Can you trade in a leased car?

[FirstImport02Si]

Hey well that's my question...can you trade in a leased car? If so do you have to trade it in at the same dealership you bought it? And if you can, is this a costly mistake? I have had my car since December, and I'm not unhappy with it all, just would like something a little bigger. If it would end up costly me thousands of dollars to trade to an Accord or something, I wouldn't even bother.

[ssvr6]

It would EASILY cost you thousands to trade it in.


Steve

[spydur]

Unfortunately you are probably stuck with your car and the lease.
Leases are written to benefit the lessor not you as the lessee. Yes, you are protected by consumer protection laws, but once you sign a lease you have to abide by the terms until the lease expires.

Your lease should have early termination language that specifically sets out what penalities you will incur if you decide to terminate the lease. Read the lease document and find out what those penalities are. If legal documents are confusing to you, find a friend or relative that can help you understand the language. Unfortunately, the lessor has you tied down and there is no negotiating room.

Be careful, I have heard that some dealers will offer to buy you out of your lease in order to sell you a new car. Well, they will be including your lease termination penalty in the financing of the new car. That gets expensive and you are immediately barried in the new car.

Best advice, continue to drive the car until the lease expires - learn your lesson and never lease a car again!

LEASES ARE FOR BUSINESS SAVY INDIVIDUALS WHO FULLY UNDERSTAND ALL OF THE TERMS OF THE LEASE AND NOT FOR INDIVIDUALS WHO ARE JUST LOOKING FOR A REASONABLE MONTHLY PAYMENT.

IF YOU DECIDE TO LEASE, BE SURE THAT YOU FULLY UNDERSTAND ALL OF THE LEASE TERMS BEFORE YOU SIGN IT!

[FirstImport02Si]

Thanks. Pretty much what I was expecting to hear I suppose. I'll drive the car for another 2 1/2 years, no big deal. I signed up for a lease this time because I am pretty much planning on leasing cars for the next 10 years or so. When the warranty is up, I trade it in, don't owe anything, and grab a new ride. Well that's the plan at least...who know's what they'll say about my mileage. Yep 15k in 6 mos. Gulp. :o

[spydur]

First Import:

Your lease document will spell out the annual mileage allowances and the penalties for exceeding the total allowance when you turn the car in.

[Papa Bear]

It all depends on the situation. I traded in my leased 01 Civic EX for my '02 SI and I got a very good deal. I put quite a bit down on my leased EX and I had put very few miles on it and it was only a year and a half old so therefore I had equity in that vehicle. The sales manager couldn't wait to swap me for the Si cause he had quite a few 02 Si's he wanted to move and selling a slightly used EX would be a lot easier for him. Also the lease rate on the EX was 7.9% and the SI's was 4.8%, so I saved money there as well. Every leased vehicle has a buyout at the end. You need to find out what yours is and go from there. Every situation is unique (supply and demand, cost of borrowing, the amount of equity you have in your leased vehicle etc.). You will not have dealers avidly looking for used SI's to move and if you plan on trading it for something highly sought after (IE Accord V6 coupe) you are going to get screwed big time. Also, keep in mind that most people got great interest rates on their SI's so you will probably end up loosing money just on the cost of borrowing alone.

[FirstImport02Si]

I know what the allowances are and what the penalties are...and it ain't pretty. But many times if you agree to lease another car from them, they will waive the extra costs. Unless they are just rolling it into the next one without you knowing. I hate dealerships. Sneaky bastards.

[Chrisbgft]

Hey, its cool. My car is leased...too. 23K/13months so far. I have 15K/year. I am also moddin my car..lol. Neuspeed springs, rims. CF Hood, Intake, exhaust, header..my residual is 9K at the end. i am just going to save up and pay the residual at the end for the car. Or i will return it to stock and turn it in..dont know yet.

[icegrill]

All I know is leasing is sort of a scary way to buy a car. Lower payments but major penalties for early trade in and your pretty much renting the car. :angel:

[IceD out N CALI]

like earlier stated, every situation is unique but in general if you try to trade it in early you will get raped big time especially on a lease. However just like a loan, the lease has a payoff as well. if that is low you could possibly do it and not loose as much. chances are though you'd have to loose way to much than it is worth to get out of your ep

[Papa Bear]

To be quite honest I think you are going to lose money trading in your ep whether you leased it or not. I was just out looking at the dealers lots and they still had BRAND NEW '02s for sale. Lets face it, these cars are not very popular. Shit, the '04s should be out in about 3 or 4 months! I don't think that I'm going to mod my car anymore after the poor results from the Jackson Racing SC and seeing the poor demand for these cars. I am also experiencing some clunking from the rear end and scrubbing from the front while turning right.

