Hi all,

First off I am stupid that I gotten myself into this big hole. That being said, here is my situation.

I started an RDX (with Tech) lease back in August 2006 when it first came out. It was meant as a surprise gift for my wife while she was out of the country. Of course she loved it and everything, however the price that I agreed to was higher than I would have liked. Given that I had just bought a house a few months earlier, my credit was shattered, I was told that I can get a 48 month, 1000 mile lease (but it's basically a 36 month since you can walk away after 36 months?) but because of my credit it will be for $800. I was thinking "get the hell out of here", but to make a long story short, I got suckered into a lease for $750/month for 48 months. I was eyeing this car for a long time since my wife used to have a CRV that she liked back when we were in college, and because I am just stupid like that.

So my question is this. Nowadays inventory is nice and high for these cars, and the lease rates are getting lower and lower, like the $399 lease special that one of the board members have posted. It literally pisses me off how much I am paying for this right now. My parents lease a Lexus GX for $100 less!?

So basically I want out of this lease, even if that means I pay a BIG chunk of money on my way out. If I can get a reaosonable lease for something else, I am sure it will save me in the long run. How much can I expect to pay as an early termination fee? Does it help if I am going to buy another Acura instead?

The CRV that my wife used to have was leased, and we terminated the lease early. We paid the difference between the payoff quote and the "estimated value" of the car, and off we went.

Any feedback, comments would be great. Thanks in advance.

 

Sorry to tell you this but you're stuck. Typically in order to get out of your lease, you'd have pay the sum of all your remaining payments. In your case that would be roughly $31500. Plus you may have to pay an early termination fee. Check your lease contract. After this is done, you give the car back to Acura, if that is who your lease is through, and you walk away with nothing but a $32k hole in your pocket. Or you pony up the risidual value of the car which is probably another $21k+ and drive away in your $35k RDX that just cost you $53k plus the payments you've already made. The only way you wouldn't lose all this money is if you found someone to take over the lease for your high payments. Not likely since the RDX is selling for so much lower now than when you leased. See lease trading....

I'd recommend sticking it out on your current lease....

 

Option #1 - light it on fire
Option #2 - leave it running with the keys in it in a bad area

Other then absolute destruction of the car, you are stuck with it.

 

Sorry to hear about your current situation. I have leased many vehichles for my company. First I would need to know who it is leased through as far as being able to tell you the best way to get out. For instance American honda finance corp. is great. I have an MDX leased through them with a .0020 money factor. I pay all my leases and loans through them on line through ownerlink. I can go online today and get a payoff and that is what is owed to keep the vehicle and by out the lease. The lease on the MDX was cheaper than the finance rates at the time so it was smarter for in my case. If you financed through AHFC you can sell the car or trade it in and pay off the lease just like a loan. For instance the MDX is a 42 month lease and we owe 32500 right now. I can call and confirm a payoff woith them wich will probably be a about 33000 with interest good for 10 days. You should be able to get out of it just like buying out a loan with no penalties depending on who it is leased through. All these leases are hard to get out of is horse crap and a thing of the past. Consumers flip cars so much and the manufactureres started offering easier ways to get out of leases so the industry has followed to compete with the car manufacturers lease plans. Now what will hurt you on this is what your money factor is and what your total purchase price was. Good Luck

 

Easy is subjective imho. The only way to know for sure is to read the contract. But I am fairly certain that there will be no inexpensive way to turn the vehicle over -- ie you can't just drop the car off and stop making payments. The contract he signed obligates the leasee X amount of dollars, and the finance company will get it's money. I'm going on memory here, but I remember that the early termination fee and/or payout is either the balance of the payments, or a percentage of remaining fees + penalties -- of course the leasee is responsible for whichever is higher.

In all seriousness, the only way to get out of a lease is a) the finance company releases you b) somebody assumes the lease c) the leasee pays the balance due to meet the obligations set forth in the contract. I was only semi-joking when I said light the car on fire, this was a practice followed by many to get out of a lease.

 

One more thing money factor is interest on the lease. The higher the money factor the higher the interest. Some lease money factors consumers get stuck with easily exceed 10%. Allot of people who lease dont even now about it. Also when you lease through american honda for instance you get gap insurance included as well as 1000.00 damage allowance upon turn in. Your vehicle can have up to a thousand dollars in damage at lease turn in and you do not get charged. (A smashed in bumper.) Leases can be great if you know what your getting into. People bash leases to much because they are not informed how great than can be. Also dont ever put money down on a lease.

 

What can be done is you can take out a loan to buy yourself out of the lease, or you might be able to get an Acura dealer to take the car in if you purchase something else from them. In either case, your best bet is to call the finance company and read your lease agreement very carefully.

