sleepinxlionhart

I'm planning on picking up a 2015 MDX..whatever they have left here in Southern California. Looking at either a Tech or Advance package one. I've never leased a car before, so I was hoping to see if anyone here has any advise for a newbie at leasing. Is it pretty much the same as buying? Also, I'm leasing the car for my business, but I'm pretty sure I'll end up buying it at the end of the lease. Any advise is appreciated, TIA.

pickettt

First, we'll address the business question. If you purchase the car, you may or may not have to depreciate, as opposed to writing off the entire purchase price, based on the Section 179 tax laws at the end of this year. Tax laws are constantly changing, so we don't know what the rules will be. If you lease, you can write off the payments in their entirety. Of course, so long as you can prove you are indeed using the car for business, in either case.
Now, subjectively; I was always opposed to leasing, because I keep cars for a long time. When it comes to cars, keeping them is the only financially smart move. I purchased my 2015 MDX Advance ENT SH-AWD with the intention of keeping it for a long long time. HOWEVER, after owning the car for 2 months, I'm unimpressed. Don't get me wrong, it's a very nice car. It's just not the end-all-be-all car for me. So, it sure would be nice to walk away from it in a few years and get into something better, as a lease would allow. If you're sure you like it, buy it. If you're not, lease it.
One more option; you can lease the car, and at the end of the lease term, if you've liked the car, negotiate with the lienholder to purchase the car at or below the residual value. After all, the banks don't really want leased cars back, so they are sometimes willing to make good deals.

sleepinxlionhart

Yes, I plan to write off lease payments as part of the business expense. Depending how I like the car, granted that it's free of problems, I'll most likely buy it.

Yeah, I always buy my cars too, but after opening up a business, leasing is probably the better choice for now. That's why I'm very new to this leasing thing.

I guess my biggest question is, how do I know that I'm getting a good lease. Or what is my leverage to get a good deal. I know for a fact that the car will probably be only driven 5k miles a year, so that should work in my favor.

pickettt

For this purpose, buying or leasing is inconsequential. Negotiate the price of the car just as you normally would. Your lease payments will be based on the residual value of that purchase price. Leverage? To me it's simple; they need to sell it more than you need to buy it. Good luck.

sleepinxlionhart

So one dealer quoted me a 2016 tech for 1062.34 down + 505.73 for 35 months which equals 18762.88 for 3 years or 3000 down + 464.88 for 35 months which equals 19270.80 for 3 years. My question is, why in the world would I be paying more in the long run if I put more money down. Makes no sense to me.

pickettt

Welcome to car sales, where their numbers don't make sense.

sleepinxlionhart

So apparently it was a mistake. It was then clarified to:

1st option 1076.04+518.44(35)=19221.47
2nd option 3000+464.88(35)=19270.80

Still not sure if that's a good deal for 2016 Tech.

pickettt

Before anything else, negotiate the price of the car as if you were buying it. Once you arrive at what you believe is a fair price, then the lease payments will be based on the residual of that sales price. If you try to buy or lease a car based on monthly payment instead of the sales price, you make yourself vulnerable to them. (I was an F & I manager for a number of years)

sleepinxlionhart

Oh okay, sounds like a great idea, thanks! However, how do I know that the lease is based off the residual sales of that particular price?

sleepinxlionhart

Got quoted a SH-AWD Tech for $45,210. Lease is 3000 down, 460.89+tax a month for 35 months. Lowest out of the offers so far. Good deal?

pickettt

Did you choose a 2015 because you assumed it would be a better lease? I would find out the lease payments for a 2016 and compare. I don't have any basis for 2015s, but I'm calculating the residual on 2016s to be about 64%, which is outstanding.

sleepinxlionhart

Yeah, I tried to find a 2015 because I figured it'll be a better deal. However, 2015s are so scarce these days that I think I have to go with a 2016 for one that I like. Yeah, when I saw 45,210 for a 2016 (granted it's not OTD price), I was really surprised. Pretty much 4k off MSRP.

