A different car purchasing question

[sam_gordon]

This is not a "what kind of car to get".

My mom (82) has been leasing cars for quite a while. I believe her and dad were leasing before he passed away. They liked the idea of new cars every three years. OK, whatever.

My mom's current lease is up in July. She asked me my opinion of what to do and I'm torn. Her current car has 14K miles on it (yes, she averages <5K miles/year).

She can buy out her lease for $24K
She can lease a new vehicle for three years.
She can purchase a new vehicle.

My gut says "buy out the lease". 14K is nothing (Honda). The downside is while the vehicle is fine, it's a little larger than what she'd really like (length and width), has bells and whistles (her words) she doesn't use, and will soon be out of warranty (not sure how much that matters, but is a factor). She does like it sits up higher than other vehicles.

Whether she leases or purchases new, she gets a new warranty, so anything breaks, it should be covered. She can get a vehicle she's more comfortable (smaller) driver.

If she leases, if she passes away before the lease expires, we turn in the car with a copy of the death certificate, and we're out of the lease (that's what the dealership has told her). If she buys hers or a new vehicle, the estate would be on the hook for the remainder of the payments, but would have a low mileage car to use/sell.

I don't know if she purchases how long a loan would be.

She's planning on this being her last car purchase. I suggested just turning the current car in and not getting another one, and she said she still needs it. I can't argue as I'm not around her to see her driving skills.

And just in case it's a factor, I'm a 13 hour drive from her. My sister is ~16 hours. We're the closest family members.

 

[Dan Murphy]

She can buy out her lease for $24K

"buy out the lease". 14K is nothing

Just for perspective, 24 or 14??

 

[sam_gordon]

Just for perspective, 24 or 14??

The purchase price would be $24k.
The mileage on the vehicle is 14k (basically brand new).

Sorry for the confusion.

 

[Dan Murphy]

she leases, if she passes away before the lease expires, we turn in the car with a copy of the death certificate, and we're out of the lease (that's what the dealership has told her).

A thought here.

https://trustandwill.com/learn/what-happens-to-a-car-lease-after-death

 

[sam_gordon]

A thought here.

https://trustandwill.com/learn/what-happens-to-a-car-lease-after-death

Thanks Dan. I asked her that question and she said what the dealership told her. If she does decide to lease again, I'll strongly suggest she ask the dealership to show in the paperwork where it says that.

 

[Genie+]

What’s the asking price today on the car model/miles she has today? Between $25-30k?

 

[leebee]

Thanks Dan. I asked her that question and she said what the dealership told her. If she does decide to lease again, I'll strongly suggest she ask the dealership to show in the paperwork where it says that.

DEFINITELY get this in writing.

 

[VandVsmama]

Buy out the lease for $24k. Hondas retain their value really well AND they are super duper reliable cars. If she only drives it 5k miles/year on average, then she'll never even get to the point where you have to do major maintenance on it...just minor stuff like an oil change periodically.

...speaking from the perspective of a household that has driven Hondas forever and 1 of ours has 189k miles and the other one has 160k miles and still going strong. Our Honda minivan finally died at 250k miles.

 

[kdonnel]

And just in case it's a factor, I'm a 13 hour drive from her. My sister is ~16 hours. We're the closest family members.

I'm not sure what advice to offer on the car, but you and your sister need to start talking now. I was only 2 1/2 hours from my dad and it was way to far.

 

[lovesmurfs]

If the size is too big for her, I'd start shopping for a new car, to buy, not to lease. We leased a Honda Civic once, and everything the dealership told us was not honored when the lease was up.

 

[sam_gordon]

What’s the asking price today on the car model/miles she has today? Between $25-30k?

About that. I'm not sure her trim level, but doing a quick google search shows $20-27k.

 

[sam_gordon]

I'm not sure what advice to offer on the car, but you and your sister need to start talking now. I was only 2 1/2 hours from my dad and it was way to far.

Mom has looked at some retirement communities near Sis. I agree it would be good for her to be closer to one of us.