Not to kick you when you are down, but $750/mnth is absolutely brutal for a 3yr lease on a mid-30K car (comes out to 27K!). Nobody suckered you into anything, next time understand what you are signing. It's very easy to get yourself into bone crushing debt over a car. Remember anyone can sign the papers, but not everyone can make the payments.

 

He may have to light the car on fire if is interest rate is through the roof. He could have a payoff of like 47k. We need him to tell us some numbers. Start going out and leaving it parked running.

 

Thats the point I was making. Leases arent all that bad they get cracked up to be. Its uneducated consumers who fall victim to bad deals. 750 a month would be fine for say a 1 year 20 thousand mile lease but thats about it. But still that is too much.

 

wataru210:

Try here: http://www.swapalease.com/

My buddy just got out of his Jag XKR lease using swapalease.com, sometimes you get lucky.

You might have a case for malfeasance against the dealer, it sounds like you were really taken advantage of - unless there is an element of the story that you did not disclose - like you traded in another leased/upside down vehicle that they added the balance to your current lease.

.

 

I generally lease -or- finance, depending on what deal is better. Leases are a bit more complicated to understand, but if you are educated about them you can compare them directly to a finance deal and choose the best option. I got 0.00073 money factor on my S2000 lease, and it was way better than any financing option on the planet, hence I went with the lease. For my RDX, the 3.9% over 60 months was a better deal than the lease option, so I financed.

The downside to leases is that they are often used as a tool to trick buyers into "affording" a certain vehicle that they wouldn't be able to finance. That is where the trouble starts, this case being a prime example....

wataru210: I believe you can probably trade in the RDX or sell it (to CarMax for instance). The dealer would pay you the difference between the value of the RDX and the lease payoff. This will almost certainly be negative, meaning you will owe them money. But it's the only easy way out of the deal I can think of. Seriously look at CarMax -- they will likely give you the best price on the vehicle. Be prepared to take a hit, potentially big. Let us know how it works out.

 

Yeah, I think buying it out and selling it privately is probably your best option. But as c_hunter mentions, you'll have to be prepared for a hit.

 

This is a good thread. I have learned a few things about leases and money factors with this thread. One thing you may wish to also try is to talk to the finance guy or salesman where you bought your car.

I do not know your entire situation such as whether you want to go to a cheaper car or just get rid of the RDX. The dealer MAY buy out the lease from you, however, you may be hit with a loss of 20 to 30%. If you are looking to trade your RDX on a different vehicle, the dealer will likely try to work with you as much as possible, keeping in mind that he has to be able to sell your trade at some profit.

 

Let's say carmax would give him $32000 for it which is probably pretty high. Wouldn't he still have to pay the residual value of the vehicle in order to buy out the lease, and sell it to someone else? Which in this case would likely be well over $20k figuring that the residual is around 58% of the vehicle which he likely leased for full MSRP if not more.

 

Thank you everyone for your feedback.

My lease is through Honda Financial, and my payoff is currently $39k. Even if I can get myself into a trade situation like rdx4fun says, I am gonna get hit $7k just for trading it in. That's rough. I have contemplated trading in my recently paid off Infiniti FX and using that credit to get into a lease/finance situation more "worth it," even if it costs me the same $750 (an MDX maybe?).

I have always looked at CarMax, especially when I used to be in Chicago, but now living in PA, there aren't any around. Otherwise I would drop by just to get an estimate.

Dear F.Rizzo, I have looked at swapalease, but the highest monthly payment there is like $300 less than mine! Regarding malfeasance against the dealer, I had a Mazda 3 trade that I owed some money on, but I paid the bulk of it up front in my down payment. Maybe $1k carried over to the lease, if even that.

Once again, thanks everyone for your feedback, I will update again regardless of whether I go through with it or not, just to see what type of numbers the dealer gives for a payoff.

 

Just as an FYI, Honda Financial/Acura Financial Services do not allow transfer of leases. Thus, sites like swapalease.com or leasetrader.com are worthless for Honda/Acura leasees. What you're seeing, at least in terms of Acuras and Hondas, on those sites are dealers advertising their lease deals, not private parties.

 

Why dont you refinance it into a loan and try to hold onto it for 2 years. If your credit is above a 600 you could do about 7% for 72months and have a payment of 664.91 a month on 39000. Even if your credit is poor you could get say 8% for 72 months and a payment of 683.80. That saves you allot of money every month and also you will be paying down allot more of the principal than in the lease. I would not sell it yet. You will get about 29-32k for it right now. Sasair is right too much of a hit.

