SaintNexus

I've been leasing my 2012 Honda Accord SE since August 2012. My payments are $230.32 a month, and I still have 10 more payments to go. It has a payoff amount of $16,322.31.

I've driven 40,521 miles, and has some minor damages.

CarMax gave me an offer of $10,000 for my car. They said that they buy the car as is, and that I have to pay the remaining balance of the lease, which is another $2,300.

So, does this mean that from the $10,000 that they are offering, I have to pay the lease company $2,300, and I get the remaining $7,700?

Or, do I have a balance of $16,322.21 plus the $2,300 remaining on the lease, and after I get the $10,000 from Carmax, I still owe Honda $8k?

I'm really confused about this, can someone please explain?

mmarshall

Before your questions can be totally answered, first, how "minor" is the damage on the Accord? If it exceeds that allowed on the wear-and-tear clause, you might (?) owe a penalty on top of the other payoff expenses. Same with the mileage. An Accord leased in August of 2012 (26 months old) with 40,521 total miles would have roughly 1558 miles a month, or 18,702 miles a year. Bingo......you're probably over the yearly mileage limit, since most leasing contracts range allow somewhere from 10,000 to 15,000 miles a year. If you didn't purchase the extra mileage when first leased it (and you keep driving at the same rate), you will probably also have to pay a mileage when the lease contract is up....maybe even now if you pay it off early.

RNM GS3

You gotta pay Honda the full payoff amount of $16,322.31 plus remaining payments
If u keep it and return to Honda at lease end, u will pay for over mileage and wear/tear penalties on the car.

SaintNexus

I got involved in a hit and run and I never called my insurance company to make a claim. The front left fender has a slight dent. Some jackass hit me when I was at the beach in San Diego.

pbm317

Depends if your "payoff" amount is what the end of lease purchase option is.. or if that is the true current payoff.

If $16,322 is your current payoff, and Carmax is giving you $10,000, then you need to settle up the final $6,322

If 16,322 is your lease end payout, you likely owe $16,322 + 2,300, so then with $10,000 from Carmax, you'd need to settle up ~$8,600

Sounds like carmax is lowballing you pretty bad.

bitkahuna

iTrader: (20)

are you asking this because you want to get rid of the car before the lease is up?

if so, that's going to be very expensive (damage, mileage, trade loss, etc.)

likely the only way you could come out with less of a hit would be to lease or buy another honda.

mmarshall

You'll probably have three choices, then (assuming that the driver that hit you and ran off was never caught). Sorry to say, though, that neither one of them is potentially very good for your wallet. First, you can pay the body shop yourself for the repair (and rental-car, if you need one). Second, you can make an insurance claim and see if they will cover it (If it's been some time since the incident, they may or may not, depending on if you reported it to the police and/or if the damage is less than your deductible). Third, you can just leave the fender the way it is and (probably) have to pay an additional penalty when you return the car at the end of the lease-cycle (or if you decide to take it back early).

All is not lost, though, even if you still have to pay for extra wear-and-tear and mileage. There is probably no better teacher than experience. Leasing is not necessarily for everyone.....it obviously works best under conditions where the vehicles are not driven a lot of miles, well-cared for, and regularly parked inside in garages or in areas where damage from storms, accidents, etc....is not as likely. You will no doubt learn from this experience, know a lot more about your options and their consequences next time, and (probably) set you up, on your next car, for a far better experience.

Sulu

You still owe $230.32/month * 10 months = $2303.20 on your lease. You have paid out $230.32/month * 26 months = $5,988.32.

If you wish to buy the car at the end of the lease, you pay $16,322.31 plus any wear-and-tear and over-mileage penalties.

If you wish to buy the car now (and keep it or sell to CarMax), you owe $16,322.31 (end-of-lease buyback) + $2,302.20 (remaining payments on car) = $18,624.51.



40,521 miles would be about double the normal distance driven in 2 years (normal distance is about 12,000 miles per year or 24,000 miles for 2 years, and is likely the normal allowable distance on a lease agreement). If you did not pay up-front for extra miles, you will be hit with a hefty penalty for over-mileage. Extrapolating to lease-end in 10 months, you will have driven about 60,000 miles, which would be about 24,000 miles over the allowable. That will be a hefty penalty.

You have some "minor damages" that you clarified are due to collision damage that has not yet been fixed. You can either return the car "as-is" at the end of the lease and pay a hefty penalty for collision damage (and other wear and tear, which may include tire wear) or you can get the damages fixed yourself (either out of your own pocket or through insurance). Fixing up the car before returning it is likely to be cheaper than paying the penalty.



If you buy out the car now and sell to CarMax for $10,000, you still owe Honda $8,624.51. I do not know if the mileage and wear-and-tear penalties would apply.

Is this what you are thinking of doing -- buying out the lease and sell to CarMax (and get a new car)? If you do, you owe Honda $8600. That may be worth it if, by buying and selling the car now, you avoid mileage and wear-and-tear penalties. Penalties could be a lot for all the extra miles you have driven plus the collision damage.

bitkahuna

iTrader: (20)

if he buys out the car, not sure he'd owe any wear and tear as it's not the dealer's (or honda financial's) problem any longer.

chikoo

In order for you to sell the car to CarMax, you have to buy the car first. You cannot sell a leased car to Carmax.

LexBob2

That's my understanding too. You have to have a clear title for them to buy the car.

Their low offer may reflect the overall condition (damage) and mileage of the car. If they don't want to invest the time and money to get the car ready to put on their lot, they'll make a low offer and just send the car to auction.

NYKnick101

^^ THIS

I get what your intention was, thought you can make a cool penny off of the car selling to carmax BUT you do not own the car, Honda Financial does so you cannot sell the car to CarMax unless you OWN or the car is Financed to you. Lease means your just borrowing the car for X amount of time at a rate of X amount per month; just like a rental car.

So you will NOT get 7700 from Carmax (offer minus remaining payments.)

blacksc400

iTrader: (4)

? My understanding is Carmax can buy your car wether it's lease or still making car payments. You just have to pay the difference, or pocket the difference if the car worth more than amount owed.

GSteg

iTrader: (15)

http://www.carmax.com/enus/we-buy-ca...my-leased-car-

wasjr

If you exercise your purchase option (which is probably the 16k) then you will owe no mileage or damage charges.

Your lease will detail the allowed miles under the lease and the charge for excessive miles. It should also detail damage penalty provisions.

Another approach would be to price the cost of rolling your current lease into a new lease. I know with Acuras this can be done and excessive mileage charges are waived (I have a friend that leases an MDX for his business and at the end of year 2 of a 3 yr lease rolls into a new lease on a very favorable basis). If there is special lease rates or end of model year incentives, this approach may be your best bet financially.

You just need to go through the mathematical calculations and determine which makes the most sense financially.