[FirstImport02Si]

My situation looks to be the same as Chris's. 15k mi/year, $9k and change for the buyout. I like the Si though, and if I'm going to spend a couple grand maybe I'll just buy a used 5.0 or something and put some summer miles on that. Now there's an idea..... :)

[JLannoo]

There is nothing wrong with leasing a car as long as the terms suit you.

One thing I would advise against when leasing is to avoid putting any money down on it. Say you put $2000 down on a lease and then total it a few months later. Your money just went poof gone.

[Papa Bear]

Originally posted by JLannoo
There is nothing wrong with leasing a car as long as the terms suit you.

One thing I would advise against when leasing is to avoid putting any money down on it. Say you put $2000 down on a lease and then total it a few months later. Your money just went poof gone.

Very true, but if you don't put any money down, your payments aren't much different than when you purchase. The interest rates are usually two to three points higher and you are financing the total price of the vehicle over four years.

[JLannoo]

Originally posted by Papa Bear


Very true, but if you don't put any money down, your payments aren't much different than when you purchase. The interest rates are usually two to three points higher and you are financing the total price of the vehicle over four years.


Depends on the deal you work. Just like buying a car you can get ripped big time or get a great deal.

I'll never lease if I have to put bucks down. You might as well buy it like you said. :)

[audomatik]

I'm leasing my car. Plus they knocked off $1000 at signing for some sort of discount. The total down payment was $1512 and some change. My payments are around $210 a month plus $170 a month for insurance. It's a 4 year lease with average of 15,000 miles a year. Considering I never put that many miles on a car ever, I'm never gonna run into any legality problems. And since it's only a 4 year lease, at the end I can either trade it in on whatever sweet car Honda has in 4 years or opt to buy it out and keep it. I'm looking to crazy mods or anything, just bolt-ons, so I can always take that stuff off and sell it when I trade the car back in. And if my current job takes of and I get promoted, I can always opt to lease-to-buy. They can convert the payments from leasing payments to actual payments. The best thing to do about your situation is just go to the dealership and tell them what you're thinking about. They don't bite.... hard... jk

[JLannoo]

Originally posted by audomatik
It's a 4 year lease with average of 15,000 miles a year.

If you did decide to turn it in the 4 year part scares me. Your out of warranty on a car you dont own for a whole year.

I feel I screwed up. I pay $215 a month $0 down $0 deposit for 39 months <-- hence where I screwed up.

I know I could have got 36 months with no trouble and only slight monthly increase but I didnt ask. :( I better make sure I have it looked at good before those last 3 months.

[IownAmaxima]

Originally posted by audomatik
... total down payment was $1512 and some change. My payments are around $210 a month (insurance doesn't matter, same for buy or lease) It's a 4 year lease with average of 15,000 miles a year...
So you're going to pay $11580 by the time the lease expires. Then have a $9k buyout... so you think the car will be worth $9k in 4 years?

Leasing is only a good idea if you don't have ANY money to put down and want/need something 'more' than you can really afford.

Good luck to anyone who's leasing... 90% of you will take it dry and the other 10% may get some lube, but not enough that it won't sting when you realize you just gave someone $11k for a car and you have to give it back.


at the end I can either trade it in on whatever sweet car Honda has in 4 years or opt to buy it out and keep ithow much equity do you think you're going to accumulate? Give you a hint... not enough to "trade it in" on whatever sweet car honda has in 4 years.

And yes, I leased a car and got screwed so I learned the hard way.

[Papa Bear]

But that is just how leasing works. Don't we all know we have to buy it at the price we agreed upon at signing or give it back after four years? You make it sound as though you were douped into it and got screwed in the end. People sometimes get screwed when they purchase cars to, thats the way it goes. But if you don't have a downpayment and need a reliable car for a low mnthly payment (ie a student) leasing is a good way to go.

[spydur]

I don't want to sound condesending, but these are the facts about leasing:

Leasing of vehicles and equipment originated for business purposes. Companies with limited capital (down payment) lease equipment for financial reasons. Companies can also use the cost of the lease as a cost of business and therefore it is a tax deduction. Individuals do not have the tax deduction option unless they can expense the cost of the lease through the tax return of their business. Believe me, the decision to lease or not to lease for a business is an involved financial decision that incorporates income tax implications.

