Transfer the lease or buy out and sell?

Ask the Hackrs
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As someone potentially seeking for his 1st lease car, I am really wondering how many of you end your lease by 1. return it after all the terms; 2. Buy it out and sell it/trade it in; 3. Transfer it. And how difficult/costly these choices could be.

Since this is going to be a 3 year commitment, I want to know it clear about the risk I am facing and what can I do with that. Thanks!

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Unless it’s the pandemic, most folks return the car at least end. For vast majority of the cars, the residual is higher than market price. There are exceptions of course.

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I’m pulling these numbers out of my rear but

  1. Return it, Over 50% do this.
  2. Buy it / Trade in, IMHO 40% do this.
  3. Transfer it, as most transfers are very limited, I’m going to say 10% as only experienced people transfer their lease for either financial reasons or keeping up with the Joneses reasons. The once in the lifetime transfer does happen of course, but I believe most of these are pros who know their stuff.
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Are people losing money trade-in or sell it? As Anamnesis111 shared, the car price is going down these days.

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Depends on the car, if it is a Toyota or Honda you can make some money

But don’t get a Toyota to make money as you made higher payments on a Toyota (mostly) so they lower their RV so you can sell it easier.

Lease a car you want to lease and can afford. That’s all the real advice. If you are trying to play the game, well you will make a few mistakes that will be quite costly before you are a pro at it.

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I am seeking for a Honda. I just want to avoid unnecessary cost never thought about making money by it.

By the way, if I am ready for selling it, it that true that I don’t need to care about the mileage of the lease?

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I don’t know if Honda has the 60 day rule (Like a ford does, you cant sell it 2 months before term expiration) , but no you don’t have to worry about mileage.

Note : Honda does have a gotcha of a $300 (Maybe more now) Purchase fee when you sell it to a Honda Dealer before Term.

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Understand. Thank you very much for your patient reply!

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That is not always the best decision. Why don’t you just finance it and sell it after 6 or so years. Have you compared the total cost of ownership for leasing twice vs financing for 6 years?

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Actually I am kind of fob and have limited credit record. So last time I tried to get my APR and it was 13%. Will lease terms be really effected by the APR as well? I have good credit score but just lack of history.

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first time? leases will have a similar APR…

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… and leasing may be as challenging, if not more so than financing.

With financing, you can always find a smaller bank or credit union for the loan. Leasing not so much.

I’d probably look at buying/financing, with a thin or new credit file.

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Different question, but similarly aligned;

Based on the above discussion, does it EVER make sense to lease a car that you want to purchase (on a good lease deal) assuming that used car prices will continue to decline and the car will lose more value than you paid in the lease? (leaving the car cheaper to purchase after the lease expires).

It seems with EVs this would be the best way to purchase one? (significant loss of value when used).

It seems to me the above option would work very well for models that depreciate significantly IF you get a really good lease deal, though that’s the whole goal of joining this forum haha.

These questions are asked assuming good credit and insurance history and such. Thanks y’all

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Any tips for trying APR in different bank or CUs? Every try seems to lower the credit. How would I know the APR is low before I actually hard pull?

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The RV is defined from the outset and is not necessarily related to real-world resale values.

If you are buying out the lease at end of term, the car does not become “cheaper” to purchase just b/c real-world resale value has declined.

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Ahh interesting, I have a good amount to learn about what’s set and not set. So, at the start of the lease the price at which I would buy the car when the lease ends is already set? That’s very interesting to me tbh. Not what I expected, I expected that it would be re-assessed at the end of the lease. Well, shoot haha.

Is there any way to do my idea then? Any reason why my idea would work or a way to negotiate it to work?

Seems like my idea is impossible then? Unless the dealership does something crazy?

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Most CUs have the rates listed, and you shouldn’t attempt until you are ready to buy. Also the dealer can offer you a rate that MIGHT be comparable.

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As for every dealer I met, they always said I cannot know th APR until I tried. What do you mean bu “might be comparable”? Is that might be comparable with the result of my soft pull?

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Yes. One of the main advantages of a lease is that the bank takes on all the unknowns of real-world resale value, not you.

Correct.

The dealership doesn’t have much/anything to do w/ the buyout. Some banks will require you to go through the dealership to process the buyout (which can result in additional dealer fees), but, again, the buyout price itself has already been defined from the start.

Any additional comments about this would probably be best moved to its own thread, so as to not derail the OP’s thread.

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Any F&I Worth their salt can guess based on your score / history. The real problem is that people LIE all the time and then they claim that 0.9% APR is LOCKED because the dealer told them the rate.

But Honestly

  • Thin file
  • First Car
  • Honda

It’s going to be EXPENSIVE in all counts. I would not lease a Honda at all or possibly Not lease this round in your case.

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