By on September 4, 2015

2012_Toyota_Prius. Photo courtesy

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:


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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50 Comments on “New or Used: Terminating the Terminal Lease Deal?...”

  • avatar


  • avatar

    This one is a no-brainer. Buy out the Prius in June for $16K. Driving a lot is never an excuse to replace a 2 year old car that gets great mileage with a new car that gets average mileage.

    • 0 avatar

      That’s probably what will have to happen to keep from losing too much $$ on it.

      Drive it until April, see what trade value you can get and if it isn’t close to the buyout/payoff, buy the Prius and keep it. I’ve had leases that were slightly over in mileage that I’ve traded in early and actually had some equity toward the next deal.

    • 0 avatar

      Yeah, we ran into this when my dad leased a car on behalf of a friend (BIG mistake). She went waaaaay over the mileage, so we had no choice but to buy it and then re-sell it privately. You can do that, if you really dislike the Prius. But OTOH, the Prius will be reliable and efficient for years to come. It’s an ideal commuter car. I say buy it out at the end of the lease and drive on.

    • 0 avatar

      The other reason it’s a no brainer is that the Prius is a fantastic car for long term ownership.

      We have 11 years in to ours, and it keeps on giving. We hit the payoff points long ago, and it continues to be a reliable daily driver. I have every reason to believe it’ll last another 10 years on its current duty cycle.

      The Prius may be a little bland to drive, but it’s fantastic to own. It’s an owner’s car as much as the German cars are driver’s cars.

      Keep the Prius. It’s a good enough match for your needs that you chose it in the first place, and it’ll keep on doing what it does for a couple of hundred thousand miles or 20 years, with minimal maintenance and minimal fuel. If she gets tired of driving it, keep it in the family.

  • avatar
    Arthur Dailey

    Lang is worth the price of admission. Reading his submissions i like taking a course on being an informed automotive consumer.

  • avatar

    There’s an awful lot on math making your situation seem complicated, when it’s not. If you like the Prius, and its suitable for your family, keep it, drive it, maybe even enjoy it. Only look at the odometer to make sure you’re doing all of the maintenance on time.

  • avatar

    I think the only way an early termination makes sense is if the maker you’re buying form is running a take away campaign that in part absorbs some of that early cost for lease termination — but you’re so over and still so far out I don’t see that happening.

    It’s a Prius, generally as reliable as a sunrise and she is driving A LOT – just keep it and buy it. They hold their value (not quite as well as say 5 to 7 years ago but still near the top of the class) and you should get years of use out of it.

  • avatar

    Based on what I’ve seen, one would be hard-pressed to find a clean 3-year old Prius with 50k miles on it for $16,400. Plus, in this case, you know who’s driving and maintaining the car. Unless your payments on the lease are exorbitant, or your abuse the car and don’t want it after the lease, finish the lease then buy the car. If you hate the car, then buy it and flip it… your loss would likely still be less than taking an early lease termination.

  • avatar

    Yep. The choice here is between throwing money down a hole (paying the lease overage) or getting a very good deal on a used Prius. I know which one of those I’d take, even if I were just going to turn around and trade the used Prius.

  • avatar

    ?? You leased a _PRIUS_ ?!?! .

    Kidding , I say keep the damn thing but never ask me to drive it , she can .


  • avatar

    What’s the point of leasing a Prius in the first place? Why lease a vehicle that will go 200k miles and return 50 MPG?

  • avatar

    Man, I’d pay whatever it took to avoid driving a Prius for the next ten years.

  • avatar

    What about trading it in on another Toyota? It seems they would be more likely to eat a loss on high mileage or early termination if you purchase another vehicle from them. Maybe wait until gas creeps back up, and Priuses’ values rise. If the car is really worth more than the payoff, I would imagine the dealer would be happy to take it off your hands and put you in a brand spanking new 2016 Prius.

    I ponder this as I reach 2 years in my Prius, averaging more than 12,00 a year also. I walked away from a very early termination on my last Prius after just a little over a year with no penalty. Gas was over $4 a gallon then.

  • avatar
    an innocent man

    It’s a simple rule: buy Japanese, lease German.

  • avatar

    Miata? The answer is C4 Vette and gold chains.