IIDXholic

iTrader: (5)

I have a question about the lease, do you have to pay for all the maintenance and does it have to be done at the dealership? I heard Lease's cover all that, but not sure about the MDX. My co worker has a Civic and doesn't worry about that, but then again that's a Civic.....

sleepinxlionhart

So if I decide to buy the car after the lease (which I probably will) they quoted me 31k for the residual value. So 19K+ 31K is 50K for a SH-AWD Tech. Eh....

pickettt

The key is to negotiate the 31k at the end of the lease. Like I said, the bank doesn't want that car back, and will be willing to deal. It's actually about 20.5k when you factor in tax on lease payments.
Personally, I'd purchase that car for no more than 43,600. Being that the residual value is so high (you know it as resale value), if you're not pleased with the car, you can sell it or trade it after a few years and make out "okay".

sleepinxlionhart

I see. However, what if the dealer makes me sign something that "locks" me into that residual value? I'm planning on picking up the car tonight since they said the deal only lasts til the end of the month.

pickettt

Basically, it says 31K is the price of the car at that time. It doesn't lock you into buying it. Just like the window sticker on the car right now says it's 49K or so, it doesn't mean you can't walk away from it.
My advice is this, ALWAYS be willing to walk away if the deal doesn't feel right to you. Don't get caught up in the excitement of a new car. Pay what you want, or walk away. As for the deal being good until the end of the month.....that's BS. Since when did a car's value go up with each passing month?
Good Luck.

Stu's2004TL

My family, for the most part, leases. We do negotiate the price, as stated above, just like any other deal. I ask what the residual value is and the money factor (interest rate). When both are attractive, along with a great sale price, I bite.

I never do buy the cars out at the end of the lease. In my state, I would need to have the vehicle inspected, pay new tag and title fees, and other fees for the transaction. Would rather just lease a new vehicle at the same payment.

Bottom line, a lease is a long term rental. If you are ok with always having a payment, and drive within the allowed miles annually, it is a good way to go. Even Consumer Reports gave leasing a thumbs up in their issue last month.

Just come in educated and know about the fees. For the first time, leasing can be confusing.

Good luck

sleepinxlionhart

Thanks for your input everyone, especially pickettt. I pulled the trigger yesterday on the 2016 SH-AWD tech. It was a great deal IMO, other dealers couldn't match, and was asking if I mistook it for the FWD. Anyway, it drives very well. Overall very happy

pickettt

Congratulations! Enjoy it.

jchoi5

Congrats! Don't forget to share pics

beach109

You cannot negotiate or change a residual, that's the point of a residual on a lease, it is FIXED. That's why it's on the contract to start with, and does not change.

Not to say there hasn't been an oddball 3rd party leasing company from time to time that might do so, but a residual is a residual to be fixed--especially in regards to a bank such as Acura/Honda Financial.

pickettt

I was an F & I manager for years, yet you're telling me what can't be done when I've done it countless times. But I've got no incentive to argue about it. You cannot do it at the time you sign the lease, but rather, at the end of the lease.


If we all new exactly what something would be worth at the end of a fixed period, we'd all be investing geniuses. It's not a Certificate of Deposit (CD), it's a car.

pickettt

If we all KNEW, that is.

sleepinxlionhart

I'll be sure to remember your advise three years from now pickettt )

sleepinxlionhart

Thanks! Here's a pic of it's rear end, haven't had a chance to get it out of the garage lately. And I just had to throw in a pic of our Honda/Acura stable

neoshi

Who was your sales guy? I talked to Kenny and he seemed to be pretty good about meeting my goals. But I'm looking for a 2015, which is impossible to find in our town...

beach109

You've clearly not worked with a bank such as Acura Financial/Honda, at least recently. The point of leasing is to have fixed variables, not constantly flexible terms.

It does happen from time to time, for sure, but not with Acura. They will negotiate mileage overages, etc. with customers when going into another new lease, but residuals, etc stay fixed.


Good luck shopping for those of you still looking. Aside from a few odd combos or FWD cars, 2015's are gone and over with, for about a month now Time to go 2016.

sleepinxlionhart

I worked with Sarun. She's really professional, and doesn't dilly dally or play games. I'd definitely recommend her as well. Yeah, the 2015s are like gone...Thomas Acura seems to have a silver and ebony one left.

sleepinxlionhart

Sorry, I was mistaken. It was the accessories that had a half off thing going on til the end of the month.

neoshi

Thanks for the info. Yeah, I'm looking for a SH-AWD one with ebony interior. Unicorn I tell ya!

beach109

2015 MDX lease support ended on May 11th, and starting yesterday the special lease programs are on 2016's alone. Keep this in mind, as now there's even less reason to consider a 2015 if by some reason you think you can find one, unless you're buying and prefer the shifter/6-speed.