recently tried to have Honda dealership buy out the lease. The dealership really lowballed him. So he said ok, let me talk to F&I, I’ll buy out the lease with a loan from Honda Financial and then sell it myself. All of a sudden dealership got close enough to market value to close the deal. Granted this was in VA where dealerships have no tax advantage in buy out market.
So I would call the dealers bluff and at least get numbers from the captive lender on buy out. It’s gonna be so much easier to sell to dealership directly and they have a built in advantage of not needing to pay tax.
I’m with Batistuta. You aren’t the one doing the buying, you’re doing the selling. The dealership/Vroom, etc. buying from you likely has a resale exemption so they don’t have to pay tax on what they’re buying just the person who eventually buys it from them would have to.
I do wonder if buried in the 200+ page T&Cs we agreed to that it gives them the right to do this but it just seems shady AF. My lease is up and the buyout is significantly more than the quotes from anybody I received though so I am not going to look in to it at all.
They’re not stopping you from using someone else’s money to buy the car. Their stopping someone else from using someone else’s money to buy the car.
Your lease contract obligates them to sell it to you for a certain price. It doesn’t obligate them to sell their property to someone else because you want them to.
It’s pretty simple, the financial institution has an agreed end of lease buyout/current payoff value with you, not CarMax, Carvana, and the like. End of story. A 3rd party buyer doesn’t have a contract with them, you do.
If you’d like to use Carvana’s money to acquire their asset under the terms you contracted under, get said money first and go for it… Just make sure you pay sales tax and title it in your name as the party that signed on the dotted line.
I currently have 7 months remaining on my 2019 Lexus RX350L and looking to get a new Toyota Highlander. I have remaining balance of $34.5k on my existing lease with Lexus with 28k in miles (had negotiated 15k/yr in miles, so I’m under mileage). I’m wondering if I should wait it out until I get closer to the end of my lease, look to buyout my existing lease and look to resell it myself and take equity to buy/lease new Highlander, or look to see what/if dealership would be willing to do with the existing car and negotiate price of new car.
I currently live in Phila PA, and looking for some suggestions
You can easily get purchase quotes from the likes of.carmax, carvana, etc. That’ll at least give you some idea of where you’ll at. You’re like to find new car prices are as elevated as used car prices though, so expect to pay most, if not all, of that equity towards a replacement.
Any reason you do not like it? I have a 2018 Highlander XLE and would have loved the 350L but did not want to pay up. Looking to lease a new Highlander XLE I am in the grace period. Around 33K miles. I have found that the dealers are not great about buying out the car but Vroom offered me 5800 over the TFS buyout price. The Toyota dealers are not valuing it at anywhere near that. Even the Honda dealer I went to was not too interested in my Highlander, he offered me a decent but unspecatular deal on a Pilot but suggested I take the Vroom deal. However for various reasons I would prefer to deal with the dealers and in suburban NYC it is not going well. I signed a deal last week and the guy (repeat salesman) called me the next day to say the car they were locating was sold. There is no inventory. Check dealer websites and you will see things like 5 highlanders in stock! It is crazy.
The question is when it will end. Once there is inventory the prices for new will go down and the prices for used will as well. Three years ago there were nice incentives on the Highlander and after much work I got a decent deal. If I really can get the Vroom deal at what was offered last week and there are no fees (I have never done a Vroom type deal on a lease), and they could locate a Highlander for me, based on last month’s numbers, I would come out about $700 ahead than I did on the lease 3 years ago (applying the Vroom money to the lease). Frankly I would rather pay $700 more and not have to do this much work (not because I am lazy, usually I visit 6 or more dealers, negotiate by email, phone, whatever works but because this process feels more uncertain to me and is more dependent on timing, there has to be an actual car available and Vroom has to agree with me on the condition and value of my vehicle and so on
FWIW - just sold my 2019 BMW X4 to Vroom last week. Lease was due to end in Jan. ‘22. Payoff was $35,700 and Vroom gave me $44,143. Had a 3 way call will Vroom and BMW to get the correct payoff quote and then the rest was all done online. They picked up the car on Wednesday, had my check on Friday. BMW processed payoff payment yesterday and closed account. Pre-negotiated a new custom 2022 X4 with 7.4% off MSRP before rebates/incentives.
His lease is ending on August 26, 2021, and we will be on the lookout for a new lease by month-end. The current car is Honda Civic 2018 EX-T and he is planning to get a BMW 330i. With current market conditions and scarcity of vehicles on the market, it is almost impossible to negotiate deals that were possible a few months ago. Thus, we wanted to seek your opinion on how to proceed further. See Scenario Below:
Honda Civic EX-T 2018
Lease Term Buy-Out from American Honda Finance: ~$13.5K
Carvana Offer: ~19K
Currently Monthly Lease Payment: $255/month.
What would be your suggestion?
Option 1: Should we return the car and start looking out for a new lease.
Option 2: Or finance/buy the car from AHF, and then wait for the market to normalize. We can sell the car to Carvana in a few months, assuming the market doesn’t crash, we would still have some positive equity.
Any other options?
Also, as mentioned above, we already have positive equity on the car, as the offer far exceeds the current finance amount. Let us know your thoughts.
I know that is not a good option. I haven’t bought a car and am not sure of the paperwork involved. If it is a pretty easy and convenient task, I would say Option 1 is a no-go from miles. Just wanted some insights from the group here.
Even though you have north of $4,000 equity in your lease it will be completely washed away with any lease you try to negotiate. Buy the car and wait out this insane overpriced bubble car market . It will be cheaper to finance your civic than lease the same exact model for a 2022 civic lease.
If you want to avoid the hassle of a car loan and you don’t have the cash sitting in a drawer, check your credit cards for installment loan offers that don’t require an application – they use some of the credit that’s already available on the card.
Here’s an offer I have on one of my Citi cards. I adjusted the loan amount to be relevant to your need for illustration purposes.
On this offer the APR was the same regardless of the term.
You might think, “6.99% is an atrocious rate for an auto loan,” and you’d be right.
But this will save you some time getting the title because the title doesn’t have to have the new lender added as a lienholder and then removed when you pay off the car note.
Assuming you can get 2.49% on a car loan, one month of interest for each option would be as follows:
