Pay off lease early so I can buy the car?

[mindaugas]

I have a massive $28k lease on a minivan (Honda Odyssey). I know it's expensive and dumb, but I have 3 kids and the van is a great size and decent on gas (for such a big car). I already made the dumb decision to lease it. I'm thinking about getting more aggressive on the lease payments to pay it down. At the end of the lease I'll be left with $19k. If I pay this down early the van will easily be worth $19k and I can finance the rest and then work hard to pay that off. So we want to keep the van and pay it off. Are there any repercussion I'm not thinking about to doing this?

[snogirl]

What are the lease payments?
When does the lease end?
Can you sell it now and buy a used Honda Odyssey?
My neighbor bought a used one for 8k and I have driven it.
I can understand why you like it plus you can fit so much into it. 
He used as a side gig as a video production company.
It is so tough to answer (I know nothing about leasing). 
Good luck

[Miss Piggy]

If you pre-pay your lease, then (God forbid) the van is totaled at some point before the end of the lease, do you get money back? What's the benefit to paying ahead?

[mindaugas]

What are the lease payments?
When does the lease end?
Can you sell it now and buy a used Honda Odyssey?
My neighbor bought a used one for 8k and I have driven it.
I can understand why you like it plus you can fit so much into it. 
He used as a side gig as a video production company.
It is so tough to answer (I know nothing about leasing). 
Good luck

Payments are $412
Ends 6/8/2018
I could sell it but would have to eat the difference and I'd rather just eat that and keep it.
We should have bought a used one to begin with, I'm an idiot.
I've used this one to haul all sorts of stuff. Seats are easy to take out and loads of room once they are. But that's a minivan in general, could have gotten a much cheaper one.

If you pre-pay your lease, then (God forbid) the van is totaled at some point before the end of the lease, do you get money back? What's the benefit to paying ahead?

That's a great question, but I think I can cover that (if lease doesn't) with my own gap insurance. Lease have built in gap coverage.

Paying it ahead means I'm left with the residual end of lease value which will be closer to what the car is worth now then if I wait for the full term. The other reason is I could get rid of that amount for the lease and then selling the car would be easier giving us another option (although we do want to keep it).

[vivophoenix]

i am confused about the early pay off as well. the only benefit would be if you sold the car and then got a higher value for it rather than waiting till 2018, but you still are out the early lease payments.

how much is it to break the lease completely?

[trialbyFIRE]

I don't think there is such a thing as 'early pay off' with leases; it is completely different than financing.

In other words, the leasing company is going to get the agreed amount either way (remaining lease payments). Where is the benefit to paying it off early?

The above reason is why you have websites like swap-a-lease, where people have to provide $ incentives in order to rid themselves of a lease.

[mindaugas]

i am confused about the early pay off as well. the only benefit would be if you sold the car and then got a higher value for it rather than waiting till 2018, but you still are out the early lease payments.

how much is it to break the lease completely?

I'm thinking about doing it early so that the guaranteed residual I have left is closer to the value of the car so it is easier to finance. I guess I'm worried it will be upside down and I won't be able to finance the remainder.

The more I think about it though, it doesn't seem to make sense unless I sell it to get out of it. If I sold it I would have to buy another minivan to replace it, and we're looking at $10k for that.

[vivophoenix]

i thought you could buy the car early, thus terminating the lease?

[vivophoenix]

i am confused about the early pay off as well. the only benefit would be if you sold the car and then got a higher value for it rather than waiting till 2018, but you still are out the early lease payments.

how much is it to break the lease completely?

I'm thinking about doing it early so that the guaranteed residual I have left is closer to the value of the car so it is easier to finance. I guess I'm worried it will be upside down and I won't be able to finance the remainder.

The more I think about it though, it doesn't seem to make sense unless I sell it to get out of it. If I sold it I would have to buy another minivan to replace it, and we're looking at $10k for that.

you are already upside down. you are on the hook for the lease payments, and then you have a vehicle that you turn back in. you own nothing afterwards.


your plan is:  to pay to rent the car ( basically paying the dealer for the value difference between it being brand new, and then value it would be, when you turned it in), then finance the rest of the value of the car.

i think you have better options. they will hurt though

[Fishindude]

Have seen a few folks do something like this; lease a car for three years, then get a loan and pay for the same car for another four years.   Seems pretty ridiculous to pay for any vehicle for that long prior to owning.   Just make the monthly payments on the lease and let them have the vehicle when lease is up.    At that point, look around and purchase something affordable.

 

[Tjat]

Seems like you're trying to convince yourself to throw good money after bad. Can you get out of the lease? (I also know nothing about leases). Seems difficult to see how spending 19K + 22 more $412 lease payments + whatever you've paid on it so far is your best option.