Honda Finance/Lease Question

[sputnik]

My wife and I have a 06 Honda Accord that we currently lease (23 months left on the 48 month lease).

How hard is it with Honda to break the lease and trade the car in for a new model? We are considering a new 08 Accord if we can keep the payments close to the same.

Our car is also about 10,000 km over our mileage allowance, so will we get screwed by that (more than the typical 10 cents/km)?

[SilverRex]

hmm when I lease my acura it was with honda finance, I presume they are the same?

from my dealership, I have no penelty breaking the lease as long as I am equal or positive equity.

being at 23 months left, you may be down alittle, according to my dealership I wasnt brek even until i hit my 4th year,

why not try selling it private, you should get more.

and how do you get 10k milage more? I thought as long as your total milage falls under the total milage given at the lease end,

unless your total now already exceeds your total at least end of 23 months.

[max_boost]

You can break the lease at any time. If you have an amortization schedule, take a look to see what your buyout is or call Honda Canada Finance and get your remaining balance as of today.

You should sell the car privately if possible because I am 99.9% positive the dealer trade in value is nowhere close to your buyout.

The mileage only comes into effect at lease ends when you plan to return the car.

[benyl]

You are guaranteed to be upside down. Especially with the new model out now.

Your buyout is this:

Take your monthly payment * number of months you have left.

Take your buyout + GST on the buyout amount.

Add the two together.

So, if you have 23 payments of $400 (incl GST) and a $15K buyout, you have to pay HCF $25,100. Chances are, your car is worth less than this amount. In this scenario, it is probably worth about $20K. The dealer might even give you less for it.

So when you go to buy your next accord, you have to pay the price of the new one + what you owe on the old one.

For a 2007 EX-L, it is $30,800 + $5100. So your new car will be $35,900.

Since you are trading in a car, the GST on your payments will be much lower than 6%. I am not sure how that works.

You new lease would be based on the this price, but your residual would be based on the MSRP. So, you amortize the negative equity of your old car into the new payment, but you also now pay interest on that $5,100.

[max_boost]

Originally posted by benyl
You are guaranteed to be upside down. Especially with the new model out now.

Your buyout is this:

Take your monthly payment * number of months you have left.

Take your buyout + GST on the buyout amount.

Add the two together.



You shouldn't be bound to make the remaining interest payments if you end your lease early. I've leased a few cars and paid them off early and never had that issue.

[max_boost]

sputnik, if you know the terms of your lease contract, put the info into this calculator and get your balance for the 25th month. Take that amount and add the GST. That should be very close to what HCFI should be quoting you.

http://www.tcalc.com/lease-payment-calculator.html

[benyl]

Originally posted by max_boost


You shouldn't be bound to make the remaining interest payments if you end your lease early. I've leased a few cars and paid them off early and never had that issue.

Depends on your lease contract.

Most leases require you to pay out the interest as well. High end leases like MB maybe different, but I am pretty sure HCF locks in that profit for HCF.

[sputnik]

Honda Canada Finance allows me to buy out the lease at anytime without any penalties.

[max_boost]

Originally posted by benyl


Depends on your lease contract.

Most leases require you to pay out the interest as well. High end leases like MB maybe different, but I am pretty sure HCF locks in that profit for HCF. I'm not sure about MB, never had a lease with them before but no penalties with BMW or Honda.

[benyl]

What you guys think of a penalties are different than what I am explaining.

Paying out the monthly payments is your lease obligation under contract.

A penalty would be having to pay $1000 or some amount to buyout the car on top of the remaining value of the car.


Here is the contract that Sputnik signed:

http://honda.ca/NR/rdonlyres/eznxol36vmk676bhhhrblizdbcozingucggyb2iguirfngvfel4i4gxcewqv2qvqgiyp4amnecnz6h/HCFI0207VLA1038EABBCONHFSlogo.pdf


17. EARLY TERMINATION
(a) If you wish to purchase the vehicle prior to Lease maturity, and you are not in default, you may do so at any time without penalty. In order to purchase the vehicle you must pay us:
(i) the remaining Monthly Payments,
(ii) PLUS any other amounts due under this Lease,
(iii) PLUS the Purchase Option Price,
(iv) MINUS the unearned Lease Charges,
(v) MINUS any portion of the Security Deposit remaining after deductions permitted by this Lease (if any), and
(vi) PLUS any official fees, taxes and costs related to the registration, transfer of ownership and certification of the vehicle.
(b) If you wish to terminate this Lease prior to maturity and you do not purchase the vehicle, you must return the vehicle to the Dealer or a place specified by us and you must pay us:
(i) the remaining Monthly Payments,
(ii) PLUS any other amounts due under this Lease,
(iii) PLUS excess kilometer charges determined in accordance with Section 8,
(iv) PLUS the cost to repair or replace any damage to the vehicle as outlined in Section 15,
(v) PLUS the cost of any necessary maintenance and repairs as outlined in Section 14 (whether they are made or not) to put the vehicle in good operating order due to excess wear and tear and to comply
with provincial safety laws,
(vi) MINUS any monies received as premium refunds by us under any insurance incorporated into this Lease.
(vii) MINUS the unearned Lease Charges, and
(viii) PLUS any official fees and taxes imposed in connection with the early termination of this Lease