Topic: Buying a car at lease end

[skylark]

I know of a 2005 Accord coming of lease in Jan with 30000km. The buyout is $15k. How does it work if I wanted to buy this vehicle presently leased by another person at lease end. I assume its through Honda, but was wondering if they allow this or if they would want the car back due to low km. Any tips would be appreciated.

[vdk]

You need to take over the lease before it ends. Usually Otherwise the car will go to auction (or the dealer). 

[erich]

I recently bought out my Civic at the end of the lease.
Sent check to Honda Financial, received papers saying that the car is mine.
I will have to go to Ragistration and get a new licence, with the line about the lease removed.
In your case there would probably be another step - tranfer ownership from "other person" to you. In Ontario it might involve taxes or emissions test.

[tpl]

Erich I think your method may involve paying tax twice as there are two transfers of ownership.

This way should work.   Lessee and buyer go to the dealer the car came from... dealer has to cooperate here.

Lessee tells dealer that he will hand the car back, buyer tells the dealer he will buy it immediately that instant for the buyback price.

Buyer gives the cheque to the leasing Co Via the dealer. dealer "sells" the car to the buyer for that amount and send the money to the leasing co who get their money.

Dealer has no work to do  at all and gets no money but the only way for the dealer to get money on a lease return is to "buy" the car from the leasing Co and try to sell it himself.  Dealer may want a couple of $100 to do "paperwork"

GST/RST only paid once

I have heard this works best if the lessee is going to get another car from that dealer...

[airbalancer]

Take over the lease with a month to go , probably pay less tax
In Ont you will need an etest and cert done

[johngenx]

What about..?

Have the owner call Honda Finance and get a cash purchase price as at a certain date, shortly before the end of the lease, but don't leave it too long.  Should be VERY close to the final buyout, but a little higher.  Have the leasee arrange to buy the car, but tell Honda Finance that you will be the purchaser.

I'm not sure about this, but I wonder if it would mean only one transfer of ownership. 

It's so much simpler in Alberta where there is no tax on private used car sales.

[ucda]

Erich I think your method may involve paying tax twice as there are two transfers of ownership.

This way should work.   Lessee and buyer go to the dealer the car came from... dealer has to cooperate here.

Lessee tells dealer that he will hand the car back, buyer tells the dealer he will buy it immediately that instant for the buyback price.

Buyer gives the cheque to the leasing Co Via the dealer. dealer "sells" the car to the buyer for that amount and send the money to the leasing co who get their money.

Dealer has no work to do  at all and gets no money but the only way for the dealer to get money on a lease return is to "buy" the car from the leasing Co and try to sell it himself.  Dealer may want a couple of $100 to do "paperwork"

GST/RST only paid once

I have heard this works best if the lessee is going to get another car from that dealer...

TPL

I don't think that will work because the lease buy out price, whether it's paid by the lessee, or by the dealer, is determined by the lease and the taxman will expect his GST and PST even if it's the dealer who "buys" the vehicle.  Many dealers may not be aware of this.  The better route is to have the lessee buy the vehicle so the lessee can use it as a trade-in to offset the tax on the next vehicle he buys or leases, or, if it's a walkaway, just return the vehicle to the lessor.  Of course, the lessor will then likely want more money for it when they resell it.

[tpl]

I don't think that will work because the lease buy out price, whether it's paid by the lessee, or by the dealer, is determined by the lease and the taxman will expect his GST and PST even if it's the dealer who "buys" the vehicle.  Many dealers may not be aware of this.  The better route is to have the lessee buy the vehicle so the lessee can use it as a trade-in to offset the tax on the next vehicle he buys or leases, or, if it's a walkaway, just return the vehicle to the lessor.  Of course, the lessor will then likely want more money for it when they resell it.

You may well be correct but I don't think so.   If the car is returned to the dealer ( lessor's agent in effect)  no taxes are payable UNTIL the vehicle is disposed of to another owner. After all the vehicle is already "owned" by the Dealer(Lessor)... that's the point.  If the lessee buys  the vehicle then they have to pay the taxes which they will effectively get back when they trade it in. If another buyer buys that trade-in they will pay taxes.    My way just short circuits that if the lessee was going to walk away anyway and has a willing buyer for the car.   The governments still get the same amount of taxes... one set.

If the lessee buys the vehicle  he has to pay taxes. IF he then sells it on to a private person ( not a dealer as a tradein ) they will have to pay taxes   that's two sets of taxes.

[BJB]

Call the finance company and ask them.  When my murano came off lease my parents ended up buying it (even though it was in my name)...don't think it cost anything and was very simple

[skylark]

Thanks for all the info, If the dealer will let me buy the car when its turned in, I will pay both taxes and possibly an admin fee. The car would need to be cert and e tested. The person leasing the car is not getting another vehicle of any kind, so as tpl pointed out the dealer may not cooperate as the car could be bought by the dealer and resold on their used car lot at a higher price. I am still waiting on word if its a 4 cyl or 6 cyl version, I believe its EXL because it has leather and heated seats. If its the model and cond I want I will contact the dealer and inquire, If they are not helpful there are plenty of used cars out there.

[articsteve]

AB offers the best route.  However, leasee and potential buyer must "tight" for this to work.

[Canada Stig]

Honda Canada will only sell a car that is leased to one of 2 people:

- The registered Lessee OR
- A Honda/Acura dealer.

Nobody else can buy it directly, so you either have to take over the lease ($450 admin fee), buy the car after the owner buys it (and pay the PST/GST on his purchase plus the PST on the new total) or work out a deal with the dealer.  However, I suspect this is one the dealer may want to keep, so that may not be too easy.

But, $15K for an 05 Accord is not a great purchase for the dealer, even with 30Km on it.  I suspect they can pick up equivelant cars at auction for $10-11K.  It is a good deal for you though since the car is low mileage and you (apparently) know the history.

Lease residuals from 3 or 4 years ago are way higher than current wholesale prices due to over-optimistic manufacturers.   Leases signed since about January 2007 tend to have more realistic residuals.

[tpl]

So the doing a deal with the dealer may be the way to go on a Honda then.   IF the dealer will go for it...and you suggest that the "price" of the car in question might be to rich for a dealer to want to keep it as opposed to an instant few hundred "admin fee" and never having to see the car again.