| bdmd |
My lease on my 05 MDX is coming to an end in June. I was looking through my lease papers to see if I would be penalized if I turn it in now, other than having to go ahead and pay the remaining three payments. There is a clause on my lease agreement that reads :
"I may have to pay a substantial charge if I end this lease early. The charge may be up to several thousand dollars. The actual charge will depend on when the lease is terminated. The earlier I end the lease, the greater this charge is likely to be." On the back the early termination lease liability clause states "I will owe lessor...any other amounts owed arising from my failure to keep promises under this lease."
However, no specific amount is given. I will not have to pay a disposition fee. I called the customer care line and they said all that would be owed would be the remaining payments, plus any excess wear/tear, mileage overage, etc. Based on that, should I expect any surprises? Has anyone here had experience turning in their lease early with Honda Finance? |
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| JeffK |
I believe this is what will happen:
You will have to pay the difference between wholesale value and the amount of depreciation you have paid to date.
As almost all leases are "upside down", meaning at lease end the buyback is greater than the wholesale, at any given moment in the lease you are "upside down".
The difference is greatest at the beginning of the lease and decreases with time.
The reason for this is simple: When you walk out of the door with your new MDX, it depreciates 15%, but you have only made one lease payment.
In your case I believe you have already stated your option: Pay the last three months payment and give back the car. But before I would do that, I would of course keep the car and use it.
Honda does not have the GM "pull back plan", that permits the lease holder to turn in his car within 90 days of lease end with no penalty, provided you either buy or lease a new GM product.
Hope this helps.
JeffK |
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