 

[Dan Murphy]

A basic Honda Civic goes in at about $25K. Smaller, new warranty, less whistles and bells, though still enough. Great car!!

 

[thanxfornoticin]

We literally just went through a parent passing with a car under lease. The lease did NOT just go away upon his passing. Make absolutely certain whoever is saying something like that knows exactly what they are talking about legally. It's not our experience, but her state could be different. The estate had to pay off the lease and then a family member made a really good deal with the dealership to purchase the car as a used vehicle.

I'd highly recommend another lease on a smaller car - as low as you can go on the mileage and price. It'll easily be the most economical for her. Buying the current car (3 year lease?) means it's probably not under the original warranty after 36 months, and they'd likely try to upsell her on more coverage. A new lease would be cheaper, a vehicle sized more for her needs, and under full warranty. One option I would highly recommend you check on - can she pay for the entirety of the lease early, without penalty? I expect the answer would be yes. If so, lease now, perhaps pay double the lease payment each month and pay it off early (the payments will still be cheaper than buying a new car or buying out the current one). If the lease is paid off, the estate's only responsibility would be to return that car.

Good luck with your decision. Personally, I hope she's looking for another lease in 2028!!

 

[hertamaniac]

I normally don't think leasing is a good idea, but in this scenario, I think it has merit (warranty peace of mind). One thing that I keep hearing about is the inspection fee(s) that some dealerships employ when a customer is returning a lease.

They claim that the disposition fee ("normally" $350-$450, can creep upwards of $1-1.5K) is to ensure the vehicle meets the condition(s) for resale. I have also heard that many customers have either filed complaints and/or litigation as it was not part of the original lease agreement terms. I would be very sure that this is brought up and, hopefully, not shown in the lease contract.

My mother is about the same age but refuses to buy/lease a new car. Here insurance would likely drop due to the advances in safety features, but she doesn't want to forge ahead even if it is the exact same make/model and many years newer.

 

[_19disnA]

I would get some document in writing from the dealer about that lease end comment. Sounds more like a sales pitch the dealer will later deny or say your mom 'misunderstood' her. My general thought is that something like a lease car is property someone else will inherit and their estate will be responsible for. I have never heard where leases automatically terminate at death, that just doesn't seem reasonable to me.

If this will likely be her last car, a new vehicle lease/purchase makes sense since there will be a longer warranty than buying out her current lease. Lots of companies are trying to sell extended warranties which makes me think they are money-makers for the people doing the selling. At her age lease vs buy also makes sense since the final ending value of the vehicle is fixed and then her estate won't have to deal with the hassle of trying to sell a used car.

The advantage to keeping her current vehicle is she is already familiar with it and the various features. New cars all tend to have LOTS of seldom used features that are more of a nuisance compared to something of value that makes driving easier. Many things seem like technology for the sake of technology, like car companies are all in some sort of race with each other to see who can add the most features to their vehicles.

 

[mjkacmom]

Buy out the lease for $24k. Hondas retain their value really well AND they are super duper reliable cars. If she only drives it 5k miles/year on average, then she'll never even get to the point where you have to do major maintenance on it...just minor stuff like an oil change periodically.

...speaking from the perspective of a household that has driven Hondas forever and 1 of ours has 189k miles and the other one has 160k miles and still going strong. Our Honda minivan finally died at 250k miles.

Honda family here, we drive them into the ground (literally, all have ended up towed to either our mechanic or driveway to be donated to charity), currently have 2 2007 civics, 1 2012 civic, 1 2014 accord, 1 2016 odyssey. One of the 2007’s is at 175k.

 

[VandVsmama]

Given your mom's age, I think it's a really bad idea to have her lease a car going forward.

 

[sam_gordon]

Given your mom's age, I think it's a really bad idea to have her lease a car going forward.

OK. Can you explain why?

 

[Forevermarypoppins]

SO many variables to consider!

#1 there is what she wants and needs now
#2 at her age anything can happen today/ tomorrow/next week and then what?

I would be leaning more towards #2 and what's best.