New or Used: Terminating the Terminal Lease Deal?

by Sajeev Mehta and Steve Lang

September 4th, 2015 1:24 PM

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.

Sajeev answers:

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?

Steve Says:

$16,400

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.

#Accord #CarBuying #Lease #Leasing #NewOrUsed? #Prius #WhatToBuy

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Conslaw on Sep 05, 2015

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.

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Robc123 on Sep 05, 2015

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.

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- See 2 previous
- Mcs on Sep 05, 2015
  
  I'm guessing you don't own a Prius. I think ours has about 150k miles and the battery is fine. Even if we needed one, there are enough Priuses on the road for the aftermarket to take notice and you can get batteries pretty cheap. The battery is a none issue. http://www.priusrebuilders.com/#!generation-2-prius-hybrid-batteries/c1wlm http://greentecauto.com/product-tag/prius-2004-2009
  
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- VoGo on Sep 05, 2015
  
  Like the daily rising and setting of the sun, we can't have a conversation about the Prius without some know-it-all reminding everyone that the batteries fail every few years. Except, that they don't. The batteries are good for about 15 years and 300,000 miles. Need proof? Ask the taxi driver the next time you're in the back of one. And if the batteries finally do go, you can replace for about $2K. A non-issue, as mcs says.
  
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- Luke42 on Sep 05, 2015
  
  Last I checked, the battery for my Prius was about $3500 new from Toyota, and about $1500 for a rebuild. If those numbers took familiar, that's because they're about the same as an automatic transmission. Our battery has 11 years and 165k miles on it, with no observable degradation. I have every reason to expect that this battery will last at least 250k miles. (BTW, the physical transaxle in the Prius is very simplified, compared to a step-shift automatic (the complexity is in the software), and it has a pretty good reliability record.) The 1st generation Prii did have battery problems. Those were solved for the 2nd generation in 2004. Most of those pre-2004 batteries have been rebuilt with upgraded parts but, if you're concerned about battery reliability, stick to the 2004 and newer models. 2013 models are fine. The part that's held up the worst in our Prius is the interior fabrics. The hard plastics are doing fine. Fortunately. worn interior fabrics are easy to check for on used cars using your eyes. The rest of the car is pretty much bulletproof, and is easily repairable, provided you hire a mechanic who knows their way around hybrids.
  
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