[4sallypat]

Normally, when I lease a car, the car gets turned back to the dealer at the end usually due to reliability issues or cost of buyout is upside down.

I had no idea my PHEV Clarity leased in 2018 would upset my normal routine...

Who knew the market would go upside down (used cars are more expensive than new) ?
Residual value (RV) is $14,100 to buyout per closed end lease contract.
Market value is $24,000.
No wonder my dealer has been hounding me to turn her back in - they were looking at $10K profit off my Clarity!

Market aside, this car has been exceptional - well built, good ride, excellent battery performance (still at 100-120% range).

Definitely a keeper so this car will now be in a 'forever' home...

I contacted my Honda dealer & 3 banks for their rates to buyout at RV:

• Honda Dealer quoted 7.99% for 48 months and made it mandatory to buy a $2500 extended warranty package (3rd party) tacked on.
• 2 banks quoted 3.25% & 3.99% for up to 60 months.
• My local CU came out: 2.24% for up to 60 months.

Since the battery warranty is good for another 7 years, why not.

If anyone wants to know which CU came in that low for a used car finance, ask me!

 

[obermd]

From other threads here I'm surprised your dealership would even deal. Did you basically walk into the dealership with a cashier's check from the bank to pay the residual value?

 

[DucRider]

From other threads here I'm surprised your dealership would even deal. Did you basically walk into the dealership with a cashier's check from the bank to pay the residual value?

The dealership is not a party to the lease contract and doesn't need to be involved at all with a buyout. Buyout payment is directly to Honda Financial as they own the car and are selling it to you at the price set at lease inception.

 

[4sallypat]

The dealership is not a party to the lease contract and doesn't need to be involved at all with a buyout. Buyout payment is directly to Honda Financial as they own the car and are selling it to you at the price set at lease inception.

Correct, I dealt with the leasing company (Honda Financial Services) - they honored the closed end lease residual value which is very honorable.
My CU said my Clarity is valued at: $24,500 and since my residual is at $14K, they said I could get a cash out loan up to $7,500 on top of the buyout price!
Even a bank is willing to give you cash on top of the loan because the value of the car currently is so huge.
And all this time I thought a car is a constantly depreciating asset.

Currently due to the upside down market, all lease purchases must be done only by either the leasee (customer) or any franchised dealer - I can NOT sell to a third party like CarMax, Carvana, Vroom, etc.

Before the pandemic, you could sell a leased car to a third party and they in turn would buy it out from the leasing company, but not anymore...

 

[NeedSomeClarity]

From other threads here I'm surprised your dealership would even deal. Did you basically walk into the dealership with a cashier's check from the bank to pay the residual value?

I am the author of one of those threads. We were lured to a dealership by a Honda mailer offering excellent terms on a 2021 Clarity, which our dealer did not have and could not get. Once they heard that we intended to use CU financing buy out our lease, they offered a deal, saying they "worked with" our credit union. Apparently, what they really meant was they would finance the buyout plus thousands in extra charges,at credit union rates. It was only when we asked them to shave the fat that they suddenly discovered that they couldn't do the deal because Honda blah blah blah.

When we talked to the folks at Honda Financial they had no problem with us buying out the lease at the agreed upon RV.

 

[obermd]

I am the author of one of those threads. We were lured to a dealership by a Honda mailer offering excellent terms on a 2021 Clarity, which our dealer did not have and could not get. Once they heard that we intended to use CU financing buy out our lease, they offered a deal, saying they "worked with" our credit union. Apparently, what they really meant was they would finance the buyout plus thousands in extra charges,at credit union rates. It was only when we asked them to shave the fat that they suddenly discovered that they couldn't do the deal because Honda blah blah blah.

When we talked to the folks at Honda Financial they had no problem with us buying out the lease at the agreed upon RV.

In other words, skip the dealership and talk to Honda Financial directly.

 

[EV Nerd]

In other words, skip the dealership and talk to Honda Financial directly.

Absolutely! In my experience, the vast majority of car dealerships are lying, predatory snakes. Doesn't matter the brand.

There's a good reason that a lot of people simply call them "Stealerships".