italiannyc

Well i got my car almost 2 years ago, 06 tsx, and now im just about over my allowed 31,500..So im thinking its time for me to trade it in the redo the lease with a new car. So what are my options here? I currently pay 379 a month for my lease, but i had horrible credit at the time and claimed backruptcy, but ive made all my payments on time now and i believe my credit is alot better now then it was then. Im thinking about maybe getting an 08 tl instead or maybe the new tsx when it comes out next month..But yea, has anyone ever gotten out of there lease early to upgrade to a newer car or what? Basically i wanna know what to expect, because i get charged 20 cents per mile i go over, so it looks like ill go over 10,000 miles if i dont switch the lease

CGTSX2004

iTrader: (1)

Do yourself a favor and don't lease. You clearly drive too many miles for a lease to work well for you.

MMsTSX

Leasing is a terrible idea.
Only in the US could it be so popular.

My advice is to drive a car you can afford.
If you can't afford a new car, don't drive one.

Do you have credit card debt too?

Borrowing money to buy something is a terrible idea and should
only be done out of pure necessity.

You lost over $9,000 on the lease, and another $2,000 or so
just on mileage on top of the $9000+ in payments you made.
So over $11,000 paid out, and what to show for it?
Nothing.

Just my . Nothing personal, but it is what it is.

italiannyc

who said i cant afford the car, i can afford the payments fine, i dont care about leasing. I dont wanna have the same car for over 3 years, and im not asking what peoples opinions are on leasing, im asking a question

MMsTSX

Okay, I hear you, I'll answer your question then:

Scenario 1: Walk away from your lease before it's over

There's one way to make your credit report look as ugly as Jabba the Hut in a string bikini. If you decide to turn in the car before the lease is over -- watch out! In a creditor's eyes, you just did the same thing as defaulting on a loan, says Dave Mooney, spokesman for Equifax, the credit-reporting agency, in Atlanta.

Creditors see that on a report and form the same opinion as if you decided to stop paying your mortgage. "Unless you make a deal prior to the termination, it's a voluntary surrender, which equals 'repo,'" adds Michael Todd, owner of Champion Leasing Group, a luxury car leasor in Woodbury, N.Y. "Your credit report becomes crap."

Defaulting on a lease is a breach of contract, and it has adverse effects on your credit report, agrees Ralph Alvarez, community relations manager for the Consumer Credit Counseling Service of Southern New York. "It acts like a settlement. It's like deciding to pay 75 percent of your debt instead of 100 percent."

Adding to the financial wreck, you're often faced with a stiff early termination fee. You're not only out of a car, but you have less money in your pocket and a damaged credit report. Yuck!

Now that the bad news is out of the way, let's look at how you can turn a car lease in early or terminate at the end of the lease without burning rubber on your credit report.

Scenario 2: Trade in your leased car early and exchange it for a new one

Pretend now that you leased a gas-guzzling Sherman tank a few years ago (more commonly known as a Sports Utility Vehicle or SUV), and you have six months remaining on the lease. Gas prices have skyrocketed, and you want to drive a more fuel-efficient vehicle.

So you trade in that car lease early, either to your original dealer or to a completely new dealer for a shiny new 45 miles-to-the-gallon, environmentally friendly vehicle. The dealer pays off the remaining payments on the car, and you walk away with a new lease on life.

"With rollovers, there's no adverse effect whatsoever on your credit report," Alvarez insists.

But not so fast, lead foot. Although your credit report will show that you've met your obligations completely, you'll still pay for those six remaining payments somehow.

Typically, this will magically appear in the new car lease, says Michael Kranitz, president of Driveoff.com in Denver, and author of Look Before You Lease: Secrets to Smart Vehicle Leasing. Remember that you never owned the car in the first place; you were merely renting with an option to buy.

"The dealer takes it off the customer's hands and just adds [the remaining payments] to part of the new car," Kranitz says. "In your new lease, you'll just pay for part of the old car and the new car at the same time."

He also warns that they'll factor in the subjective excess "wear and tear" clause, where the dealer and you differ on what exactly are normal nicks and scratches.

For example, there's a fender bender that you never fixed. The dealer is going to slap you with a charge for excess wear and tear, often more than what it would have cost you to fix it beforehand.

Plus, there's the excessive mileage clause that if you're over the mileage limit agreed upon per year, you pay per mile what you exceed.

For example, perhaps you're 3,000 miles over the mileage cap of 36,000 miles (12,000 per year on a three-year lease). According to your lease contract, you'll be charged 32 cents per mile. That an extra $960 that's either taken out of pocket or built into the new lease or sale.

But, hey, look at the bright side, your credit report still looks marvelous!

From: http://www.bankrate.com/brm/news/advice/20000121b.asp


So basically this is what to expect:

You're going with option number 2.
You will have to pay the mileage penalty no matter what.
They figure it out by amount per time period, you're over that now.
You'll still have to pay the remainder of your old lease no matter what.
It'll all get wrapped up into your new lease (rent) payments.

