In the market to buy a used car but don't know the dynamics of how you buy a leased car - it's a 2014 with 42k miles (more than the lease allows). If everything checks out and I buy it, does the owner have to do a lease buy-out first, show me the paperwork and then I buy it?
You'll have to post more details than that. What kind of car? It's normally a bad deal because one way for manufacturers to sell more cars is to offer leases with high residual values. You end up buying the car at least end at the agreed upon residual. This is typically higher than the retail/trade in value. That's why most people just turn their car in at the lease of the lease to the manufacturer and then the manufacturer auctions it off. If the car was worth more, they'd just end up buying the car for the agreed upon price and that means they paid too much for the lease if the car was worth at end of the lease. That only really happens if you leased a car and it was very low in mileage vs what they normally give you. In other words, without more details, this is probably a bad deal for you. The value of the car is going to be lower due to the higher miles and you've going to have to pay the lease transfer fee plus pay whatever the residual value of the car is. That's the fixed price. You can sometimes negotiate a lower price, but they usually just end up at auction. Look up nadaguide.com, you can normally find a car priced between clean trade in and retail. Places that charge more than retail are usually scam shops or buy here pay here type places that cater to people with poor credit.
You could assume the lease and then buy it out at the end. But looking at the car already being above the mileage the 'seller' would need to give you quite an incentive to make this happen. Also you would need to figure out the residual at the end of the lease. If you want to buy it rather then assuming the lease the current lease holder needs to buy it first and then sell to you. Or is the car already at the end of its lease contract and you just buy it from the leasing company? Then its just a regular used car purchase. So who tries to 'sell' the car to you?
1. Lease residual is based on the expected future wholesale value of the car. As was mentioned earlier, the official factory lender tends to estimate this value high in order to make the lease look more attractive. 2. The market for used cars is in the tank this fall. 3. The car in question has more miles on it than the valuation is based upon. 4. Lessee wants OP to save him from paying $0.20 per excess mile when he turns the car in, maybe get him out of a end of lease turn-in fee too. Good deal for lessee, but I'm thinking he'll need to sweeten the pot considerably in order to make it a good idea for the OP to step into his shoes. 5. If OP assumes the lease and buys the car instead of turning it in, somebody will have to pay the lease assumption fee and the OP will have to pay sales tax. 6. If lessee buys the car instead of turning it in, he'll pay sales tax on the deal, then when he sells it to OP, OP will pay sales tax on the same car (unless they live in a state without sales tax, or maybe they're closely related and the state has a family exemption to the sales tax...).
It's been 10 years since I last did this, but my in-laws bought my wife's leased car out about 10 years ago. In that case, I was able to negotiate down the price a bit (based on fair value vs. residual) and the leasing company was more than happy to accept a payment and put the buyout paperwork in my in-laws name rather than in our names. So this avoided the potential double-sales tax issue.
Much has changed in the industry in the last 10 years, so I don't know if this is still feasible -- and it may depend on the leasing company. They clearly don't want the car back, as they likely don't get the residual value from the dealers if they buy it to sell as a CPO vehicle. So if they can get residual (or close), they could sell it to anyone at that point.
lodak008 said: In the market to buy a used car but don't know the dynamics of how you buy a leased car - it's a 2014 with 42k miles (more than the lease allows). If everything checks out and I buy it, does the owner have to do a lease buy-out first, show me the paperwork and then I buy it?
In general, you can either assume the lease and do the buy-out option at the end or the current owner pays off out the lease and sells the car to you.
The deal already sounds bad because it sounds like the owner is trying to dump the car onto you because you have no idea what's happening. In general leases are either 10k or 12k miles per year. Assuming 12k miles and a standard 3-year lease that's 6k over * .20 = $1200 milage fee already, and the lease isn't over yet. You're also looking at new tires and you may be outside the free maintenance window. Plus you have the turn-in fee and a probably high residual.
My guess is that the other person should be paying you to take over the lease.
If you want to do it, find out what his residual, milage overage, and turn-in fee is, then search for a comparable car online and see how much it costs. I'll bet that you'll find a better deal at a dealership's used car lt.
