Buying out a lease and reselling privately

Jiangman wrote: ↑ I have a 2018 Honda CRV EX, 30000km
I will be leasing another car so this car will either be returned to dealer or bought out and sold.
Residual is about $18500, and just from some quick searching it looks like it'll sell for $23-25000 privately.
Lease ends in a few months and I'm debating if it's worth it to buy it out and resell privately.
Never done this before so I don't know about any of the costs involved.

Is this worth it?

Post it for sale now and see if you can sell it for 23-25 privately. Also where are you? In Ontario I think private buyer will have to pay tax on it, if you're in Alberta (maybe a few other provinces) there is no tax to pay on used private sales. With such low kms I assume you'd be able to sell pretty quick.

Your costs would be residual amount at time of buyout + $386 to buy from Honda + Tax(es) where you live.

I just did this with my VW Golf. Residual was about the same as yours and ended up selling it privately for $25k. You need to add the cost to do a safety ($100-150), lease buyout fee ($500 for VW), HST and $20 for the Used Vehicle Information Package/UVIP (ON only).

will you be leasing another Honda? If so you can dangle this carrot in front of them, see what kind of value they can give you for letting them have the car at end of the lease rather than you buying/selling.

why not put it up lease buster and see if you can transfer the lease for a profit?

Jigsaw wrote: ↑ why not put it up lease buster and see if you can transfer the lease for a profit?

As per the OP the lease ends in a couple of months and many manufacturers do not permit a lease transfer if less than six months are remaining on the term. Furthermore, who would want to take over a lease and incur lease transfer fees for only a couple of months of usage?

The OP wants to profit from the relatively low residual value meaning it's in their best interest to potentially buy it out, then list it for sale and hopefully make a few thousand dollars.

OP, confirm what the admin fee is to buy it out at lease end, add in the cost of the UVIP, safety standards certificate, and unfortunately HST, then decide if after all of that you think you can still turn a decent profit.

Jigsaw wrote: ↑ why not put it up lease buster and see if you can transfer the lease for a profit?

Many companies doesn't allow lease transfer less than 6 months before the lease ends.

$18500+HST is $20900 + Transfer Fee + Inspection around $500

Your cost is around $21400.

So you want to see if you are able to sell above $22000 to make your time and effort it.

MP3_SKY wrote: ↑ $18500+HST is $20900 + Transfer Fee + Inspection around $500

Your cost is around $21400.

So you want to see if you are able to sell above $22000 to make your time and effort it.

That's a good starting point thanks.

Additional information is this is a corporate leased vehicle (small business). Not sure if that adds any additional fees.

I can't comment on the costs associated, but with the high demand for used cars right now you could likely make a decent profit on your private sale.

My mechanic told me one of his customers took over the lease of a Porsche 911 GTS off of lease busters earlier on in the pandemic and about a month or two ago, when the lease was done, had the option to buy it out, which he ended up doing. The dealership that the car was bought from offered him $40k more than what the lease buyout was and he ended up selling it back to the dealer for a decent profit (minus the expenses of the lease transfer/monthly cost during lease and whatever applicable taxes, inspection fees, etc). I think he ended up putting the profits towards the down payment of a new Porsche.

It's amazing what the chip shortage has done to the car market even with all this working from home

In Ontario at least, you probably want to find someone that pay you a "finders fee" to assume the lease and then buy it out. If you buy-it-out (to flip or for any other reasons), I believe you'll have to pay HST on the buy-out amount and then the buyer will have to pay taxes on it as well.

I took a buyer to the dealer with me, did the lease transfer and they bought it out. HST was only paid once this way and I got $2,000 in my pocket.

Rob_EV wrote: ↑ I took a buyer to the dealer with me, did the lease transfer and they bought it out. HST was only paid once this way and I got $2,000 in my pocket.

Interesting, so the buyer paid you 2k, and paid for the remaining lease balance, buyout, etc?
Did you have to do any additional paperwork in terms of the transfer of ownership or plates?
And where did you advertise your car?

Thanks, you can tell I haven't sold a care privately before.

Jiangman wrote: ↑ Interesting, so the buyer paid you 2k, and paid for the remaining lease balance, buyout, etc?
Did you have to do any additional paperwork in terms of the transfer of ownership or plates?
And where did you advertise your car?

Thanks, you can tell I haven't sold a care privately before.

EXACTLY. Apparently the dealership does this sort of thing all the time. There was a lease transfer fee of about $500. At least HST didn't need to be paid twice.

Places to advertise (all free):
Autotrader, Kijiji, FB Marketplace, Local FB groups

If you are going to lease another car, you could try trading in your current car. Dealers have no issue buying out the car. Can potentially save taxes.

IF you tell the dealer you want to buy out the lease to sell privately, they may very well make you a better offer on the spot. Not quite as much as the private sale, but would save you a lot of hassle.

Rob_EV wrote: ↑ EXACTLY. Apparently the dealership does this sort of thing all the time. There was a lease transfer fee of about $500. At least HST didn't need to be paid twice.

Places to advertise (all free):
Autotrader, Kijiji, FB Marketplace, Local FB groups

Your finance company allow you to lease transfer within the last few months of the lease or was it over 6 months before the end of your lease at that time?

prod wrote: ↑ IF you tell the dealer you want to buy out the lease to sell privately, they may very well make you a better offer on the spot. Not quite as much as the private sale, but would save you a lot of hassle.

Have you try, any example how much they offer versus the market cost?

MP3_SKY wrote: ↑ Your finance company allow you to lease transfer within the last few months of the lease or was it over 6 months before the end of your lease at that time?

I purchased a lease transfer here on RFD BST and bought out their VW lease on the maturity date.