fletch140

My current lease on a 2008 TSX is up at the end of this year. I'm trying to lease a 2010 TSX right now, trading in my '08 TSX and using any positive equity from the 2008 to take out any potential down payment on the 2010. However, the dealer recently told me that I was upside down on the lease, saying they would only get $16,500 for the '08 TSX at auction (where the payoff amount is just under $18,000).

The $16,500 market value seems awfully low to me. It's a 2008 with 31,600 miles, silver exterior, black interior, auto transmission, no nav (just base model), and normal wear and tear (minor paint scratches and bumper dents).

Does anyone have first-hand experience in knowing the market value of a car like this (dealer auction, 3rd party, etc.)? Any info would be much appreciated as I would really like to avoid a down payment on a 2010 TSX new lease. Thanks!

Jimmy The Saint

i don't have any info - but if this is the same dealer you leased the 08 from, I am really surprised they won't help you out if you are trying to lease another car from them.

That said, it wouldn't hurt to check KBB prices on your car to have an idea - auctions are lower but with your miles I bet they would CPO it and sell it - not auction it.

fletch140

Yes, I'm a bit surprised as well considering it is, in fact, the same dealer and i would expect them to sell it on the lot considering it's condition (they currently have an inventory of those on the lot with over 40k miles and selling for close to $22k).

Simba91102

Do you really need a new car? For that payoff figure, maybe you should consider buying the car. If you chose to finance it (not my first choice, but I realize it's more popular), I'd guess your payments would be lower and in 3 years (or 4, or whatever) you'd own the car. And with your apparent mileage habits, the car would still be relatively low mileage.

fletch140

I have considered it, but versus a $300/mo lease, financing the purchase is more expensive by a good bit. I'd rather have the cheaper monthly payments now.

jchan2

I highly doubt the dealer would auction off the car. Chances are they will clean it up a little bit and sell it as certified pre-owned.

And $16.5K sounds rather low. take the car to CarMax and see what they will buy it for.

'08 TSXs are still relatively expensive; that was part of the reason I went to an '07 earlier this year. When I shopped, there was maybe a $1500 gap between comparable 2007s and 2008s with similar mileage.

If you want to maximize your down payment on a new lease, you could try selling it yourself. Clean it up a little, give it a good wash, and post a for sale sign on it and see what kind of interest you get.

Itchytoe

You got lowballed. They'll sell that car for 22 easily.

You also can't sell the car, you don't own it. Best you can do is find a buyer for it and facilitate the sale between the buyer and whoever owns it.

Honestly, you can't afford a TSX. Constantly turning over leases and re-leasing something because it's cheaper than buying will get you into some serious trouble down the road. It's not really cheaper to do what it looks like you're trying to do.
You do have an advantage right now. Since they've admitted they're going to get 16.5 at an auction, offer them 17.5 to buy it. At that price it would be a steal.

fletch140

Thanks for the feedback everyone. Yea, I realize now that the car is clearly worth more than that and that most dealers would just certify it and sell it on the lot for 22-23k.

For buying it, the residual is approx $17k anyway, so if I wanted to buy it out, I would just do so at that price.

I realize that leasing is way more expensive in the long run versus buying, that is, if you continue to lease indefinitely. But, having the cheaper monthly payments (versus loan payments) now while I'm young is allowing me to save the extra amount I'd be spending on monthly loan payments to put towards other larger expenses that I am expecting in the short-term (3-6 years out). At some point down the road, I will finance a purchase, but right now, I enjoy relatively low (and affordable) monthly payments on a nice car.

Jimmy The Saint

you are still wasting money. Should buy an inexpensive car and save. Buy it out or turn it in and get an 06 civic and deal with it.

Boulder TSX

I agree with Jimmy. If you buy a car with payments you can afford, (this TSX or something else), you have something to sell in 3-4 years. (And several thousand dollars to put in your pocket.) If you lease, you have nothing. And since you mention you expect larger expenses in the next 3-6 years, that extra money might come in handy.

fletch140

Point taken. The way things are going with the dealer, I may end up buying it out anyway as he won't budge on the trade-in value of my car (he told me that they can buy it for 16,500 at auction and it would cost another 2000-3000 to certify it.....they'd list it at 23,000 on the lot and sell it at 21,000.....i highly doubt it would cost 2000-3000 to CPO this car, but i guess i understand why he wouldnt give me trade in value if he can just buy it for 16,500 at auction).

That being said, does anyone have access to or know the most recent Manheim auction value for this car (2008 TSX, 32,000 miles, silver ext, black int, base model-no nav, automatic trans, normal wear, minor paint work)?? At least I can see if I'm being hosed, or can get a sense of wear to negotiate the buyout.

Thanks again for all the help....this has been a royal pain so far.

Boulder TSX

I agree with you about the CPO process probably not costing the dealer $2,000-3,000. (It may be possible to argue it is worth that, with the process added to the warranties, etc. but the CPO-related servicing of a car like that should not require much.) Interesting that he would readily admit that they would list the car $2,000 above the expected sale price. (It would take some real work to get him to admit that if you were an interested buyer.)

I'm not up on the latest Kelly blue book values, but I think the buyout price sounds good. (I was actively looking this past year for used 2006-07 TSXs with similar mileage and given that yours is an 08, I think the price sounds pretty good.)

