I have sold 2 leased vehicles to Car Max, but they were both through Toyota Finance. The key is to call the finance company to see if you can sell it to CarMax. It should be no different than trading in your vehicle to any dealer.
This may be dated, but I found for both my cars, CarMax offered me exactly $4k less than what they will sell it for. If they use the same formula, you can look for cars with similar miles to get general idea on what you will get from them.
So my buddy took the Pilot to CarMax. Appraisal was 29k
7k negative equity.
They said his options were to pay the 7k to get out of the lease or he can roll it into one of their cars.
Heās got a 2018 EX-L RES
Odometer: 4,200
Thoughts?
He can probably get higher bids from the places I mentioned above, or maybe a Honda dealer. He can probably minimize the loss selling the car privately- he might get lucky, doesnāt cost anything to advertise it on Craigslist.
What would he do if he got out of the car? Get another car with a lower payment? With the cost of getting out of his current car, does he save much? How about a second job or cutting other expenses?
Hi,
He may roll the negative equity into buying another car with higher miles / lower payments. Will be tough. Thereās no way he can fork over 7k to get out of the lease.
He thought about going to Honda but feels bad about going to the same dealer he leased from. I told him to try another one.
Do you think Honda might potentially be more competitive than CarMax? (Maybe to try and keep him as a customer, etc)
Why would your friend feel bad? The dealer already made their money on the first deal and would be happy to sell him another car.
Forgot to mention, CarMax offering 2k in tax savings if he buys a car from them that is 29k or higher
As mentioned above he needs to try carvana and vroom.
The 7k in negative equity will make even a cheap carmax car expansive.
And carmax is overpriced.
Folks have mixed results with carmax. Some get stupid high bids and others lowballed. When I was looking to offload my Fit, carmax was the lowest bid I got.
And, yes, the high bid was so damned near what a new one could be bought for, it made no sense, but thatās not my problem.
Taking it to Honda may help if he plans to get another vehicle. Otherwise they are just buying it like a CarMax, Carvana, or Vroom. The only reason they will offer more on the trade is if they know they can make money on the deal.
As everyone probably is aware, a lease is no different than a purchase. It depends on your negotiated price at the time of lease. The lower the price, the lower the payment, but also less upside down you are. For instance a BRAND NEW Pilot EX-L RES is selling for between $36k and $37k (on a $41k MSRP on Truecar). So, I suspect, the most any dealer will offer is $31k. Private party will be about $32-33k.
If he took it to honda, would they roll the remaining lease payments into another car, or roll in the negative equity?
If he rolls a ton of negative equity into the next car, how much is he going to lower his payment to drive a substantially worse car? I donāt think this makes sense.
Heās in a tough position.
He and a bunch of his co-workers just got let go. Iām trying to help him find the best possible way out of this lease 
Find other places to cut corners. Nothing good will come out of this much negative equity. If carvana and vroom donāt pan out, just ride it out any way possible. Can always try to work something out with Honda to delay payments a couple of months and tack them on at end of lease.
They will roll in the negative equity.
Rolling in $6-7k in negative equity is not really gonna help your friend. On a 3 year lease, thatās $165-$195 a month on that negative alone plus whatever the lease payment is on the new lease. So, figure about $400-500 a month. So, unless your friend is paying $600-700 a month now, heās not really improving his situation by trading it in. Plus he will be driving a cheaper vehicle.
A more risky idea is for your friend to rent out his car through Turo or something like that to supplement his payment.
Looks like some better progress yesterday. He called Carvana and they appraised at $33,960. Way better than CarMax ($29,000)
Also the negative equity with Carvana drops down to $2,350 vs $7,000 with CarMax.
Pretty significant.
Glad the numbers improved. I understand the want to get of the lease, but if he still needs a vehicle to get from point a to b, how much is his payment going to improve? [A 60 month loan on a 30k vehicle is $540/mth at 3.11%, how much lower is that than the lease payment on his Pilot] What are his prospects of landing another job? The 100-200 per month lower he would be paying, it would take awhile to recoup the equity hit.
One potential scenario is to lease a completely different class of vehicle (something with a $150/mth payment) and get the dealer to match the best trade in offer he has received, so he is only rolling in a minimal amount of negative equity. [But not sure how he would answer the income/employment questions when he applied for new loan, since he is now out of work. ]
I got to believe Carvana is smoking crack with that offer. I doubt your friend could even sell the car for $34K. I wouldnāt assume youāre going to find more by continuing to look.
If you are trying to find the best possible way to help him then stop telling him to trade down (if it wasnāt your idea then talk him out of it). Rolling that much negative equity is only going to screw him worse and not save him much on a monthly payment, which is what others have already stated. Also, if he canāt afford his current payment then he can afford a payment that is $100-$200 cheaper. Tell him to take the $34K from Carvana and run. He needs to beg, borrow, or steal that $2.4K to pay the difference. I am telling you, do not hesitate, do not hold out for more, etcā¦ Have him trade it in now and take the hit. It is a gift from the almighty that he was offered that much. This is the best and ONLY option for him.
Just a thoughtā¦but if you trade into Carvana and buy a car from them you also get the tax credit. Also, they will roll the negative equity into the new car. Example:
Carvana - $33,960
Pay Off - $37,000
Negative Equity is $3,040
Buy New Car from Carvana - $15,000
Tax - $0, if you buy from them pay $0 tax
Add Negative Equity - $3,040
Total Financed - $18,040
Also, use your own financing from credit union. I found their financing to be high.