My First Lease: A year later.. I have a few questions

[ericc191]

Hi everyone. I leased my 2013 Si Sedan a little over a year ago in May 2013. I could really use some insight into the world of leasing, however. This was my first lease, and to be honest, I was so giddy and excited to get that new Si that I didn't really put up much of a fight with my lease terms.

My plan was and hopefully (depending on the info. I collect in this thread) still is to go ahead and keep paying this car after my 3 year lease is up until I own it. I went into this knowing this would be my car for the next 7-9 years.

So what I would like to know is:

1. Does the money I pay monthly towards my lease go towards reducing the final cost of my Si once my 3 year lease is up?

2. Can I switch from a lease to a financing agreement now/during my lease or must I wait until my lease is up?

3. If I decide to wait for my lease to be up, would I have a chance at getting a better deal than trying to finance it mid lease (if this is an option)

4. How does the Payoff Calendar work? When I tried checking to see if my final cost goes down for the next month, it went up $80 instead. I'm assuming this is because of interest?

Any help would be appreciated in helping me determine if I should keep the car or turn it in. Thanks!

 

[andre12dbsi]

If you look at your contract you should see the residual value. This is what you'd have to pay if you want to buy the car when your lease is up. This value will not change as you pay down your lease term.

It's probably not worth to finance the car now as you'd have to buy it out. This means the residual plus your remaining lease payments. It's probably not worth it.

I'm not sure what the Honda US finance site is like but here in Canada you can log on to the Honda Canada Finance site and it will tell you what it would cost to buy your car outright at that particular time.

I hope this helps.

Edit: I just looked at your screen shot. It shows the price if you wanted to buy it out right now. It would cost you around 21K.

 

[ericc191]

So when my lease is up, I'll still have to pay 21K if I wanted to buy it? That's insane lol.

 

[andre12dbsi]

No. That 21k is if you wanted to buy it today (or whatever date you put in the calendar).

There should be a residual value either on your contract or the website itself. That's how much you'll have to pay when the lease is up. It's usually around 50% of the original price of the car. The rate can vary but I'm guessing it's close to that.

 

[ericc191]

Okay, so let's say it's 55%. Would 12,925 seem like a decent deal on my car which will have around 40K miles on it at that time.

 

[andre12dbsi]

It's probably around that number. If you see what the market is for a 3 or 4 year old Si, it's likely a pretty good deal. I'm not sure what the market is in the US though.

 

[ericc191]

Alright man, thanks for the help. I misplaced my contract so I can't find the residual value.

 

[andre12dbsi]

No problem. Check your numbers to be sure. The residual values could be different in the US. If you call Honda they'll have all that info too.

 

[ericc191]

Okay, I'll call them tomorrow and cross my fingers for good news.

I suppose it wont be the end of the world if it's like 16K. I'll just take the only thing I've changed to my car off (catless downpipe) and slow it down on the miles I'm accumulating so I come in around 36K miles at the end of lease. Then I'll get a new car, but make sure I have all the information and do it right the second time around, hehe.

 

[Monk]

I'll keep an eye on this thread, I'm in the same boat(except I've had mine for 2 years). My car is doing very well with 25k on it, and I told myself when I started the lease, was if it's near perfect at the leases' end, I'd just buy(re-finance to buy).
As it stands now I'm going to buy(as I have all my life, just about all my cars have been bought new(exception 2) since 1962. I don't know to this day why I went with the lease........ It sounded good at the time, but I wish I had just financed from the start, it just bugs me with some of the petty limitations of leasing(mod's, personal plates, etc.).

 

[andre12dbsi]

There's a difference between Canada and the US. We can have personal plates on the car even if it's leased.

Leasing definitely isn't for everyone though.

 

[Monk]

There's a difference between Canada and the US. We can have personal plates on the car even if it's leased.

Leasing definitely isn't for everyone though.

I'd say it's more the leasing company that's controlling the "P-Plates", I can jump though some paper hoops to get PP's, but I hate messing with that kind of stuff. Too many lawyers!

 

[andre12dbsi]

Yes. Lawyers for personal plates does seem like a bit much.

 

[ericc191]

I'll be contacting Honda tomorrow about it and get all the details. As long as it's less than 13500K to buy after my lease is up, I'll keep it.

 

[ericc191]

Alright so my residual value is going to be $14800. $1300 more than I was hoping for. I can refinance now, but I'd have to find my own credit union or bank for that. I suppose I'll need to see what the market value for the 2013 Si is when my lease is up and make the decision that way.

And the final cost of the car would be around 27-28K.

EDIT: I looked at some 2011-2012 Civic LX and EXs with around 40K miles on AutoTrader and surprisingly a lot of them in my area are upwards of 16K. I guess that's good to know.

 

[Danglyzoidberg]

I would not recommend buying it out early. I see you are in a 36 month contract which (In Canada) would mean you are either paying 0.99% interest or possibly 0.01% (with loyalty) If you were to opt to buy it out early and finance your buyout amount you are usually looking at somewhere in the ballpark of 3.99% or more meaning it will cost you more $ in the long run.

 

[ericc191]

Yeah, that's a good point. Thank you. I'll wait till the lease is up and then finance with a credit union for lower interest rates.

 

[ericc191]

Also, I still have to pay $7715 until my lease is up. If I add that to the $14800, it's $22515. As opposed to me financing now at $21700, like you said I'll have a higher interest rate which will cost me more in the long run?

 

[Abbz8377]

I worked for Honda for 3 years deff. wait until the end to buy it. I leased mine and the buyout is right around 12k I can promise you will not find a 3 year old SI for 12 or 13k even if you hated the car you are better off to ride the lease out until the end buy it and you can turn around and sell it for $15 or $16k it's rare for an SI to come in on trade or for someone not to buy it if they leased it.

 

[Abbz8377]

Just a fun fact i thought I would put out there that kinda gives everyone an idea of how good the residual values on the SI are. I will use Mazda for an example on the Speed3 they do not even offer a lease option because the car has such a low residual value after 3 years. So the next time one rips by you just know he might be a little faster but your SI is still worth a whole hell of a lot more in the end : )