So basically you can do it, you're credit will not suffer, but your new payments
on your new leased car will be higher than expected. Any dealer should be
happy to do this for you. With a spotless payment record for 2 years, you should
be okay, provided the rest of your credit is equally as good.


However... The fact is you drive too much to have a lease to begin with.
If you want to just rent cars always and never own anything, fine.
But you need to be prepared to pay their fees, interest, penalties and all of that.
It's their car and their deal after all.
Maybe on the new lease you can ask for an extended mileage thing where
you pay extra every month knowing you'll go over the agreed upon amount anyway.

Or best yet, if your credit is good now, just buy a car, so your payments go to
something. You can still get a new car every 3 years, and you'll actually have
some money to show for it in the end.

nj2pa2nc

suggestion-go to the dealer and find out-If you like what they offer-go for it- With the mileage you drive tho I would see if buying it would be better for you. Good luck.

CGTSX2004

iTrader: (1)

Let me make this clear...no debate about the merits of leasing. He is asking for advice on what to do with his situation. If you have nothing helpful to add, please do not say anything.

And to the OP, I still say that leasing is not going to work for you. The reason being that you clearly drive too many miles. This means that even if you try to trade it in, you'll be upside down on the value of the car, which means you will always have to pay out of pocket since no dealer is going to give you the payoff value on your current car.

You really should consider buying a car in your situation. You can still change cars every few years if you wish, but at least then you would not need to be concerned about mileage.

Nogard13

You could always consider a 15K miles/year lease. It seems like that's about what you drove (31K miles in 2 years). I leased mine for 15K miles/year and my payments are lower than yours (I do have good credit, tho). You might look into that.

However, I'd be inclined to suggest you buy. No need in cutting it so close. I normally drive about 12K a year, but I wanted the extra mileage so that I wouldn't be afraid to take an extra road trip here and there.

Destrejc

Do not make the same mistake twice. Try to buy or take the option to buy on your car once your lease is over..........Then "Mod" the hell out of it after!!!!!

LukeaTron

I'm not real familiar with the intricacies of leasing but you have to pay a penalty of some sort to end a lease early? My understanding is that you've entered a contract to pay a fixed price for a fixed period of time and you're now wanting to exit that contract. I would think the other party would still want the agreed upon amount of money before allowing you out of the contract. Or at least some prorated portion of that agreed upon amount based on miles and wear and that sort of thing.

I'm mostly just speculating here. Can any one more in the know confirm or deny this?

CGTSX2004

iTrader: (1)

As long as you pay the current pay-off value, most leasing companies will allow you to break a lease.

LukeaTron

So is the current pay-off value based on the amount they would have received had you gone full term?

Mskierki

Typically the dealer is looking to move new cars off the lot anyway they can. So they will not charge you for ending the lease early if you are buying another car from them, because they are making money off of the new sale. I guess it would be up to the dealer. I would agree with the other people here and say just buy your next car. The negotiating will give you the flexibility to straighten out these details.

CGTSX2004

iTrader: (1)

No, pay-off is total value of the vehicle. Basically it's a buy out option.

ZhenyaF

iTrader: (6)

To the OP - you can buy the car at the end of the lease and not pay for the excess mileage.
You can also contact the leasing bank(probably Honda financial) and find out the current buy out value. If you come up with that money, then you can end the lease early. Sometimes a dealer will pay that amount off (if its low enough)

club_euro2

I would get a new one. Depending on what kind of lease deal you had, you will be paying atleast .20 cents per over for the mileage. Good Luck.

brahtw8

Whether you lease or finance, you still have to deal with the amount that you owe and the value of the car. Mileage will impact the value of the car in either situation and you can be upside down in either situation.

The only difference is the mileage penalty for the lease at the end of the term, but that only comes into play if you return the car at lease end. If you buy the car at lease end or you sell or trade the car before the lease runs out, you are in the same position you would be in had you financed it. At any given time, the lease has an outstanding balance just like a traditional finance, and the car is going to be worth what it is worth regardless of whether it was leased or financed.

This assumes, of course, that the purchase price and interest rates are equal for the lease versus finance. Sometimes, as with the recent TSX lease special, the interest rate for the lease is actually better than you can get through traditional financing. Often the interest rates for the lease are worse than you can get through traditional financing.

I have had very good luck with closed end leases of used cars, with no mileage limits. Basically, balloon financing under the guise of a lease. My situation is far from typical.

MMsTSX

Let me make this clear...

Do NOT delete my posts with some explaination like that!
Especially when you follow it with the same comments I had.

My second post here was by far the best in helping this guy out, and you
deleted it, and then said the same thing with nothing to back it up.

You are a terrible moderator!

brahtw8

I am a moderator on nsxprime. It is a largely thankless position with no compensation or real benefit, and I appreciate anyone willing to take their time to help moderate a forum, as you have done.

That said, your moderation of this thread is lacking. I felt that way before I read the above post, but didn't say anything. You have done precisely what you have chastised others for. I think if you re-read this thread, you will agree.

Don't take it personally. Think of it as constructive criticism.

