Thank you for following up (and with so much detail). This is a very informative thread.
Bookmarked.
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Interesting they do not add in the tax on the quote. So if you were to buy it outright for yourself you would need to add in the tax. On my Audi they break down all parts of the transaction on the online portal.
That’s what HFS made it sound like. If I were to buy this car myself, and finance it through my credit union, sales tax would have to be added to my purchase price of the car. Ergo $35,204 plus 7.75% sales tax.
Honda’s customer portal is not nearly so customer-friendly as Audi’s. All I get is one undifferentiated figure, $35,204.
Audi’s portal might be customer-friendly, but their buyout pricing sure isnt. For some dumb reason, they charge a higher buyout price if selling to anyone other than the leasee.
Do you remember if the dealer payoff quote that you received excluded tax?
Was it appropriately lower?
I am checking my payoff quote on the website and it must include sales tax, math checks out
That’s exactly why everyone that leases should construct a lease amortization schedule so that they know the lease balance. The lease balance will include sales tax on the original lease IF tax was due upfront AND capped in the lease (tax computed on the sell price or the sum of the base payments). Whether or not you pay tax on the lease balance if you exercise you purchase option depends on your state. Here’s an example…
I payed the sales tax for the payments upfront. I am thinking the payoff quote includes sales tax on the RV only.
You need to know your outstanding lease balance. Is it the end of term residual value or, are you paying off you lease early? Lease balance and payoff are two different things. Whether you pay tax on the outstanding lease balance will depend on your state regardless of whether you financed you sales tax in the first lease.
I am looking at early payoff.
I have payments left on the lease. I payed the sales tax for all the payments upfront already.
I am thinking that in my situation, the lease payoff should be total of leftover payments + RV + RV sales tax.
Should I expect anything else?
Edit: the final number matches almost perfectly my payoff quote on Honda’s site
All most perfectly? What’s that mean? No, they have to exactly match… however, a few pennies difference is okay, though. If you look at your Honda lease agreement, the calculation of the lease balance is the present value of the remaining payments plus the present value of the RV discounted at the interest rate implicit in the lease. I have a leased Honda CR-V and my lease balance always matches the lease balance on my monthly statement (excludes tax).
Thought, and opinions: I am considering this: swap into a Honda lease that is close to ending and buying it out after the swap is complete. Good way to buy a used Honda?
How do you swap into a Honda lease?
Swapalease or leasetrader I guess
Honda Finance Services does not allow lease transfers.
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So I guess I would have to catch someone about to turn it in and buy the car from Honda Finance Services. Or this would work with a Tacoma as well. Any car that has equity at lease end.
I don’t understand what you are trying to do. If there’s equity, why would someone turn it in? Even if they did, that doesn’t mean that HFS or the dealer will sell it for the RV. They will sell it for the market value.
The answer to your first question is because people are stupid (or ill informed). Lease is ending, time to turn in vehicle and shop for next one - with no clue their ending lease may have any equity. But agree, this scheme is not likely to work because either the dealer will sell vehicle at market value or you offering to buy the lessee’s vehicle will trigger them to look at its valuation.
What you are trying to do is potentially a good idea, just with someone other than Honda. Pick a VIN of a vehicle you are interested in on Swapalease. Find out what EOL RV is (as well as current buyout). Compare that value to current pricing for that model. Submit it for Carvana, Vroom, KBB for additional valuation data. As many manufacturers do not allow transfers in the last 6-12 months of the lease, you can potentially use this to your advantage, as it gives you a 6-12 month trial period of driving the vehicle to determine whether you actually want it.
The challenge is going to be finding a vehicle which you want, where the manufacturer has not propped up the RV so you actually have equity in it. Honda would have been a good one because they don’t typically prop up lease RV - but they are out because they don’t allow transfers. My Tundra lease was heavily subsidized by a crazy high RV from SETF, so that Toyota would be a bad candidate.
A Taco or Tundra through TFS was also on my list.