Automotive

Lease early return

  • Last Updated:
  • May 9th, 2021 1:15 pm
[OP]
Newbie
Nov 26, 2015
89 posts
47 upvotes
Toronto, ON

Lease early return

My lease is going to end by the end of July. I am not going to stay with the same brand. I am wondering if I can return the car earlier. I talked to my dealer it seems they could end my lease earlier without any penalty and I can stop my current weekly payment after that. Is it too good to be true? They mention they will inspect the car instead of leasing company. Does anyone has deal with this situation before?
Last edited by babykings on May 7th, 2021 8:25 pm, edited 1 time in total.
16 replies
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Jul 12, 2003
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babykings wrote: My lease is going to end by the end of July. I am not going to stay with the same brand. I am wondering if I can return the car earlier. I talked to my dealer if it seems they could end my lease earlier without any penalty and I can stop my current weekly payment after that. Is it too good to be true? They mention they will inspect the car instead of leasing company. Does anyone has deal with this situation before?
You sure if you did not miss the 2nd part?
They can take the car back and you stop making lease payment on this car BUT you have to lease another car from them.
Retired Forum Moderator February 2009 - June 2015
[OP]
Newbie
Nov 26, 2015
89 posts
47 upvotes
Toronto, ON
MP3_SKY wrote: You sure if you did not miss the 2nd part?
They can take the car back and you stop making lease payment on this car BUT you have to lease another car from them.
No, that is not. I said I will return the car by the end of the lease. But if possible, I want to do it earlier. It could be the case that what you said is what he wants me to do once I go to the dealership.
Member
Feb 8, 2010
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Used car price has been soaring, if the dealer can make a profit, they don't mind take back your car earlier.
Jr. Member
Nov 24, 2012
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Toronto
Read your lease agreement for details but typically you should be able to drop it off now and the financing company will send you a final invoice (that will include any remaining payments). That said, if you drop it off much earlier than few months into expiry the the vehicle gets sent to auction and you are then responsible for any remaining payments plus difference between residual and auction price.
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Dec 18, 2002
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billy_z wrote: Used car price has been soaring, if the dealer can make a profit, they don't mind take back your car earlier.
This.
They'll essentially pay the buyback (residual + remaining months) and resell for profit.
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cil254 wrote: This.
They'll essentially pay the buyback (residual + remaining months) and resell for profit.
Then I wonder what car it is.
If OP proceed, make sure on some document it is written dealer agree to take the car back before the lease end date, and all outstanding lease payment are waived and no penalty.
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If I were you op, I’d take your current car with you when you go shopping for your next vehicle. Have a dealer or two or three appraise your car against your lease buyout.

As mentioned above, it’s very possible that in this hot market your car is worth more than the current buyout. If it is, your new dealer can show you positive equity to be used in your new deal.

Ie.

Buyout is $30k + HST

Appraised @ $32k

Net $2k goes as cash down into your next deal to lower your payments. Or they could cut you a cheque back.
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Dec 3, 2009
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xjesterxx wrote: If I were you op, I’d take your current car with you when you go shopping for your next vehicle. Have a dealer or two or three appraise your car against your lease buyout.

As mentioned above, it’s very possible that in this hot market your car is worth more than the current buyout. If it is, your new dealer can show you positive equity to be used in your new deal.

Ie.

Buyout is $30k + HST

Appraised @ $32k

Net $2k goes as cash down into your next deal to lower your payments. Or they could cut you a cheque back.
Curious, how does this work behind the scenes? Does the dealer that's willing to do this buy out the vehicle from the leasing company on your behalf?

How would this work when switching brands since a third party typically cannot buy out your lease directly?
Also, since it's technically the dealership buying the car on your behalf, versus the dealer acquiring the vehicle directly, wouldn't the dealer use buyout + admin + HST to calculate the equity (positive/negative)?
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pentiumvi wrote: Curious, how does this work behind the scenes? Does the dealer that's willing to do this buy out the vehicle from the leasing company on your behalf?

How would this work when switching brands since a third party typically cannot buy out your lease directly?
Also, since it's technically the dealership buying the car on your behalf, versus the dealer acquiring the vehicle directly, wouldn't the dealer use buyout + admin + HST to calculate the equity (positive/negative)?
Yes, they would buy from the leasing company and pay buyout + admin etc just like if you were buying it out yourself.
I've done it several times with dealers from the brand and with general used car dealers.
All I had to do is provide the ownership paper and they figured the rest in all cases.
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Nov 12, 2004
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pentiumvi wrote: Curious, how does this work behind the scenes? Does the dealer that's willing to do this buy out the vehicle from the leasing company on your behalf?