 

The residual value is adjusted and included in the payoff on a lease. Its just a number to put in the backend that adjusts the money factor and amount allowed to finance on the lease as well as the amount that the vehicle will be worth at the end of the lease.

 

Although I would need to see the lease and look at the clauses for sure, I don't believe you can just pay of the value of the car. The leasee is still responsible for the payments for the term of the lease, in effect that is what the contract between leasee and lessor is for. The contract most likely would not have a "buy it now" option that releases the leasee from monthly payments to the lessor.

If op wants some solid help here, he should post the flipside of the lease which states all the clauses, including early termination. Barring seeing the actual clauses any advice here is pretty much a shot in the dark.

 

You can pay off a lease just like you can pay off a loan (at least from AHFC). Every lease statement has a payoff quote. This covers the residual plus remaining payments on the lease. Basically, it would be the "buy it all now" price, akin to if you made all the payments over the lease term and then bought the car for the residual at the end of the lease. Normally, people only do this when they want to sell/trade out of the car. There is no real advantage otherwise.

 

From the sounds of it, the refinance into a loan sounds good. My only gripe is the monthly payment and the fact that I will have nothing to show for it at the end of 3 years. If I can make that monthly payment less, AND have something to show for it at the end of 3 years, that is a good situation. I mean, I absolutely enjoy the car.

That being said, I am not able to wrap my head around the entire situation.

rdx4fun, would you be able to give me a "for dummies" explanation for how the above case would work? For example, maybe some type of comparison between the lease and the 8% 72month finance, in terms of how much more principal I would be paying off in a finance situation, and if I would be looking at having equity in the car after 3 years?

Sorry if what I am asking is totally retarded.

I would appreciate the help though, thank you.

 

Assuming you pay 664.91 mnth that means in 36 months (3 years) you will have paid $23,936.76 on the loan and will still owe $23,936.76 on the balance of your 72 month loan. This means that if you sell your car for 30K -- you will still have a 16K balance on the car, thus you will be "upside down" (your loan note will be worth more then the car). I don't see how this is good solution at all.

I would suggest before you do anything you grab your lease agreement and find the clause for termination and/or buy-out and paste it verbatim here.

 

As others have said, your SOL.

All lease contracts have an "early termination" clause which nearly always has a token fee for the service. In essence, you'll be required to pay the "fair market wholesale value" (plus early termination fee) meaning you'll need to effectively "sell" the car in the wholesale market. The dealer makes money on this. You WILL take a HUGE hit.

Second, you got screwed. $750/mth on a 48 month lease..... they saw you coming. I bought mine at the high end accessories price with nothing down and I pay a few dollars more on a purchase and at 3.9%! My suspicion is your sort of "stuck" for another 2 years or so equity wise.

Lastly, I'm confused as to what you mean by your credit is "shattered" for buying a house. ??

In any event, best wishes and good luck!

 

i'm sure you can get out of a lease... because i got a 05 TSX back in 2004... i was 2 yr in an 4yr lease and i got a RDX in October 07.... besically the just take the buy out value of my lease (i need $29,000 CDN) to pay off my car... and they only offer me $27,000 to buy my car from the dealer (trade in value)....so i have to pay a difference of 3000 to get out of the lease and get a new car...... there was no penalty for early termination for the lease....

I'm sure you dont' have to go back to an Acura to get the deal... the dealer just want their money for the car..... just call them and ask them what the buy out for your would be... and try to get a trade in close enough so you don't have to dish out too much money for the difference....

 

Wow, I have read your situation, and I would have to say that you are basically screwed!

With that being said, here are some options:

1. This is a total longshot, but you are so f--d why not try this. Call AHFC and explain your situation and see if you can re-negotiate the terms of your lease. They will most likely laugh at you, but it is worth a try.

2. Buy out the car for 39K, finance for no longer than 60 months, and plan on keeping the car for a good long time.

3. File for Bankruptcy protection and screw your credit for the next 7 years, stop making payments and have the car repossessed.

4. Keep making payments on your lease and track the pay-off amount, eventually the lease will either end, or the market value will be closer to the pay-off.

5. No matter what you do, make an appointment with a financial planner and start getting smarter about your financial decisions. And please learn more about leasing before you attempt to lease again. I have been leasing for years, and each time i learn something new that helps me make the next deal better.

Good Luck!

 

Are you sure you are on a lease? $750 x 48 months = $36k, which is close to MSRP. Perhaps you really financed for 48 months instead of leasing?

 

He said he had a negative equity situation when entering. It would be interesting to see that contract to see exactly how they did the numbers. Any negative equity would be pure capitalization for depreciation purposes.

