Go ahead and say it-getting out of a lease

Yup, I'm a dumbass. Leasing my unexciting appliance of a base Honda Fit seemed like a good idea at the time. Walked in with nothing down, drove home in a new car. Sold my Much-modded Volvo 745t for something boring but dead reliable. Fast forward two years and I no longer need a reliable commuter. In fact the Honda sits all week, and any weekend nice enough to drive the Miata. This has kept the miles down, but that's about it. So now I'm paying for a car I don't drive.

By itself that wouldn't be enough to get out early, but a good friend passed away recently and his modded V70 is now available at a good price. I can't afford both cars so I'm going to try to sell the Honda. My buyout is $11,500 and KBB pegs the value at $12,700. So good there. A local dealer has one with 10k more miles listed for $13,900. It would seem this should be fairly easy, but I've never sold a car I didn't own outright.

I basically need to negotiate the sale, get the check, pay the lease off, and wait for the paperwork. Right? The handing over a large check and NOT driving the car home would seem like a huge leap of faith for most buyers. I'm worried that when I do find a buyer, the paperwork will take forever and they'll get cold feet. Has anybody done this, either with a lease or a bank-owned car? What should I look out for?

Thanks in advance.

This actually might not be a horrible time to go see the people at CarMax. I don't think it's going to get you where you need to be, but it's probably worth an hour of your time to hear what they have to say.

Can you have the buyer meet you at the dealer to do the transaction so they write the check to the dealer for the pay-off amount, any additional they write a check to you and the dealer signs the title right to them?

Disclaimer: I have never done anything like this so I am only guessing.

You are berkeleyed. I don't believe you can sell a vehicle you don't own, which is what a lease is really.

Only thing I can say is to pull out your lease paperwork and read it over for a solution. But I believe the only way to get out of a lease is to have it repo'd or at termination, more times then not or face a early termination penalty.

In reply to Junkyard_Dog:

What I did once was advertise the car to have the lease transferred. If you find someone that has good credit the peeps doing the financing should have no problem taking your name off the lease and putting theirs on.

Pretty sure I used the heading "for transfer of lease" or something close to that.

Good luck!

I have a loan on my Accord thru Honda Financial. If I want to sell it private sale I have to pay Honda to get the title. I can overnight the check in but it will be a few days for the title. As a buyer I wouldn't buy a car this way. If I am handing over $10,000; I'm leaving with a car and the title.

I too would shop it around to a few dealerships.

find a different honda dealer and talk to them. I just did almost the exact same thing with a kia forte. a different kia dealer bought it for the lease buyout which was about even with the trade-in price. I could have maybe made a little bit of money dealing with trying to find a private buyer, but this was waaaaay easier.

you can usually buy out the lease and sell the car. There are usually some fees associated with this. I would be suprised if your buy out(residual+remaining payments+fees) would be in the black. I'd also expect that a buyer would expect a good deal to compensate for the hassle, so prepare to be in the red a bit to get out of the lease. It isn't that big off a deal to do it and plenty of folks that buy cars with a remaining loan understand that they may have to wait a bit for the title in some cases. In some cases the holder of the title will be anle to produce either the actual title or paperwork that they present to new buyer transferring ownership while waiting for title. Your biggest difficulty will be finding a buyer in a crowded market for a price that will make you happy. Good luck.

Sounds like he already knows what his buyout is.

forzav12 wrote: you can usually buy out the lease and sell the car. There are usually some fees associated with this. I would be suprised if your buy out(residual+remaining payments+fees)

There are no fees when buying out a lease, its effectively treated as a simple interest loan by the lien holder. There are a number of legal/law reasons that they have to do this now. It was not the case 10 years ago.

Now depending on the state you can be liable for sales tax on the remaining lease payments but that would be factored into the payoff and it is very rare.

When selling the car its pretty simple you have them give you a certified cashiers check written out to the name of the lease holder. You send the check in, any value above the payout they send to you in a few weeks as a check.

CarMax though might be the best option at this point. They pay cash on the spot, and will give you the difference in check for right at the dealership. Plus they pay a pretty decent amount for low mileage honda's as they are a easy sell.

Junkyard_Dog wrote: I basically need to negotiate the sale, get the check, pay the lease off, and wait for the paperwork. Right? The handing over a large check and NOT driving the car home would seem like a huge leap of faith for most buyers. I'm worried that when I do find a buyer, the paperwork will take forever and they'll get cold feet. Has anybody done this, either with a lease or a bank-owned car?