Guys - the mechanic passed car with flying colors. It has one accident on carfax (someone rear-ended the car but it's very minor and fixed). If owners buys out lease from honda, he has to pay 23500 and CT tax (about 14 months left on lease). Seller wants me to pay first, he'll give me the car to drive with his plates and in a week, will pay off the lease and I'll get title in the mail. Given we will only have a bill of sale which really isn't an enforceable and binding contract, there is risk and I am going to offer giving him a small deposit of $200, he pay off the lease and then I pay him and we go to DMV together to transfer title over. Not sure he'll accept. Some other facts - it's a 2014 Odyssey with 45k miles on it now. all tires need replacement in 10k miles but that's about it. I have to still compare to sold certified car values in my area and come up with a good price that I should offer. Does anybody have a site where folks have posted what they got their cars for? I can send carfax and more specs via private message if you want to take a look
Like I said, you'll have to be a bit more specific. What exactly is the model? EX, LX, Touring? Then punch it into nadaguide.com and see what the price is. Normally you can get cars between clean trade in and retail at the dealer. Private party you can be between rough and clean trade in. Plus once you factor in the accident, take off a few thousand as it makes it less desirable on a resale. Not a good deal, you should walk or get a lower price. If you were to get it at a dealer, they do things like replace the tires and give you a limited warranty.
I agree with most people here...walk away. I just look at cars.com and there're many EX-L 2013-2014 with less mileage than this for around 21-22k asking price. I wouldn't pay more than 17k for this car with a major accident.
Well, the mechanic who took a look and I trust said car is in a very good condition. I usually keeps cars for a long time and given it has 45k miles now, I'll certainly be taking it over 120k at which point the value has lowered to a point where an accident or not will matter little in a resale. Again, the carfax is here. My mechanic said he would not have known about the rear collision if I hadn't told him but the carfax states both left and right rear were hit. I wonder what to read of that and what is the fair private party value for this car
jbmittermaier said: forbin4040 said: Rear Ended? Keep away...keep VERY far away.
This has too many red marks for me to say you are safe. Considering it was rear ended this does raise a major flag (Accident). I would pass
Don't forget that an accident (especially a rear end) will lower the value 33%. Why pay residual when Honda is going to let that puppy go for a lot less.
What are your credentials? I doubt you are a certified appraiser, and 33% is an unusual figure based on my time handling DV settlements. DV settlements vs what people will pay for a car with an accident listed on Carfax are 2 different things. Considering that both fenders the bumper and possibly the tailgate has been repaired. This car as been rear ended hard enough to impact the side fendres, most people will think frame damage upon reading this. I don't think any car dealer will want to touch it after it shows up on carfax. OP good luck when you try to resale that car.
I only see 'accident reported, involving rear impact with another motor vehicle, Left rear primarily damaged, right rear primarily damaged, functionality damage reported, vehicle disabled, vehicle towed, airbags did not deploy'
yes seller disclosed everything; not a friend. I'm only buying it because I think it's a deal at 20k that he may be ok to accepting. I'm not looking to take over someone's lease. I simply want to buy a nice used car and please send me a link if you see a used 2014 ex-l navigation with 45k miles online for this price. Thanks
Tiggerlgh said: forbin4040 said: Ok you want the car at $20k. How can the seller sell it for $20k when Honda wants $24k? Seller throws in $4k.
op there are so many red flags here I would run away.
What red flags are you seeing? The price seems low enough that it accounts for the accident. If you keep them long enough, it doesn't really matter when you go to sell it, accidents aren't a big factor when the selling price drops down to 5k or less. The owner sounds like they're paying the 4k penalty for the high mileage. Although if it's over mileage, you can usually pre-pay it and just turn it in at the end of the lease. Owner may be able to turn it in without paying as much as 4k.
henry33 said: Tiggerlgh said: forbin4040 said: Ok you want the car at $20k. How can the seller sell it for $20k when Honda wants $24k? Seller throws in $4k.
op there are so many red flags here I would run away.
What red flags are you seeing? The price seems low enough that it accounts for the accident. If you keep them long enough, it doesn't really matter when you go to sell it, accidents aren't a big factor when the selling price drops down to 5k or less. The owner sounds like they're paying the 4k penalty for the high mileage. Although if it's over mileage, you can usually pre-pay it and just turn it in at the end of the lease. Owner may be able to turn it in without paying as much as 4k. I don't see where the original Owner is coming out ahead after all the fees and taxes. This is why it's sounding bad. He could just turn the car in and walk away and pay the fines OR roll the fines into his next car. I think the car seller is looking to end up with at least 1000 in his pocket at the end of this deal.
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