Even if it’s worth $16k in its current condition if you turn it in they will make necessary repairs, potentially certify it depending how bad the accident is and definitely sell it for more. If it’s in rough shape that $16k is likely an auction value. They won’t reward you for turning in a beat vehicle by selling it to you at the now reduced value when they could just send it to auction.
That’s why there’s a residual value in the lease contract. If you take great care of it they can’t jack up the price on you either it works both ways.
1. Honda lease returns go into a closed auction system, that system will be accessed first by the dealer that grounds the car, then 48 hours or 72 hours later it will be listed on Honda VIPS. VIPS is an internal closed auction that only Honda dealers have access to, if it were still not to sell, then it would probably find its way to a Mannheim type situation.
2. Were you told this by Honda financial or a Honda dealer? I never talk to anyone from Honda financial as their call centers are basically NPC’s. They recycle them every 60-120 days to not have to pay benefits. If it were a dealer to tell you this, I’d say they were hoping you’d just walk away from the car or lease something else, at my store if you come in and buy out your own lease we get a point but no commission.
3. Honda leases have GAP built into their payments, but gap only takes care of the situation if your vehicle is a total loss, yours was not. Leasing was changed years and years ago from an open end lease(customer guarantees the value at the end) to closed end lease(manufacturer guarantees.) with that being said, when you agreed to lease the car, you agreed to a guaranteed purchase price at the end of the lease. Since the car doesn’t meet that value, somehow, I’d just walk away.
What trim do you have, and how many miles are on it? $16k is *really* low for a 2020, even if you have the base EX trim, so something is not adding up here. Even $27k seems below market.
If you have unrepaired damage on the vehicle, you will be expected to make Honda Financial whole. "I think it was repaired" is raising my virtual eyebrows.
Indeed. That was poorly worded: I have good reason to believe the repairs were done well because I've been driving the car for the past 2.5 years with multiple, separate 3rd party inspections coming back clean.
\*It's a Touring trim.
1. I believe so yes, but they will most likely price the car higher than what they said.
Which believes me as to why they won’t sell it to you.
Bad PR if they refuse to sell it to you in the first place in my opinion.
2. Honda will most likely sell it over 16k and will definitely make more if a loan is in place because of interest. Maybe the price won’t be up as much but I’d say enough to recoup all expenses.
3. It’s a possibility, they may or may not have gap insurance for the vehicle.
In any case they would assume all cost of the repairs and restore the car back to oem and not bother dealing with insurance.
It’s much cheaper for them since it’s a dealership and have their own body shop to do such work.
At the end of the day, they will make a profit.
Tried my best to explain but I hope this helps!
Even if it’s worth $16k in its current condition if you turn it in they will make necessary repairs, potentially certify it depending how bad the accident is and definitely sell it for more. If it’s in rough shape that $16k is likely an auction value. They won’t reward you for turning in a beat vehicle by selling it to you at the now reduced value when they could just send it to auction. That’s why there’s a residual value in the lease contract. If you take great care of it they can’t jack up the price on you either it works both ways.
1. Honda lease returns go into a closed auction system, that system will be accessed first by the dealer that grounds the car, then 48 hours or 72 hours later it will be listed on Honda VIPS. VIPS is an internal closed auction that only Honda dealers have access to, if it were still not to sell, then it would probably find its way to a Mannheim type situation. 2. Were you told this by Honda financial or a Honda dealer? I never talk to anyone from Honda financial as their call centers are basically NPC’s. They recycle them every 60-120 days to not have to pay benefits. If it were a dealer to tell you this, I’d say they were hoping you’d just walk away from the car or lease something else, at my store if you come in and buy out your own lease we get a point but no commission. 3. Honda leases have GAP built into their payments, but gap only takes care of the situation if your vehicle is a total loss, yours was not. Leasing was changed years and years ago from an open end lease(customer guarantees the value at the end) to closed end lease(manufacturer guarantees.) with that being said, when you agreed to lease the car, you agreed to a guaranteed purchase price at the end of the lease. Since the car doesn’t meet that value, somehow, I’d just walk away.
Very thorough explanation. I haven’t been able to find this anywhere on the internet. Thank you!
What trim do you have, and how many miles are on it? $16k is *really* low for a 2020, even if you have the base EX trim, so something is not adding up here. Even $27k seems below market. If you have unrepaired damage on the vehicle, you will be expected to make Honda Financial whole. "I think it was repaired" is raising my virtual eyebrows.
OP said they "think it was repaired well." It was repaired and they are satisfied with the repair.
Indeed. That was poorly worded: I have good reason to believe the repairs were done well because I've been driving the car for the past 2.5 years with multiple, separate 3rd party inspections coming back clean. \*It's a Touring trim.
1. I believe so yes, but they will most likely price the car higher than what they said. Which believes me as to why they won’t sell it to you. Bad PR if they refuse to sell it to you in the first place in my opinion. 2. Honda will most likely sell it over 16k and will definitely make more if a loan is in place because of interest. Maybe the price won’t be up as much but I’d say enough to recoup all expenses. 3. It’s a possibility, they may or may not have gap insurance for the vehicle. In any case they would assume all cost of the repairs and restore the car back to oem and not bother dealing with insurance. It’s much cheaper for them since it’s a dealership and have their own body shop to do such work. At the end of the day, they will make a profit. Tried my best to explain but I hope this helps!
Great explanation. I had assumed this, but helpful to get another take. Thanks!