When the cost of vehicles started to rise the manufacturers tried to find a way to lower monthly payments for buyers. Unfortunately, many consumers in our [I]I NEED IT NOW SOCIETY [I] only look at the monthly payments and not the true net cost of a lease verses a purchase. At first (in the 80's) leases worked to the advantage of many buyers, but the manufactures learned their lesson and now they are in full control.

One may argue that a lease is not that much different than a long term loan, due to the value of the car at the end of the loan term. Well, longer term loans are more readily available and one faces the possibility that the balance of the loan may exceed the value of the car.

If you don't believe me, surf the web for consumer sites try http://clarkhoward.com/library/tips/car_leasing.html

Again, I don't want to put anyone down. As in all financial maters make sure you understand the terms before you sign the dotted line.

[IownAmaxima]

Originally posted by Papa Bear
But that is just how leasing works. Don't we all know we have to buy it at the price we agreed upon at signing or give it back after four years? You make it sound as though you were douped into it and got screwed in the end. I honestly believe most people who lease think they're doing something good until the end of their first lease, which I bet is usually their ONLY lease because of how much they DID get screwed. What I'm talking about is (like spydur said) we're a NEED IT NOW society and most people who lease (non business lease) do it because they can't afford the car and 'want' it, mostly for looks. It's just like renting a place... rent when you HAVE to, buy at the first opportunity.
People sometimes get screwed when they purchase cars to, thats the way it goes. But if you don't have a downpayment and need a reliable car for a low mnthly payment (ie a student) leasing is a good way to go. [/B]Of course people get screwed when they buy, just (most of the time) not as bad...AND they still have money to show when they go to sell the car. The "equity" you gain in a lease is NEVER enough to make it worth talking about unless you're rolling into another lease, then the dealer just greases up your cornhole, shows you how "for only another $20/month you can have THIS car" and rolls the penalties he never mentioned into the next lease so you think you're making out...

And the kicker... this seems ok to most people until they want to actually own a car and a lease ends and they realize THEY STILL HAVE NO MONEY which is the reason they leased in the first place!

Short answer... you lease, 90% of the time you're getting screwed far worse than any purchaser ever got screwed.

[blueiedgod]

I have to agree with "lease haters" I almost got duped into leasing once. But, luckily I was able to sit down, with a clear head, without the "ohhhh I want that shiny new car now!!!" mentality and calculate that by the end of the lease i would be in a hole.
First of all, lease payments for 48 months were only $50 or $100 lower than a loan payment for 60 months ( 1 year difference) By the end of the lease I would have nothing in my hands to show for the 4 years of payments.
Secondly, I usually get bored with cars in 2 or so years. a 24 month lease is outrageously expensive. It is much cheaper to finance and then, if you buy a honda or toyota, trade in is within the payoff on the car. so, by selling privately you can make a few bucks.
Leases have higher closing costs than most financing options with good credit rating. Most leases have $2000 capital cost reduction (downpayment) and then you have to pay taxes on full purchase price (in CT, in some states you only pay taxes on your monthly payments)
Money facotrs in leases, in these economic times, are much higher than financing rates.
Mileage penalties are outrageous.

There are no new leases being written in NJ/CT/NY area, these are so called smart purchase plans, or in the old financial term baloon loans. This is due to some guy who was in an accident, he turned around and sued the leasing comany, since they are the legal owner of the vehicle. they were forced to pay him a handsome sum.
There are no longer $150/month leases out there. The residual values (expected cost at end of lease) are much lower, than what we were used to in the 80's and 90's.
oh well, i can come up with 100 more reasons one should not lease. but to each his own.

[Papa Bear]

I'm not saying leases are a good thing. They are simply another way to finance an automobile. What I am saying is don't say the dealer fucked me on a lease when you are the one signing the papers. Learn how to use a calculator and understand that you are in fact renting the vehicle for a certain period of time for X number of dollars per month. I realize there are some shady dealers out there, but leases do serve a function or they wouldn't exist. The terms of a lease are negotiated just like a purchase and yes if you by the vehicle at the end you will end up paying more for it.

[spydur]

Originally posted by Papa Bear
I'm not saying leases are a good thing. They are simply another way to finance an automobile. What I am saying is don't say the dealer fucked me on a lease when you are the one signing the papers. Learn how to use a calculator and understand that you are in fact renting the vehicle for a certain period of time for X number of dollars per month. I realize there are some shady dealers out there, but leases do serve a function or they wouldn't exist. The terms of a lease are negotiated just like a purchase and yes if you by the vehicle at the end you will end up paying more for it.


