Automotive

Buyout or find another lease

  • Last Updated:
  • Nov 29th, 2017 12:05 pm
Tags:
[OP]
Member
Mar 4, 2010
475 posts
182 upvotes
Toronto

Buyout or find another lease

Hi automotive group, I usually hang out in other groups like personal finance/food etc but i need some advise. You guys seem to really know your stuff and I can safely say I'm pretty car-dumb.

heres the situation:
I have a 2014 Honda CR-V EX AWD that was leased for five years, i put a down payment of $1,168.14 and is due up in October of 2018. I have 11 lease payments left of $400.00.
Current estimated payoff amount is $19,906.98 with end of lease buyout at ~15k (including taxes i think). The reason why it is slightly higher was because i had a 2010 CR-V that i got out of the lease 18 months early to get into this one, so lets save the discussion on why i'm paying more on buyout etc. I understood the negative cash balance i was in when trading up.

The car today has about ~75k km's on it, no dings, no scratches etc never been in an accident. i doubt i'll get close to 100k by the end of the lease. I had 24k yearly allowance (i know i should've negotiated that down but wasn't sure where i'd be working and commute)

I've also changed jobs and my current salary allows me to have about a 50% increase in my monthly car payments (lease or finance) to $600 including tax (i'm in ontario). I can also put appx $3-5k as a downpayment.

Do i go with the buyout of the car? Am i in an advantagous spot to buy it out after the 5 year lease? or should i go with buying/leasing a new car. I'd like to possibly move up a "class" of SUV. Not necessarily larger but nicer.

I'm currently looking at the Aruca RDX, Infiniti QX50, Ford Edge, and Chevrolet Equinox. Now keeping in mind these are the ones that i've kinda looked at online and have not test driven etc.

If I'm going to get a new car, I'd like to go in and negotiate at the end of Dec, to hopefully get a clearing out deal of some sort. I live in the suburbs just outside of Toronto, so lets avoid the public transit/bicycle stuff.

Thoughts? ideas?
19 replies
Newbie
Jun 19, 2017
57 posts
15 upvotes
Would you be paying cash for the payoff or financing? Can you see yourself driving the car for the next 4 years or longer? If you're already looking at new cars, it seems you already know you want to keep leasing.
[OP]
Member
Mar 4, 2010
475 posts
182 upvotes
Toronto
gymrat999 wrote: Would you be paying cash for the payoff or financing? Can you see yourself driving the car for the next 4 years or longer? If you're already looking at new cars, it seems you already know you want to keep leasing.
I would be financing it out over at most 20 months depending on the interest rate. possibly less and maybe moving it through the LoC. I would be driving it 5-6 years more maximum and then gifting it to a relative who would be able to drive at that time.

I'm looking at new cars because I wouldn't want to be caught in the last 2-3 months of leasing where Honda knows that I have to do something. If i decide, i can decide by this year end and be in the proverbial driver seat of the decision making

I think the real question is, could i get into a nicer class SUV/CUV for $600 a month lease/financing? is moving up to the Acura/Infiniti level of vehicles worth it as someone who doesn't get company paid cars or is all of this out of my price range?
Deal Addict
May 17, 2012
2317 posts
1066 upvotes
ontario
If the vehicle still ticks off all your "vehicle checkboxes" then I would buy it. If there's an area it doesn't then walk away.

It's a 2014 with under 100k. It will last a long time and will save you some sheckles vs buying or leasing new
[OP]
Member
Mar 4, 2010
475 posts
182 upvotes
Toronto
esoxhntr wrote: If the vehicle still ticks off all your "vehicle checkboxes" then I would buy it. If there's an area it doesn't then walk away.

It's a 2014 with under 100k. It will last a long time and will save you some sheckles vs buying or leasing new
LOL, you got me at sheckles...

Thanks for the input! :)
Banned
Aug 22, 2017
367 posts
161 upvotes
But then you have to consider, you'll be driving it without any warranty. Unless you bought extended warranty, maintenance will be on you. Given it's a Honda, of course oil change and stuff will be cheaper, but if you run into any issue with the car then your paying for finance and fixing the car as well.
Deal Guru
User avatar
Oct 6, 2010
13152 posts
7466 upvotes
Toronto
Personally, I'd let the lease go. It will be 4 years old, so basically you are going to be spending $20k to purchase an older car with 85,000kms. Doesn't sound like you do much moving, so the question is:

If you jump into something else, like luxury brands, do you really want a $600/mth payment for something sitting in your driveway?

Personally, I'd forgo it all, buy something on the cheap keep my cash. If you were a driver driver, I would say get something sporty and fun, but it doesn't sound like you at all. I'm thinking your best bet is to take your $20k, buy something used like the 2015-2016 equinox/edge certified pre-owned with low kms, already hit hard with deprecation but a great vehicle and let it sit in your driveway waiting to be used.
DYI difficulty scale:
0-joke
10-no joke

¯\_(ツ)_/¯
Deal Guru
User avatar
Jul 12, 2003
10683 posts
3015 upvotes
Toronto
OP made a wrong decision by putting a large KM allowance on his lease and ended up not using those KM that you paid extra for (your lease payment could have lower by $30-40 for only 20k or 18k KM.
Also, why leasing it for 5 years? Most warranty on the major components cover for the first 4 years, but leasing the car longer than the warranty period. You are putting your risk to responsible for the repairs or big maintenance (replacing brakes, tires are other tear and wear parts).

