vipgelsi

Hi i am turning my car in this month and i never had a chance to get my left fog light bulb replaced. when the guy comes to inspect the car will this be a issure?

I wasnt shure if they check the lights since the car is under warrenty still

vipgelsi

bump

Mike_TX

To answer your question, it's unlikely they'll notice it. Just keep the fog lights turned off.

As far as warranty is concerned, though, I doubt that's covered if it's just a blown bulb. They consider that kind of thing "maintenance" as opposed to a faulty part.

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Mike_TX

In another vein, though, why are you giving it back to Acura? If you're going to be getting another car (any brand), I'd try trading it in. In most states you get a sales tax break, since you pay tax only on the difference between the new one and your trade-in.

Figuring an average sales tax of, say, 6%, and a trade value of even $25,000, that's $1,500. So, even if you got $1,000 less for it than your lease pay-off, you're still $500 ahead. And you might come out better. And you don't have to worry about things like foglights, tire wear, excess mileage and so on.

Just a thought ... it's what I usually do on my leases!

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vipgelsi

very good idea i had no clue u could do that

Mike_TX

See your PM's. I finally saw your message and replied. Sorry it took so long.

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vipgelsi

Has anyone tried this is nj? Hey mike would i loose my security deposit or would i still get that back later from honda?

SpicyMikey

Well, if you traded in the vehicle it's not your security deposit anymore. It's the dealership who took over the lease from you

miner

Honda/Acura allows up to $1500 of wear and tear before the leasee needs to be held liable for repairs. I just traded an '04 RSX-S (Lease turn-in) towards an '08 TSX and saved $890 in sales tax by trading in versus lease turn-in.

Mike_TX

Answered via your PM. But most security deposits are applied to the final lease payment. You'll have to check your lease to make sure how that's handled, because some security deposits are "earned", meaning they are basically just "one payment ahead" so the leasing company doesn't get left holding the bag if you miss a payment.

If you truly have a refundable security deposit, and you don't make the final payment (because you traded the car in early), it should be refunded to you.

I've never had to put up a security deposit, so I don't know exactly how AHFC does it.

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Mike_TX

You know, that's a great point to make. Most leases require you to pay for all kinds of things, like tire wear, door dings and scrapes bigger than a certain size, etc., when the lease ends. The AHFC leases give you a nice "allowance" for this kind of stuff.

My BMW, Lexus and Nissan leases didn't do that! I remember having to rush to replace a windshield in a 740i before turning it in.

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SpicyMikey

That doesn't sound right. If the dealership is taking over the lease and giving you cash for the vehicle to put towards a new lease/purchase, why would the deposit be yours anymore. The dealership is taking over the risks of closing out that lease. They should get the benefits too. If you have a substantial security deposit in the lease, you should negotiate that out with the trade in value you want.

Mike_TX

Well, no, the dealer is just giving you enough money for your trade-in to pay off the lease. Just the same as they would if you had a loan on the car instead of a lease.

They're not actually taking over the lease - they simply pay the car off and put it on their used lot or wholesale it. So IF there is any money left over (like a refundable security deposit, or unearned interest, etc.) it's still yours.

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SpicyMikey

Mike, sorry, I think your wrong. It's true that when you terminate a lease YOURSELF you are going to get back any security deposit you made. If you trade in a vehicle to the dealer things are different. In that situation the dealer is going to buy the car from the leasing company and sell it themselves for a profit on their lot or at auction. Once you walk out the door of that dealership with the new car and the cash value of the old one, you are DONE. You have no ties to that old car any longer. The only thing you'll get is a letter confirming the lease was terminated. Any inception fees owed back at the end would go to the PURCHASER (i.e. the dealer in this case).

To the OP: If you have a substantial security deposit in the lease contract, make sure you negotiate that out with the buy out figure the dealer and you agree too.