Yes, I have done this and that is exactly what you do starting with a Bill of Sale. It did take a few days to get the paperwork and the finance company required a cashier's check. I gave the buyer the number of the POC at the finance company so they could verify I was doing what I said I was going to do. It does take a patient buyer, but you have a desirable car and it shouldn't be hard to find people willing to wait.

bluej wrote: Sounds like he already knows what his buyout is.

$11,500 as stated in the original post. Well under what similar cars seem to be going for. I'm not looking to get any cash out of the deal (not that I wouldn't take it!) but rather walk away clean. Honda lease transfers would end up costing me too much from what I have read.

I'm cleaning the car now and might stop by a Honda store and Carmax if they are open today. Parking out front and having a big sign with the sale price in the window couldn't hurt either, could it?

Your easiest solution is to have the dealer buy the car, as stated earlier.

If that doesn't pan out and you have a private buyer, some dealerships will do what they call a courtesy delivery for a small fee. It usually costs a few hundred dollars but the dealer handles the lease payoff and hands you a check. An added benefit is that your buyer has the ability to finance the car through the dealer's lending source.

I had someone assume the remainder of my lease on an 04 RX-8 back in 05. It cost me $50 to have Mazda run some paperwork at the dealer, and the cost of my ad on swap-a-lease dot com. It was painless, and not a bog deal at all. We also traded in my wife's Subaru that was on a lease several years ago. Leasing isn't a bad idea at all, but not for everyone.

With Honda, if you transfer the lease your name still stays on the car someway, somehow. Believe me, I've tried it. Don't go that route. Pretty much you are sponsoring that person to sub-lease the car and you can still be held liable for things that happen to it.

I've also sold a lease outright through Honda. It takes a few days and it's not as simple as having the lien held by a bank but they are very compliant and easy to work with through the process.

I would try CarMax as well. I mean you could post it on craigslist, with a warning that it is a lease buyout and it will take a few days. My experience with people who really want Fits, they will take the time. Especially if they don't have to deal with a dealership.

Well the selling dealership offered to buy out the lease and I walk away clean. I figured they would, as its a good deal for them. No auction hassles, the car is at their door pretty much ready to go. Taking it back after removing my V1 and personal items in 20 minutes. Didn't sign anything yet, so if they add on ONE DOLLAR out of my pocket I'll drive it back home and post it for sale.

Not bad for a spur of the moment bored on a holiday deal.

Thanks for the help!

Oh and a quick calculation shows I pretty much rented a new car for $7 a day. Plus an oil change.

Probably not a bad feeling, eh?

Junkyard_Dog wrote: Well the selling dealership offered to buy out the lease and I walk away clean. I figured they would, as its a good deal for them. No auction hassles, the car is at their door pretty much ready to go. Taking it back after removing my V1 and personal items in 20 minutes. Didn't sign anything yet, so if they add on ONE DOLLAR out of my pocket I'll drive it back home and post it for sale. Not bad for a spur of the moment bored on a holiday deal. Thanks for the help!

Good deal bro! I'm glad it worked out for you!

I was about to post up and say that. On both leases I've had through Honda I've had the dealership I purchased from call back a year or so later - ask how many miles are on it and they've offered to buy the car back. Took them up on one offer and that was the biggest mistake as I shouldn't have ditched that car!

Glad to hear things went well!

Wow not a bad deal at all. Gotta love that Honda (non) depreciation

Junkyard_Dog wrote: Oh and a quick calculation shows I pretty much rented a new car for $7 a day. Plus an oil change.

One year ago I was firmly in the "leases are stupid" camp. But there are clearly times and situations when the numbers work out, and the buyer stays ahead of the depreciation curve. This appears to be one of them.

jg

When I worked at a VW dealer we almost always bought cars out of leases instead of having people turn them in. I also used to send everyone with a halfway decent Honda to car max, they'll pay a fortune for accords and camrys and stuff. Got people out of leases early all the time that way.

If your fit is low miles, automatic, and in a decent color I'd head to carmax the next chance you get, you'll probably be surprised what they'll offer for it.

You can call honda financial or whatever lending institution owns the lease and ask them what your payoff is. Generally you'll have to pay tax on the remaining part of the value that wasn't included in the lease as well.

Well. That was easy. Didn't make a dime, but did basically what I was going to do a year from now anyway. The Fit served its purpose, but I was never going to keep it.

Life is too short to drive boring cars.