 

Can someone explain to me what the "money factor" is when pertaining to leases?
Also, what do you do to compare a lease vs. finance for a car to see which is better?

I've had my way in the past, but am wondering if there is a better way, plus I've never heard of the money factor, so I'm sure I'm missing something.
I don't see anything wrong w/ leasing in general, however it seems that a lot of people think leasing is a bad thing. I think the only time it is bad if someone leases just so they can get into a car that they wouldn't be able to afford the financing on. ALso, if you want a new car every 3 years or so and don't mind paying a little more in the long run (years and years or different car ownership), it's not a bad idea.

 

money factor is the lease equivalent of the APR of a loan.

Money Factor: Also called a lease factor or even a lease fee, this is the interest rate you are being charged. It is expressed as a multiplier that can be used to calculate your monthly payments. For example, 7.2 percent interest, when expressed as a money factor, is .0033. To convert a money factor to an interest rate, multiply by 2,400. To convert an interest rate to a money factor, divide by 2,400. (Always use 2,400 regardless of the length of the loan.)

 

sasair is dead on about the money factor.

There is a very good site explaining auto leasing:
http://www.leaseguide.com/lease01.htm

I should have thought about leasing before my purchase, but I've always thought leasing was "the devil". This thread had got me curious and the above site taught me few things about leasing I did not know about.

I will certainly look in to leasing on my next purchase.

 

Thanks!!

I also use to think leasing was satan, however I checked up on it, and since I've leased some cars and it worked out well (actually I'm leasing the RDX)

 

Just looked over that site, and it's fantastic! Thanks for that!!

 

I wasn't into leasing either until I talked to one Acura Salesman who told me that with all the technology in the car, you won't want to own it in 5 years. Tech changes so fast that the car will seem old. He also told me that if you crash the car really bad, but it isn't totalled, you just fix it with insurance money and hand it back in after 3 years no questions asked, no penalty. If you were to do that with a car you purchased, the value of the car would be severely diminished at resale. I also don't want to own Acura's first turbo experiment. It'll probably last a long time, but you never know.

I think that leasing is ok for the reasons I've listed, but isn't so good if your are doing it to drive a car you can't afford to buy. I've seen people get into trouble going that route.

 

The problem with leasing the RDX right now is that their lease deal is not great. The money factor is kind of high.

 

Don't take this as criticism, but you should NEVER let the salesman or finance guy recommend one alternative or the other. The dealer will always try to steer you in the direction that makes them the most money. You need to evaluate the options and decide for yourself on solid quantitative financial grounds. I think the reasons they gave you are tenuous at best -- they make it sound like you should always lease, and that is most certainly not the case -- doesn't matter how techy the car is or if you drive it off a cliff and fix it as good as new. I could apply similar arguments to support financing as a better alternative.

 

1. The salesman that gave me the advice wasn't the salesman I ultimately bought the car from. There was no pressure.

2. It IS a fact that in 3 years, the 2007 technology in this car will be dated along with the technology in every other 2007 car.

3. I'm not willing to gamble on the first year turbo after the warrantly expires. My decision.

4. I never said you should always lease.

5. I just sold a car that I drove for 11 years. The RDX isn't my dream car and was the best of what is currently out there for me. But I didn't want to jump into another long term investment right now. And unlike some on this board, I don't think purchasing a new car every 2 years is a good financial decision.

 

Here are a few good guidlines to follow if you are considering leasing. They are just guidelines.

1. NEVER lease a car you can't afford to buy.

2. NEVER have negative equity applied to a lease. (or purchase for that matter!)

3. NEVER lease a car for more than 39 months.

4. Do not lease if the money factor is greater than 0.0020

5. Do not negotiate the monthly lease payment. Negotiate the cap cost and money factor. Ask the dealer to see the resdiual value chart for your car. Don't trust them to give you the correct residual.

6. Try not to put any money down, includung the "up front costs".

7. Remember, the dealer always wins. The dealer will always make money on the deal.

Please feel free to add to this list, I would like to get it to 10 easy bullet points.

 

I big time agree w/ the no money down....it amazes me that dealers try to fool people w/ their commercials on tv saying how "you can lease this or that for only $250 a month!", then you look at the fine print and the down payment is $3500!!

I leased my RDX non-tech w/ the chrome wheels (came out to be about $35,000 after tax) for 36 months, 12,000 miles a year, NO money down, and $460 a month. THe first quote they gave me was $650!!

 

Is this something that AHFC regulates? I was trying to get out of my RSX Type-S about a year ago and posted it on leasetrader.com. I actually got two replies but ended up just finishing out my lease. I didn't know you couldn't do this.