MMsTSX

Here, maybe this won't be deleted this time.

http://www.bankrate.com/brm/news/advice/20000121b.asp

http://www.bankrate.com/brm/news/auto/19990915.asp

http://www.bankrate.com/brm/news/auto/20050506a1can.asp

http://www.bankrate.com/brm/news/auto/20020731a.asp

Here, just read these.

I'm not going to bother to type out all of my comments again.

Newplay1

What you can do is prevent yourself from leasing again and buy maybe 05-06 TL used. Keep that for maybe 2-3yrs and sell/trade and get yourself brand new 2011 TSX or TL

CGTSX2004

iTrader: (1)

You haven't been around here long enough so perhaps you should do a search. I champion leasing more than anyone around here, but I also have read too many threads where people go into long debates about how bad leasing is without understanding people's situations.

You did not offer anything of noticeable value other than to write a rant about why you think leasing is bad. Not just bad for him, but bad in general. That is off topic and not needed.

He is asking for advice on his situation. If you cannot provide a succinct response without ranting and raving off-topic, please hold your tongue because it is not needed.

CGTSX2004

iTrader: (1)

Criticism noted, but as someone who has been here a while, I have seen too many of these threads where they degenerate into debates about why leasing is bad. Not bad for the individual asking the question, but rather why leasing is bad in general, which is completely off topic.

The OP requested advice on his current situation. If someone wants to post up a link or two about why leasing makes sense for some, I have no problem with that. But if someone is going to rant off-topic for multiple paragraphs about everything that is wrong with the concept of leasing without providing a balanced point of view and without seriously considering the original posters needs, then there is no need for it.

Believe me, save the debate about the merits of leasing for the off-topic forum. OP is here to get some help with his situation, not to be berated for taking on a lease.

MMsTSX

You obviously didn't even read those paragraphs you deleted.
They were unbiased and exactly what he asked for.
They were a quote from a site, the one I posted links to above...
With links, just like the post I made above.

You made a bad decision based on your own emotion, you didn't even read
my second post.

Now I understand why the other site says the moderation here sucks.

brahtw8

No worries.

I did not see the post that you deleted, only his subsequent comments and your statements.

I don't disagree that this thread may degenerate into a debate about leasing. Indeed, I think it did so not long after it started. As you yourself tacitly acknowledge by noting the history of past threads, such thread evolution is to be expected and part of the nature of forum interaction.

I wish that everyone posted with a balanced point of view and after seriously considering the original poster's needs, but that seems like an impossible standard to expect the forum members to meet or enforce.

bradykp

without going into why a lease won't work for your driving situation, you need to take a step back and consider your options. i've never leased, but speaking to some friends, i've heard that you can sometimes negotiate more miles into your lease. i'm not sure how that works, or how expensive it is, but maybe it's better than the 20 cents per mile.

you're 4,500 miles away, which is roughly 1/3 of what you drive annually, and you're slightly under 2 years, so i doubt you can watch your mileage....but you might want to start. you should calculate what your 20 cents per mile will come to, my guess is, your only option will be to buy the car.

you better discuss with your dealer now what your buyout price is at the end of the term, because that's most likely going to be your most sensible option. but if you can somehow limit your mileage over the next 12 months, maybe you can get out without paying a ton. if it's 20 cents per mile, you're looking at $200 per 1,000 miles. if it's a 12,000 mile lease, that's a discount on what your monthly payment of $379 is correct?


now, as a word of advice that's slightly off topic, i'm 26, living near NYC, making decent money. do not lease a new car. you're obviously over-extending yourself, and if you've already declared bankruptcy once, do you really want to go down that road? i don't know when you did it, but recent laws make it more difficult. from my understanding, bankruptcy stays on your record for 10 years.

just as some financial advice, please don't get yourself in trouble. bankruptcy is not an answer. it's basically screwing the people you owe money to because of mistakes you made yourself. i'm cynically looking at it, but i can't help it.

brahtw8

In my experience, you can prepay mileage at 5 cents/mile cheaper than the end of lease rate. Thus, if 20 cents at lease end, you can prepay at 15 cents. However, I believe this has to be done at the start of the lease. I don't know if you can do it during the lease term.

Lookforme78727

Hey I'm a first time poster, long time reader.

I have a little experience in this area. I've leased 3 Acura's (Integra, Type-R and TSX) over the years, been over the mileage limit every time and I've NEVER paid a mileage penalty.

If I were you, I would read your lease contract carefully. I've been in the same situation as you and probably leased for the same reasons as you. Typically, leases tend to be $100-$150 cheaper in payment per month. I've also found myself in the same mileage bind.

In my experience, the dealership cannot do anything for you unless you're in the last 6 months of your lease. In the last 6 months of your lease, you have three basic options, buy the car, turn the car in or sell it yourself. Basically, I avoided the mileage penalty by agreeing to lease or buy another Acura. In turn, they forgive the mileage. You have to negotiate this but dealerships are motivated to lease/sell you another Acura. If you turn you car in and lease/buy another Acura, you are still on the hook for excessive wear and tear. If you buy your car, as I bought my TSX, the mileage and wear and tear are not a factor.
Just my 2 cents, good luck.