Usually, I would recommend people to just lease a fresh new car but in your case. You over paid your lease payment for the big KM allowance, now the car is under mileage and the car is mint IN and OUT as per your describe. It would be worth to keep it especially it is a Reliable Honda.
If you buy out the car, you will have a used car (used by you anyway) that has below average KM and mint condition and you know that car would easily last another 4-5 years.
Question is the loan, I'm not sure how good you can get as interest for your car loan. Anything over 3% seems a bit high.

If you sign another lease next year, sure you will be getting another new car probably nicer than a CRV, but it is not the most economic option than buying out the CRV.

So it is the battle of the Needs and Wants.

Needs....buy and keep your existing CR-V.
Wants... Get yourself another new SUV.
Retired Forum Moderator February 2009 - June 2015
[OP]
Member
Mar 4, 2010
475 posts
182 upvotes
Toronto
MP3_SKY wrote: OP made a wrong decision by putting a large KM allowance on his lease and ended up not using those KM that you paid extra for (your lease payment could have lower by $30-40 for only 20k or 18k KM.
Also, why leasing it for 5 years? Most warranty on the major components cover for the first 4 years, but leasing the car longer than the warranty period. You are putting your risk to responsible for the repairs or big maintenance (replacing brakes, tires are other tear and wear parts).

Usually, I would recommend people to just lease a fresh new car but in your case. You over paid your lease payment for the big KM allowance, now the car is under mileage and the car is mint IN and OUT as per your describe. It would be worth to keep it especially it is a Reliable Honda.
If you buy out the car, you will have a used car (used by you anyway) that has below average KM and mint condition and you know that car would easily last another 4-5 years.
Question is the loan, I'm not sure how good you can get as interest for your car loan. Anything over 3% seems a bit high.

If you sign another lease next year, sure you will be getting another new car probably nicer than a CRV, but it is not the most economic option than buying out the CRV.

So it is the battle of the Needs and Wants.

Needs....buy and keep your existing CR-V.
Wants... Get yourself another new SUV.
Thank you MP3, there are some good points. I did the 5 year lease as i was making much less before. The reason why i'm at a decision point at the 4 year mark of the five year lease is due to needing new tires/some bigger maintenance items etc. I either trade it in now for a new car or go all in for new tires/winter tires and rims/etc.

the financing out at end of lease term i'm not too concerned with. of the 15k buyout i will probably have 10k in cash and throw the other 5k on my Heloc (to be paid off in 5 months)
Deal Addict
Jan 15, 2017
2917 posts
2274 upvotes
A 3yr, 20,000 kms lease on Acura RDX Tech at full MSRP is currently about $619 a month (taxes included). Should be easy to get $600 a month.

I selected a 3yr lease as with your current situation you can see that with longer leases there is a possibility of putting money into the vehicle before the lease ends. Your challenge is finding an Acura dealer who is willing to buy out the lease on the CRV and allow you to start from $0 on the RDX. For that, you will have to visit the dealers and see what happens. The worst case scenario is that you will have to bring some money to the table to clear the lease on the CRV - this may not be a bad thing considering if you keep the CRV you have to spend money on maintenance anyway. Your decision then becomes to spend the money on the CRV with plans to buy it out - or spend the money on a new RDX.
Deal Expert
User avatar
Apr 21, 2004
51983 posts
16600 upvotes
I think you can still get extended warranty on the vehicle up to eight years.

But if you've had no issues, what's the point?

That's the beauty of Honda Plus. Just write Honda to confirm.
Deal Guru
User avatar
Jul 12, 2003
10683 posts
3015 upvotes
Toronto
djfunk wrote: Thank you MP3, there are some good points. I did the 5 year lease as i was making much less before. The reason why i'm at a decision point at the 4 year mark of the five year lease is due to needing new tires/some bigger maintenance items etc. I either trade it in now for a new car or go all in for new tires/winter tires and rims/etc.

the financing out at end of lease term i'm not too concerned with. of the 15k buyout i will probably have 10k in cash and throw the other 5k on my Heloc (to be paid off in 5 months)
If you are buying out the car, just maintaining the car like you are the own of the car. Save as much as you can to pay it off 12 months later. Then you don't have to worry about car payment for the next 4-5 years.

New lease, no maintenance to worry, but fix $600/m payment for another 4 years,
Retired Forum Moderator February 2009 - June 2015
Deal Addict
Aug 10, 2013
2585 posts
1855 upvotes
Whats a used one going for in similar km/year/trim/mileage? Thats you defining answer whether its smarter to keep it or dump it.
Smash that like button!
[OP]
Member
Mar 4, 2010
475 posts
182 upvotes
Toronto
So i met with the Acura dealer, these are the 'deals' on the table with them taking back my CRV lease (remaining 4,000 payment over 10 months on existing lease):
Tech Package
$1,500 down including first biweekly payment. $300 biweekly on 4 years (1.9% rate)
$2,700 down including first biweekly payment. $282 biweekly on 4 years (1.9% rate)
$1,500 down including first biweekly payment. $310 biweekly on 3 years (0.9% rate)

Elite Package
$2,800 down including first biweekly payment. $300 biweekly on 4 years (1.9% rate)

Are any of these good deals? I am going back to meet with the dealer on Thursday and i've said when i come in, i want the best offer possible since its the last day of the month.

Top