Buying Out Lease Early

[Silver Surfer]

Hi all,

When I first agreed to lease my clarity, I wasn’t sure I would like the car fully to purchase it later on. Well, a year goes by and I love this ride. I’m interested in buying it out early. My questions are pretty easy. Has anyone done this before? What are the benefits of doing it? Are there any cons? As there anything I might be overlooking here? Thanks in advance!

 

[Frankwell]

Several people recently have bought their Clarity at the end of their lease for several thousand less than they are currently going for on the used market. I think at least one person wasn't planning to keep the car but bought it at the end of the lease specifically so that they could turn around and sell it for a profit. However whatever the motive, it seems like everyone who went to their dealer first to initiate the buyout received a runaround and misinformation like being told erroneously that Honda is no longer allowing buying out the Clarity at the end of the lease. When they instead skipped the dealer and contacted Honda finance directly they had no problem and everything went smoothly. In fact if I remember correctly, one person sold their Clarity to a Honda dealer who was willing to pay more than the residual, Honda finance arranged for it to all be done in one transaction, i.e. lease closeout, sale to the Honda dealer, and cash in their pocket in one relatively easy transaction. Apparently that specific method only works if selling the car to a Honda dealer.

Of course that is all just background for your question, as I have not heard of anyone recently buying out their Clarity lease early. But as with the previous examples I would suggest don't bother contacting your dealer but instead contact Honda finance and see what your options are. Whether there is any benefit to buying it out early if you are planning to keep the car, I don't know. I think usually people buy out their lease early because they plan to sell or trade the car.

 

[Jim Matthews]

I did something similar with my KIA. When I recognized that the car was worth *more* than my buyout price I realized my insurance coverage benefited the leasing company, not me. I'm also way over the alotted miles so buying and driving it another year made fiscal sense.

If your Honda is worth more than you owe (at buyout) you're loaning the leasing company money and insuring their profit.

I wouldn't expect anything better, or even affordable in the next year to 18 months.

 

[ENirogus]

When you lease a car, you are renting it. You owe the total rent. Thus there is no financial reason to buy out your lease 'early' as that would simply amount to paying all the rent due in advance. Unlike a loan which there can be an advantage to paying it off early if it is allowed

 

[JustAnotherPoorDriver]

When you lease a car, you are renting it. You owe the total rent. Thus there is no financial reason to buy out your lease 'early' as that would simply amount to paying all the rent due in advance. Unlike a loan which there can be an advantage to paying it off early if it is allowed

One big reason to buy it out early is if you want to sell it now and think that used car prices will go down. Doesn't apply in this case.

 

[ENirogus]

One big reason to buy it out early is if you want to sell it now and think that used car prices will go down. Doesn't apply in this case.

Fair point
money now vs money later means there is a limit to how early you should pay off
couple months, no big deal
couple years...it would depend

 

[neal adkins]

Hi all,

When I first agreed to lease my clarity, I wasn’t sure I would like the car fully to purchase it later on. Well, a year goes by and I love this ride. I’m interested in buying it out early. My questions are pretty easy. Has anyone done this before? What are the benefits of doing it? Are there any cons? As there anything I might be overlooking here? Thanks in advance!

I refinanced my lease into a conventional loan with my bank then just paid off the loan. It was nice to have my bank help with the paper work.