GREAT STATEMENT: "YOU ARE IN FACT RENTING A VEHICLE FOR A CERTAIN PERIOD OF TIME FOR X NUMBER OF DOLLARS A MONTH." this is the essance of a lease, you are never the owner of the vehicle - you are paying for the privilege of driving it under the owner's (manufacturer's or financial institution's) terms. Who benefits when you lease an apartment? The owner financially and you have the privilege of living in the unit! One must think this way when they lease a car. If it is worth it to you to rent a car for a specific term at a specific rate and you fully understand the downside on the end of the lease....then go ahead and lease!

But, financial wisdom say to only buy as much as you can truely afford. Unfortunately, for many this means used cars instead of new.

[IceD out N CALI]

yup lease is like renting a car but if you're the type of person that keeps a car for only 2-3 years anyway then it is probably a better way to go. I know that when my lease is up in a little over a year and a half from now i wont have to worry about resale value the bank will. I'll probably have to pay some extra miles but no biggie:)

[spydur]

Originally posted by IceD out N CALI
yup lease is like renting a car but if you're the type of person that keeps a car for only 2-3 years anyway then it is probably a better way to go. I know that when my lease is up in a little over a year and a half from now i wont have to worry about resale value the bank will. I'll probably have to pay some extra miles but no biggie:)


If that is your philosophy, then fine. Just as long as you understand that you are paying good $'S for it. I hope when your lease is up that you have a positive experience.

[audomatik]

All the used cars at the Honda dealership near me made no sense in buying. The average payments were around $230-280 for cars that I would like to buy. The Si I got was leased to me for $206 including taxes. Keep in mind that my Si had about 7-8 miles on it when I drove it home. And at the end of the lease it will have less then 40-42,000 miles (thats just how much I figure I drive). All the used cars that I was looking at had more then 50,000 miles. Does it make sense for me to lease a car with 7-8 miles and be worry free about a car or buy a used car that I don't know how the previous owner treated with 50,000+ miles for more money. I know how much I am paying for the car, I know how much I would owe after the lease is up and thats why I signed. I'm not the kind of person that has a car for 2 years and either totals it or gets bored and sells it. I had my piece of shit Prelude for 3.5 years and only got rid of it because the transmission was fucked and I wasn't gonna put anymore money into. True that I would like to pay for the car that I am going to own later down the road, but you can only play the hands you're dealt. I make damn good money now and I know I'll make more in a few short years, so don't try and tell me that poor people lease cars and they're still poor afterwards... or whatever you were trying to say. The next car I drive, will be bought to own. I'm only leasing because it's affordable at the time being and I need a new car that I can depend on. Oh and EPs are sweet as shit... I mean, I could jsut go out and utilize that Buy One Get One FREE deal at Daewoo... Now thats a smart financial move... you drive them off the lot and they're already worth a good $3500. LOL

[spydur]

Originally posted by spydur
I don't want to sound condesending, but these are the facts about leasing:

Leasing of vehicles and equipment originated for business purposes. Companies with limited capital (down payment) lease equipment for financial reasons. Companies can also use the cost of the lease as a cost of business and therefore it is a tax deduction. Individuals do not have the tax deduction option unless they can expense the cost of the lease through the tax return of their business. Believe me, the decision to lease or not to lease for a business is an involved financial decision that incorporates income tax implications.

When the cost of vehicles started to rise the manufacturers tried to find a way to lower monthly payments for buyers. Unfortunately, many consumers in our [I]I NEED IT NOW SOCIETY [I] only look at the monthly payments and not the true net cost of a lease verses a purchase. At first (in the 80's) leases worked to the advantage of many buyers, but the manufactures learned their lesson and now they are in full control.

One may argue that a lease is not that much different than a long term loan, due to the value of the car at the end of the loan term. Well, longer term loans are more readily available and one faces the possibility that the balance of the loan may exceed the value of the car.

If you don't believe me, surf the web for consumer sites or try: http://clarkhoward.com/library/tips/car_leasing.html
http://www.edmunds.com/advice/leasing/articles/83171/article.html
http://www.edmunds.com/advice/leasing/articles/83171/article.html
http://www.smartmoney.com/autos/leasing/index.cfm?story=buylease

Again, I don't want to put anyone down. As in all financial maters make sure you understand the terms before you sign the dotted line.