  • avatar

    “Get a good lawyer, trade in the wife (it’s her fault after all”

    This works for Trump.

  • avatar
    30-mile fetch

    Chuckling at Steve’s last paragraph. Considering how disparate the choice is between a leased Prius and a new Accord, that third option isn’t too out of line.

    A 2013 Prius 3 with 55K miles (probably where you’ll be with yours by next June) is worth ~$15K private party now. So whether you let the dealer beat the holy living cash out of you terminating the lease, or sell it right after you buy at lease end, you are going to lose money.

    Just buy it and keep driving it. If you get bored with it, take it to the track:

  • avatar

    In my neck of the woods, trade-in value is about high-$13k for a car in top condition and 40,000 miles. At around 55,000 miles in the same condition, it’s worth less than $13k. Next June it’ll be even less.

    18,000 extra miles cost you $4500. If it’s a closed-end lease at $16K value, the car’s lower value already covers about two-thirds of the mileage expense. So the extra mileage cost isn’t as much as you think. But buying your car at $16k, rather than just handing over a car worth $12k when you’re done with your lease, may cost more than you bargained for. You’re instantly way upside down in this deal.

    I say ride it out to the end of the lease, and see if Toyota or some superdealer group offers a sweeter incentive that appeals to you. And if you really like the Prius, dump this one and buy a newer one with fewer miles instead of the buyout on your lease. If you’re buying the next car anyway, why buy one you know is selling for $4k or more than it’s worth?

  • avatar

    Keep the lease and buy it out, I doubt you will be driving it for ten years with the mileage your wife is driving but gas will go up and you will be glad when it does you kept the Toyota, I get the appeal of a lease low payments but when you drive a lot of miles you can not lease simple as that.

  • avatar

    Miles cost money.

    Whether it is in a per mile penalty under a lease or in a lower resale on a purchase miles cost money. If you go into an Accord you’re just going to put a lot of miles on that and lower its value.

    Keep the Prius.

  • avatar

    so, if they buy it, do they not have to pay the mileage charges?

    Either way they’ve not been paying enough each month considering how much they’ve using it.

    A Prius is a good car to take a longer time paying for it due to its low running costs and reliability.

    “It’s a simple rule: buy Japanese, lease German.”

    I don’t get this. How does leasing sidestep the downsides of a just out of warranty POS car. There is no free lunch.

    • 0 avatar

      You would have turned the car in at the end of the lease, when it’s still under warranty. Any reliability issues would be someone else’s problem.

      But, it isn’t cheap to do that….

  • avatar

    Blame her as it’s obviously Her fault for driving too much considering that the Prius is on a lease!

    Buy out the Prius and enjoy the car! It should last a few years as it appears that she really likes driving it.

    Better yet, have HER PAY for it!

  • avatar

    Check what the payoff is now. Might be worth it to purchase it now rather than make another year of lease payments than purchase. Rates very low now, who knows what a year from now will be.

    Toyotas and Hondas are often worth more at end of lease than residual vaule because they aren’t inflated as an incentive.

  • avatar

    Why would anyone feel screwed to be required to pay for the miles they drive? The miles driven over average are more expensive because the impact the vehicle’s value at a higher rate.

  • avatar

    Good comments from the BnB. One thing to add to the equation…
    Here in good old PA, the sales tax on a car purchase is based on the negotiated price of the vehicle minus the trade-in value of your current vehicle. For some states (like our neighbor, Ohio) this can only be done on the purchase of a new car. 7% (our sales tax here in good old Allegheny County) of $14-16k is significant when considering whether to buy your car outright after the lease is up, or turning in the keys.

  • avatar

    Sounds to me like someone fishing for outside validation and blessing to do the stupid thing he really wants to do – dump the Prius and buy something else.

  • avatar

    Why don’t you just call the bank and buy extra miles? It’s often cheaper to do so during the lease than at the end, and many times the bank will even no spread the cost over your remaining payments. Much smarter than buying the vehicle out for $4k too much and paying sales tax on the purchase.

  • avatar

    I don’t think that I have ever had a time when it made sense for me to lease. Someone here in the Houston area was advertising a lease that sounded great but had a 10k/yr mileage allowance. That would take about 5 months for us. I do think the Prius is a good move for a daily driver. For all those who might comment that they are soul sucking or life is too short, that’s exactly what I think about spending a small fortune on gas.

