| silroc |
I did read all 3 pages of the previous thread, and that was very helpful -
My situation is slightly different, so I'll waste some more electrons.
I have an 04 MDX leased for 48 months Nav and Toruing.
Mileage is spot on so far, truck has been great. Would like another, or I am considering to outright purchase it.
The reason for my question - I am looking at purchasing a new home and the $530 payment on the truck makes things a little tighter than I want, therefore I want to either eliminate the payment by purchasing it, or lowering the payment on a different truck, or just financing the car with some cash down.
The payoff quote from Hona Finance is 33k. I *believe* the residual vale is abot 24k. I do have the cash right now to buy the truck, but 33k seems very steep considering new ones are not much higher, and I would prefer to keep the cash in the bank.
Do you have any advice for me? Would the dealer take less than 33k if I offer cash on the spot? ( I guess cash means nothing now adays)
Honda Finance was unhelpful saying they offer no refinance option, and there is nothing I could do to get out of my lease except pay the remaning 24 months lump sum - DUH , whats the point?
So in summary - can I lower my $530 per month payment in a reasonable way?
thanks in advance |
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| JeffK |
In a word NO.
As you stated you have read the previous posts and have come up empty.
Your analysis is correct.
The only way out of your situation is to buy the car. As you point out, you are upside down.
Having said that, when I say no, I mean there is no reasonable way out.
You could consider putting you MDX on www.Swapalease.com or www.Leasetrader.com. But with '06 leasing for much less than your monthly payment you would have to give a large incentive to have someone assume your lease.
Also remember that if someone assumes your lease, you will still be secondarily liable on the lease and that includes payments and excessive wear and tear.
Sorry for this information.
JeffK |
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| SDTS |
The only reason to buy it out would be to eliminate your payment....but you save nothing doing it, so wouldn't it make more sense to just leave the money in the bank and make payments on your lease with that money so you can still take advantage of all the protections of the market and loss possibilities that the lease provides?
I can't come up with a good reason to pay off your lease early.
You also need to check with Honda about assigning your lease to someone else. I have no idea how these websites work that JeffK pointed out....if they somehow free the bank of any liabilty to the lease, then they would work, but I do know that Honda Finance does not offer the option of assigning your lease to another party like a lot of other banks do.
I would just ride it out. Don't even prepay the payments, cause as the other threads pointed out, and even made me realize, you would be destroying the whole purpose of Gap if something were to happen to your MDX. |
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| JeffK |
As I pointed out, Honda Financial will permit an assignment, but you will still be secondarily liable on the lease.
JeffK |
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| SDTS |
I am not trying to be a pain, this is a serious question, cause everytime I have talked to Honda about reassignig a lease, they have said no, absolutely not. Is this within these websites that is making it different? Perhaps a California thing?
I even had a customer call and ask for these options a week or two ago, and we specifically called Honda and they said they do not allow it. Sure as heck does not mean that they did not fully understand the question and thought we were only speaking of COMPLETELY reassigning the lease, but I was just curious if it is these websites that are "changing the rules" we have been told by Honda Finance.
Of course..I guess I could always just go to the websites myself and find out too!!!! :D I could also just be wrong....would not be the first time!!!! :D |
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| SDTS |
Well......swapyourlease did not work. I went in to try to find out how they work, and put in my own Honda lease and it came up saying that my leasing company does not allow the transfer of leases.....Amercan Honda Finance. So perhaps it is a state thing and HOnda will do it if you call them directly?
Edited this in-----You can have it bought out and then released with another company according to this website, but I can;t say thatI would necessarily go down that route.....I can't imagin it not getting messy somewhere along the way!! :D |
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| silroc |
thanks for the feedback guys !!!
i have an Acura dealer looking into this. (I proposed giving him my truck and buying a new one from them - yes of course since my payment/ payoff amount is so high, he thought it would not make much financial sense for him to do)
I suppose he could roll SOME of the difference between the trade in value of the truck about 25-27 vs. the price he/we have to pay Honda (33k) into the price of a new MDX then I might just bite. So say a new MDX was 36, plus he added 3k for my trade, i would almost be willing to take it.
Like you all said, I wont be "winning" if I do it, but it may be an option. |
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| SDTS |
Be careful. YOu are walking a dangerous line with negative equity going into another lease for a payment that will be minimally better than what you are already paying. Ultimately, you will somewhat just be "extending" your problem for a longer period rather than having it just end sooner and starting fresh.
Once you start playing with Negative Equity, is gets harder and harder each time to get to the end of the tunnel.
The choice and your needs are definitely ultimately yours..so I hope it all works out for you!!!! |
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| silroc |
quote:
Originally posted by SDTS
Be careful. YOu are walking a dangerous line with negative equity going into another lease for a payment that will be minimally better than what you are already paying. Ultimately, you will somewhat just be "extending" your problem for a longer period rather than having it just end sooner and starting fresh.
Once you start playing with Negative Equity, is gets harder and harder each time to get to the end of the tunnel.
The choice and your needs are definitely ultimately yours..so I hope it all works out for you!!!!
great point - many thanks !
one thing that if I did do it, i would buy it, no more leasing for me :D :D :D :D |
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| JeffK |
Just an observation on your point that you will not lease again but buy:
From your posts, your problem is that to get out of your lease will cost you money because you are upside down.
Remember, your MDX has value. The problem is that the depreciation component of your lease payments has not equalled the actual depreciation, hence you are "upside down".
For example the value of your MDX is $24,000 and you have paid depreciation of only $3,000 to $33,000, hence you are upside down $11,000. (this is illustration only)
But remember if you had bought, you would be in exactly the same situation: When you go to trade or sell your MDX, you will receive the same $24,000!. Thus your true loss is the same as if you had leased.
Leasing still has the advantage of reducing the taxes you pay (in NY you pay taxes only on the lease payments not the purchase price a big savings) and the use of the money. When you buy you lay out for example $38,000. You lose the income on that $38,000. If we assume just a 5% return, that equates to $1900 per year!
Clearly, if you intend to change your car during the lease term, it is better to buy than to lease.
But remember, changing a car every 2 to 3 years is the most expensive way to own a car.
JeffK |
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