Sorry, I was trying to edit my prior posting with the addition of the internet addresses.

[IownAmaxima]

you say this,
Originally posted by audomatik
I make damn good money now and I know I'll make more in a few short years, so don't try and tell me that poor people lease cars and they're still poor afterwards... or whatever you were trying to say. then you say this...
The next car I drive, will be bought to own. I'm only leasing because it's affordable at the time Which is it? You make good money NOW but when you signed your lease you didn't? You're making my point, thanks.

AGAIN...if you lease you're not doing as well as if you bought. That's all I said. I also said most people who lease do so to get more car than they can really afford. I'm not flaming anyone, just pointing out facts.

[JLannoo]

Originally posted by IownAmaxima



Leasing is only a good idea if you don't have ANY money to put down and want/need something 'more' than you can really afford.



Hey that fits me well,I cant afford anything I work at Kroger :cool: lol and am lucky when I have $200-$300 in the bank. Granted I could have more,but I like to live/buy/do things more then I like to save.

If I could of bought I would have...hell why not. I went down to look at the car saying if I have to put anything down I'll wait but I didnt and it was cheap. Life is short,I got tired of waiting.

ME ME ME NOW NOW NOW If I had nickel for everytime my fiancee tells me I have no patience I could have bought it outright
:D ....ok I'm rambling

[BlackNRedSi]

I dont even know why one would lease a EP!? The majority of people that buy the Si either want it for a while (since its a honda and they last like 200,000 miles) or are going to want it cause its a fun car to have...

you lease a mercadese, or a lexus...something where the payments will be huge if you finance, so you take the lease payments that are cheaper, drive it for a few years, have some fun with it then trade it in...i mean i can see if u had a Accord, RSX-S...But to lease a EP..ah stupid IMO

[audomatik]

Yes, I make damn good money, but I also have other bills. I have school loans to pay off and credit card bills from fixing my old car. Thats why leasing is affordable now. In 4 years, when I have no loans and bills, it will be easier to buy a car rather then lease. But I really needed a new car and the payments fit into my budget. I could buy the car, but my payments would be $100 dollars more then to lease. If I didn't have the $1700 for transmission work and other stupid shit for my old car and $6500 student loan then I'd be buying the car. I have no problem with leasing, its all just opinions... you have yours, i have mine... everyone is entitled to there own

[rgGolf4]

Bah, leasing isn't that bad if it fits YOU! Now, many of you have expressed your feeling on leases, but I have leased two cars...the EP being my second and "traded" in my first. I haven't had a bad experience yet. Its not for everyone, but its also not the worst thing you could do.

I mean, the people that buy take a huge hit just in the first year of ownership...depreciation sucks. So to say that buying is more financially responsible isn't completely true. Buying certified used is probably the safest way to go.

But honestly, I'm not gonna want to drive a tiny Honda for the next 10 years. I'm 25, having fun, and my next car will be bigger and probably used. The way I look at it is that for 4 years, I'll have a reliable car and under warranty (got me the 4 year). At the end, I give it back and look for something else.

Cars are not an invesment. If you think so, its the worst investment ever.

[FirstImport02Si]

Hey I'm not retarded, none of you are telling me anything more than I didn't know when I signed. I know I'm renting it, I WANT to rent it. I don't want to own a Honda for 10 years, or any other car for that matter. I have had quite a few cars already and I get sick of them quick. So basically what happened before was I would buy a car (finance to own) pay the first year strictly to interest, knock a tiny amount off the second year, and when I went to trade it in I was hugely "upside-down" every damn time. So I got sick of it, decided that if I was going to continue to get a new car every 2 years or so, that I should just lease - that way when my "NEED IT NOW" side kicks in, I can just give the car back without giving a damn how much its worth or how much I owe. The only thing I'll need to worry about it extra miles, but like I said, there are ways around that too. So leasing is not for everyone, but it is absolutely the way for me to go for the next 10 years or so. I wish I could lease my girlfriend and trade her ass in every 2 years.

[spydur]

Originally posted by FirstImport02Si

I wish I could lease my girlfriend and trade her ass in every 2 years. [/B]


This is the best quote of all! If you can figure that love/lease transaction out, you'll have alot of guys asking how you did it!

[IceD out N CALI]

with the ep's low resale value, those who leased(expecting/wanting to trade in their car in 3 years) wont have to worry about it's low resale value:)