The other big advantage you have in buying that car is that you know exactly how it was treated & maintained; no hidden accidents, etc. That's something you can never fully know with another used car.

Simba91102

I've never quite understood how a dealer gets to the $2K figure to certify a car, but I've seen it in print before and more than once. I have to assume that the lion's share of that is in the extended warranty (and possibly tires and/or brakes; the only other real money items in the process).

If I were you, I'd buy the car if only to flip it. It might be a pain in the neck, but I see an easy $1K -$3K on the table with this car (even if you did absolutely nothing but buy it, title it, and sell it). You're the original owner, AT, colors are right (can't go wrong with silver on black), low miles, still has plenty of warranty, and you don't get too greedy. Hell, I might buy it if the price was right (I love my silver 05, but at 128K miles, I often think it's time to turn it over to someone who won't continue to pile the miles on). Or.... keep it. As was stated above, knowing the car's history and it being available at a good price are real advantages.

fletch140

If I go the purchase-flip route, I assume I'll have to finance the purchase as if I was keeping it? Or could I find a buyer before my lease is up (end of December) and have the dealership facilitate the sale? He said that they can do the sale for me if I bring a buyer to the table at an agreed price, and they'd only charge $100 for something I can't remember. That would clearly avoid me having to find a loan to buy out the car, but something seems too easy about them helping me sell a car i technically don't own for profit without them taking a piece of something...

I also have to check on the warranty...it may only be a 3-year....

black label

In regards to what it costs to certify a car. The dealership must bring the car up to certification standards. If your brakes are more than 50% worn, they must be replaced, if your tires have less than 5/32nd of an inch of tread left, they must be replaced, floor mats need to be in good shape or they need to be replaced. If ther is any major service coming up, that needs to be one as well. There is also a fee that they need to pay to Acura for the certification to get the warranty extensions.

Sometimes it is less costly to certify a car with higher mileage. At 40-50K, you are more likely to have replaced some of the items that the dealer would have had to replace which lowers the cost of certification.

$2000 is a good average, I've seen cars that took $500 in the shop to certify and I've seen cars that took $3500 to certify (not counting the fee to Acura).

The biggest issue the OP is encountering is that his car became dated within a year of the lease inception. When you lease an outgoing body style (one that will no longer be current at lease maturity) it makes it very difficult to pull equity out of the lease. Had you leased an 05 TSX, when your lease was up there was very little difference visually between your 3 year old car and the brand new ones on the showroom floor. That cannot be said for a 2008 TSX and a 2010 model. I have witnessed many people pull equity out of their leases and either get out clean with 6 months left on the lease or actually pull cash out of it at lease maturity but it is always with a current body style car.

The minute the redesigned TSX's came out in 09, your 08 lost about $1500-2000 in value because it became "dated."

black label

Also, it's not a good time to lease a 2010 as the residuals are as low as they will ever be. You are better off waiting for a 2011 model and leasing when the residual is high. The higher the residual, the less you are paying for the lease.

bradykp

well, they have to have their mechanics look over the car head to toe. take their hourly rate, and maybe figure a couple hours of time, plus the cost of replacing anything that needs to be replaced. a "full detail" at my acura dealership also costs $150 (which i don't think is worth it vs a real full detail from a good detailer), but you have to figure that into the cost. they are also going to do paint repair.

i can easily seeing it "costing" $2,000 (even if that's not their true cost, it's what they would charge someone so they can call it their cost).

i find it hard to believe the trade in is $16,500 though. i looked up the kbb on my 2006 recently with 78,000 miles on it and the private party in good condition is $14,000. knock off a few grand for trade of course, and i find it hard to believe that 2 years newer isn't much more expensive with your mileage. i dunno though.

Itchytoe

The OP isn't the original owner. The vehicle was leased, so the leasing company is the original owner. If he buys it to flip it, he'll be the second owner of the vehicle with a record of a "special use/lease vehicle" on the carfax and autocheck reports. Flipping a 2 owner, 3 year old vehicle may not be as profitable as you'd imagine. First thought that comes to mind is why it's had 2 owners in such a short time. Lemon? Obviously, that's not the case here, but once it's flipped, it'll be 3 owner vehicle in as many years, which is scary.
The only reason I could see to buy it is if he wanted to keep it, which I think is great idea, assuming he can afford it.

Just remember, leasing a vehicle is never the same as buying a vehicle. Just because you're driving it doesn't mean it's yours.

Simba91102

Technically that's true, but you miss my point. The car has only been registered by one owner, and he knows the vehicle's history since new. The fact that the lease company had title first is (to me anyway) irrelevant (and the only way it could even become an issue would be perhaps a CarFax or similar report). The car's history is easily explainable by the seller and if you didn't believe his story (which is readily confirm-able on paper by the way), then you shouldn't be contemplating buying the car from him to begin with. And to be honest, if what you profess was a real issue with a prospective buyer, I'm not sure I'd want to do business with him or her anyway. There are a ton of off lease cars out there, and I'm pretty sure that the actual number of owners is nowhere on most people's lists of pros and cons.

I agree that this car is a good candidate for buy and hold, but if I could buy a silver 08 with + or - 32K miles for what he can, I grab it to sell in a heartbeat.