    • 0 avatar

      Leasing is basically good:

      1. Person drives 12k or less per year.

      2. Good for businesses who can deduct the lease payments

      3. People who can’t afford the cost of a new vehicle

      4. People who want to switch vehicles every few years at a more modest price instead of buying a vehicle then selling/trading it every few years which is more costly

      • 0 avatar

        5) And people who have no issue with always having a car payment, not everyone is in this camp. I can not lease I drive about 25,000-30,000 miles a year, I get everyone wants the latest and the newest for a pretty low payment but you will always have the payment.

  • avatar

    If you have kids or are planning on having kids, the Prius would be a great first car for your grandchildren.

    • 0 avatar

      Will a backward facing infant car seat fit in that car behind the driver?

      • 0 avatar

        Rear facing infant car seats fit fine in our Prius.

        We currently have a rear facing 8 month old, and forward facing 5 year old. Three across is a stretch, and packing for multi day road trip with two kids is a stretch. But it’s just fine for local running about.

        My wife did pick a seat which fit our car. The ginormous baby bucket seat we had with our first kid (graco snugride 32?) fit, but it only fit because we’re short. The more modestly sized bucket seat that we have with our second kid (cybex something or other) should fit behind the driver for with most drivers.

        BTM, I was pretty nonplussed by a Grand Marquis (poster platform) when that damn thing had less space for our infant car seat than our Prius. The Grand Marquis was wider, but it had less cuar legroom than our compact back home. [Shakes head].

        The Prius has really usable interior space. Yeah, the hard plastics looks like a kids toy (but has withstood the test of time) and, after survivng our late 20s and two young children, the car smells like a Cessna inside — but it’s more useful, more efficient, and more reliable that any of the other small passenger cars I’ve owned. When we cross shop it with new cars, the Prius we have keeps winning.

  • avatar

    May I add the safety perspective. The prius is not nearly as tough in IIHS crash tests as the accord:
    Prius does not score top marks in:
    Moderate overlap, neck injury
    Side, structure and safety cage
    Roof strength, good score but Accord is better
    Small Overlap, marginal structure (very bad score!!!)
    Accord aces… everything?

    Thats a no brainer to me. If your loved ones safety in a crash with a drunk driver or texting teen is any concern, get her out of the questionable Prius and into the stronger Accord. Someones life is worth sacrificing a few thousand dollars and a dozen MPGs.

    • 0 avatar

      Either car has good survivability against another car but poor survivability against a half-ton truck. Get a 3/4-ton. At the very least, get a CUV so the bumpers are high enough to give her a chance against the trucks.

      • 0 avatar

        Be careful about 3/4 ton trucks. The ladder frame is strong but most passenger boxes are weak. The latest GM 1/2 tons and ford 1/2 tons have much stronger boxes. The newer 3/4 ton trucks don’t have to conform to improved federal roof strength standards until 2017 if I recall correctly. Until those improved roof strength designs come in I would wait before buying a 3/4 ton because they tend to pancake in a rollover. Heavy trucks with poor roof strength is a bad combination.

        • 0 avatar

          Good point on the roof strength. Perhaps a 1/2-ton is best after all. Ride and handling are also better, and it will save on fuel costs, too.

          I have been in a rollover in a 2004 3/4-ton Dodge and the C-Pillars maintained integrity, functioning as a roll bar. But that was off road at very low speed.

      • 0 avatar
        Arthur Dailey

        Sure a truck may be better in a vehicle to vehicle crash, but a significant number of automobile ‘accidents’ are of the single car variety.

        In these trucks generally fare less well than cars.

        Also trucks are less able to avoid a crash, much more prone to rollovers and take longer to stop.

        • 0 avatar

          I suppose it depends on whether a person is concerned about their own tendency toward incompetent driving or just the frequent negligence of those around them.

          My own life has never been worth much so I’ve never had to worry about it!

  • avatar

    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.

  • avatar

    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.

    • 0 avatar

      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.!generation-2-prius-hybrid-batteries/c1wlm

    • 0 avatar

      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.

    • 0 avatar

      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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