How would this work when switching brands since a third party typically cannot buy out your lease directly?
Also, since it's technically the dealership buying the car on your behalf, versus the dealer acquiring the vehicle directly, wouldn't the dealer use buyout + admin + HST to calculate the equity (positive/negative)?
HST should be a wash for a dealer... What they pay out if anything on a deal like that they just deduct from what they have to remit.

I am also pretty sure they have a evil little gnome in the back office who can also "play" the numbers so they line up in their favor LOL
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infotech58 wrote: Read your lease agreement for details but typically you should be able to drop it off now and the financing company will send you a final invoice (that will include any remaining payments). That said, if you drop it off much earlier than few months into expiry the the vehicle gets sent to auction and you are then responsible for any remaining payments plus difference between residual and auction price.
This is not how it works at all.

Lease is no different than any used car out there. When you go to trade it or sell it to a dealer all that matters is what's left to pay on lease and what the dealer offers you for it. No need to worry about any auctions or anything like that.
Right now it's very easy to walk away from leases even 2 years early and owe nothing on it due to huge supply issues and used prices soaring. I know someone who did just that on a CX5, 2 years into a 4 year lease.
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Oct 23, 2017
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babykings wrote: My lease is going to end by the end of July. I am not going to stay with the same brand. I am wondering if I can return the car earlier. I talked to my dealer it seems they could end my lease earlier without any penalty and I can stop my current weekly payment after that. Is it too good to be true? They mention they will inspect the car instead of leasing company. Does anyone has deal with this situation before?
It all depends on the vehicle, its condition, and its current value to the dealer as a used car. And remember that the original lease rate was probably bought down, so Honda Finance has an incentive to end such leases too if the buyout numbers are right. When I traded my last CR-V which had a very low mileage they offered a really good incentive to trade it early (2 months). They did not have a single 3-year old CR-V on the lot at the time, and that is a very popular used car that sells for top dollar! The current selling price of the vehicle was at least $5k more than the residual value I could have bought it for.
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Nov 24, 2012
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aleks wrote: This is not how it works at all.
What you described is applicable in case of selling or trade in to a dealer but it does not apply to lease return to manufacturer via dealer.
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pentiumvi wrote: Curious, how does this work behind the scenes? Does the dealer that's willing to do this buy out the vehicle from the leasing company on your behalf?

How would this work when switching brands since a third party typically cannot buy out your lease directly?
Also, since it's technically the dealership buying the car on your behalf, versus the dealer acquiring the vehicle directly, wouldn't the dealer use buyout + admin + HST to calculate the equity (positive/negative)?
It would be Dealer A (your dealer) buying the vehicle out from Dealer B who bought out the lease from the Manufacturer. Say in the case of a Toyota:

You make a deal with Milton Acura
Milton Acura calls Milton Toyota and asks them to assist with the buyout
Milton Toyota buys out the lease

Now, Milton Acura may be buying out the lease to stock from inventory themselves, or they might have it sold to another dealership. They might even have Milton Toyota fronting the value, in which case Milton Toyota will buy out the lease and cut a cheque for the difference (equity or inequity) to the Acura store. They would be looking at the buyout pre-HST and comparing that to the value directly. If they think the car is worth $12k and the buyout is $10k, then there is $2k positive equity.

It all really depends on your vehicle, mileage, condition, features, accident history, etc, your lease end value/residual value/current buyout including payments, and most importantly the market. If your buyout is $10k, and the dealer thinks they can sell your vehicle for $19,999 then they might offer even more to make sure they get your car. They could be tricky too though, and tell you that they'll get you out of the lease while covering your payments to try to steal your trade @ $10k... That's why it's important to take it to at the very least 2 different stores to make sure you're getting the right value.
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There are only a few months left till July and with increase in car prices the dealership will simply buy out the lease and sell it and still come out ahead.
[OP]
Newbie
Nov 26, 2015
89 posts
47 upvotes
Toronto, ON
Thanks everyone. It seems it is not very surprising or wired that the dealership would willing to take my car at this moment. I will continue to talk to them then.

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