Mike_TX

Mikey, I'm not gonna guarantee you're wrong, but consider this:

A "true" security deposit is like earnest money the lessor puts up to "guarantee" he'll make the payments on the lease. If he defaults, the leasing company gets his deposit. If he performs suitably on the lease (i.e., he makes his payments on time, etc.), they give it back to him at the end of the lease by applying it to the last lease payment.

Never in this scenario is the deposit the property of anyone other than the guy who put it up, regardless whether he sells the car or not. Put another way, it's "outside" the lease, so when the car is paid off prior to lease end, the leasing company no longer needs it for the last payment. It would therefore go back to the guy who put it up.

NOW ... if the payoff quoted by the leasing company INCLUDES the confiscation of the deposit, then you're right. But I don't think it typically does.

One of the reasons I say this is because my brother-in-law (who has not-so-fabulous credit) had to put up a security deposit to lease a car a little over 2 years ago. Before the lease ended, he went back and traded up to a lease on a nicer car (same brand, same dealer). They told him he wouldn't have to put up a new security deposit because they'd transfer the one he put up on the first lease to the new lease.

Again, it depends on whether the deposit is calculated in with the payoff, so we could both be right depending on the circumstances. How democratic is that?

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SpicyMikey

LOL, that's pretty good tippy toeing! I agree it really depends on how the contract is written. It can vary greatly, and as you suggested, security deposits are not common so the situation doesn't come up every day.

vipgelsi: I suppose the best way to find out is to just call the lease company and find out. For all you know, NO ONE get's the security back when you terminate early and sell the car to the dealer. Some leases still charge you a "disposition" fee if you terminate early.

Post a followup vipgelsi, when you have the answer. I'd like to know.

rmesola

I'd have to agree with Mike_TX

The dealer does not take over the lease from you. You actually buy out the car from the lease company using money the dealer gives you, then on the next document you sell them the same car once the lease company releases the title to the car since they have been paid off. The dealer only assumes the title once the lease has been paid off. They never become the lessee.

So you are actually buying out the car from the lease company and selling the car to the dealer. Just make sure your payoff amount - usually factors in the security deposit, is covered by the dealer's trade in value assessment. Otherwise you're out money and it makes no sense.

EX:

50K RL
Residual 22K
Payoff amt 22K

Dealer trade in value 22K

in this case your only profit is the sales tax discount on the 22K. Make sure the payoff amount you calculate takes out your security deposit.

EX:
50K RL
Residual 22K (actual residual 25K - 3K security deposit)
Dealer trade in 22K

In this scenario you actually lost 3K as the actual payoff aount was 25K but your security deposit discounted it.

these numbers are examples only.

wcimo

I'm looking for a 2005 or 2006 RL from a private party since in Nevada, you don't have to pay sales tax if you buy a car from a private party.

Any leads are appreaciated..

Bill

lausy

I have only leased once so I am no expert. But isn't it true when you lease, the vehicle is titled in the bank's name? If that is the case, how can you benefit from the sales tax discount because the new lease will be titled to the new bank and different "owner". Maryland doesn't give such tax breaks on trade ins so this does not apply to me anyway.

rmesola

technically when you buy out the lease the title transfer over to you and then you trade it in and you not the bank transfers the title to the dealer... it's a 3 day switch that happens in paper and not physically...

the dealer is not buying out the lease but paying you money to buy out the lease so they can buy it from you...

it's somewhat complicated, but car dealers know how to make it happen.

lland

Talk to the salesman. Agree on a price then bring up the lease/trade. He knows how to strike a deal to sell a car.

A friend of mine bought a BMW 7 series. He has 4 kids (3 girls, 1 boy) and whenever they went anywhere, they took the Suburban. He decided that since he was alone in the car 99% of the time, he had no need for the back seat. He went to the local Chevrolet dealer and bought a Corvette (nice deep blue). The dealer put the BMW out on the lot on consignment and when it sold, took the car as a trade toward the Corvette before selling it to the new buyer. The new buyer got the BMW at his price and my frined got the benefit of the trade and saved enough in sales tax that he lost noting during his short ownership of the BMW.

LL