New or Used: Terminating the Terminal Lease Deal?
Steve (not Lang) writes:
My wife has a 2013 Prius with a total of 36,000 allowable miles over the 36 month lease through June 2016. The problem is she now drives more and is already at 37,500+ miles! At 0.25 cents per mile, it will add up quickly.
Should we just plan on buying the Prius from Toyota for 16,400 at the end of the lease term? Or should we take a negative equity hit today, cash out and buy a 2015/2016 Honda Accord Sport/EX? We could be looking at $4,000 in lease payment to roll into a new deal to get out of Prius. We kind of learned our lesson to not do a lease since now she drives a lot.
Over the next 10 months, she not going to slow down so we could be way over miles. Do we buy it now, wait till end of lease and then buy?
Or do we cash out, lick our wounds and get into a good, long-term traditional mom-hybrid sedan like the Accord? We already have a ’15 CR-V EX-L. Honda been great so far to us. Another issue though is we will suffer in mileage. She gets 52 mpg now.
Oh, you guys are so screwed on that lease. Since she (and you?) like the Prius’ gas mileage, you should buy and enjoy at the end of the lease so you won’t get hammered on the over-mileage charge. Nor will you roll insane amounts of debt into a car you buy right now. Early lease termination is usually an expensive proposition.
Check your paperwork, but I suspect getting a new car right now makes zero sense. What say you, Lang?
Imagine if that’s all the money you would need to spend on a car for your wife over the next 10 years. Does that sound like a bargain to you? Well, take that number, add 50 miles per gallon, and consider this whole experience a lesson learned.
Better yet, just do the numbers. The used Prius clocks the new Accord if you keep it to 200k.
Fifty miles per gallon over 150,000 miles is 3,000 gallons consumed for the Prius. On a 32 mile per gallon ride with the Accord, you’re looking at roughly 4,700 gallons over the same number of miles.
A 1700 gallon difference x $2.75 in gas equals about $4,700.
Will an Accord with 150k miles be worth $4700 more than a Prius with 200k miles? Maybe, but then you have to add the extra cost of buying the Accord. And then something may happen to the inverter on the Prius. And then…
Screw it. Just give her a skateboard for commuting and keep the Prius for yourself. Get a good lawyer, trade in the wife (it’s her fault after all), and buy a Miata which is what you should have done with this money in the first place.
Problem solved. Glad to help.
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Priuses (or Prii in Toyota-speak) hold their value with high odometer mileage. It's because they are built well and the engines and brakes don't work hard thanks to the electric powertrain. The low depreciation and maintenance costs combined with the high fuel economy make the Prius one of the cheapest cars to own per mile, even cheaper than most cheaper economy cars. In short, buy the Prius at the end of the lease. You won't find better cheaper.
Guys are you forgetting that the battery is worth 1/3 of the cars new value? gotta buy a new battery every few years. I say dump this car tell your wife to get a better job or move closer. Or buy her a motorcycle, make her ride it until she quits.