boe_d

Hello,

I know nothing about leasing. I've always bought my cars in the past as I planned on keeping them till they die. My current 2001 TL is still in pretty good shape (other than the scraped wheels from high curbs) but I'm ready for something new.

I'd buy a new TLX if they offered a hybrid. I have little doubt within 2-3 years some of that accord hybrid goodness will make it to Acura as long as they don't f' it up by making it only about acceleration and getting crappy mileage like the RLX and the old accord hybrid.

I don't like the accord hybrid seats that much - not as comfy as my TL by a long shot. I sit in LA traffic hours at a time so I really want a comfy seat even though I don't travel that far.

I was thinking about leasing but I really don't know how it works. They want money down but you don't own the car with a lease as far as I know. Not sure what the money down is if you pay monthly unless it is like a security deposit - do you get it back? If I turn in the car with no dents at the end of a lease do I just walk away from the lease or are there any additional fees?

Sorry for the silly questions but I really have no clue on how a lease works.

AZuser

No

If the car checks out fine at end of lease, just return car and you're done. Unless you want to buy out lease, or buy or lease a new car from them.


10 Steps to Leasing a New Car | Edmunds.com

How to Lease a Car and Get the Best Deal - Personal Finance - WSJ.com

Linmk2

Leasing is an option gaining more ground in recent years. I've leased my vehicles for many years. I'm often asked the question, why? It's simple, the notes are lower than buying. For myself, it allows me to drive a very nice car for not a lot of money. It's true, I will never own the car, unless I choose to purchase at the end of the lease, but since I like driving a new car every few years, I would have a note anyway. I can best describe leasing as not buying a car, but paying for depreciation. Leasing is not for everyone. If you put a lot of miles on the car a year. If you enjoying doing extensive modifications. If you don't really take good care of your vehicle, then buying would be a much better option. You asked about money down. The money is used to reduce the capitalized cost of the vehicle. Just as a down payment on a regular purchase is used to reduce the amount of money that you finance. In reality on a lease, the money down, is paying for some of the depreciation of the car up front. Many times, as with purchase deals, no money down is required. I have been very pleased leasing my vehicles for some 20 years now. Some have questioned my logic, but it's my life and it's my money and it's my prerogative to control both.

weather

I am a leasing guy too and I would never buy a car because I like to trade often so as linmk2 said, if you put lots of mileage and don't take acre of your cars, leasing may not be the best option.

Here are the advantage of leasing:

1. Monthly payment lower than purchase (since you are only financing the non residual value of the vehicle)
2. You get to drive a new vehicle more often
3. You don't have to worry about trading your car or finding someone to buy your used car
4. If you get a lemon or get into an accident, you are not the one left holding the bag and taking the depreciation hit.
5. If you like the car, you can still buy it at the end of the lease if you are disciplined enough to put the buyout value of the lease aside so you are not financing that part.
6. You always have a car under warranty.

Disadvantage

1. You don't own the car and will always have a car payment - but unless you keep a car for great than 6 years, you are not that much ahead anyway

2. You can get dinged if you seriously neglect the car - Minor stuff are usually overlooked especially if you lease another one.

3. YOu are somewhat mileage limited - For me, it is never an issue as my toys are not used to a point where the mileage will be an issue

As linmk2 said, the money down is to bring down the monthly payment....I never do!

If you have other questions, please don't hesitate to ask....

ConradValmont

How about insurance rates when leasing? Do they require a specific tier of coverage and do you have to pay more than if purchasing?

frack

Has anyone ever had a minor accident with a leased Acura? If you have the car repaired by a reputable bodyshop....do you still pay any type of excessive wear\tear fees?

I've traded in cars that were in minor accidents, and took a huge hit on the trade in value.

weather

^^ Nope, that is the advantage of a lease. If you get into an accident and have the car repaired, you will not be responsible for the depreciated value of the vehicle.

Veterancygained

I like offering lease options for my customers. It's a great way for low mileage drivers to take full advantage of the latest models at a monthly payment you can appreciate. Here's how I like to advise:

-36 months at roughly half the payment. Instead of doing the standard 5-6 year finance purchase, you're signed for three years instead. To simplify it even further for my clients: Half the term at half the payment. 10,000 miles/yr is what we offer for the best monthly payment and incentive. You can purchase more up front--which will just bump your payment up slightly with each increment...12k, 15k

-Tackling the objection of, "Well I like to own my cars": Lets say you finance a TLX for the next 5 years. Who really owns the car? You or the bank? In a matter of 3 years, the majority of customers are already considering getting into a new car--especially if they are in an equity position. I would purchase the car if you are going in for the long term relationship and expecting to put hundreds of thousands of miles on the car. The leasing lifestyle keeps you fresh and up to date with the latest models every 3 years.

-You can do whatever you want to a leased car. You take full responsibility. I would not void your warranty though with extensive mods.


Leasing offers a ton of flexibility, here are four options you can consider before or after your lease ends:

-Return the keys and call it a day. This is especially nice if the car has depreciated greatly and doesn't strategically make sense for you to keep. Let the dealership eat the depreciation.


-Trade the car into a dealership for it's Actual Cash Value. If you want out early, keep in mind you can still trade in the car. The dealership may also make the remaining payments for you if your lease is nearly up--in order to earn your business, of course.

-Before your lease actually ends, you could try selling the car yourself to satisfy your payoff. Who knows? You might just walk away with a fat chunk of green in your pocket-- potentially for your next car adventure. You can also sell your car at anytime during your lease.

-Buy out the car you fell in love with. If the car is worth more than the residual value on the market, you just got a fat discount.


If you're looking for specifics, just consult the finance or business manager. This is what I advise my customers with everyday.

pizokk1

im thinking on getting other car but i dont really know what is the process to do that i been reading on this post but really dont know what to do how to start and consequences about my credit want to get rid of my acura to get lets say a camaro ss..

CanTex

OK, it's simple for you but this old numbskull can't get his head around it. (Not young, 28 cars in my past plus leased TLX.) If I take my leased TLX to the dealer and want to buy (or lease) another Acura, they'll just apply the payoff amount as a down payment on a new car? Or since I have no equity in the car, I'm paying the full price for a new one? I'm confused.

What about a non-Acura dealer? As to selling it mid-lease, that would either mean either selling it to CarMax or trade to another vehicle, then settle up with Honda Financial. Title transfer issues in there, of course.

My concern is my rapidly deteriorating hip that makes getting in and out more and more difficult. That low seating is awesome for driving but ingress/egress is nasty. Something will need to be done in the next 28 months.

Veterancygained

You may trade in your lease to the dealership. I'm sure you know this already- but if you log into the AFS website and go to your account details, there is a pay off amount good until xx/xx/xxxx.

You are leasing and paying every month on the non-residual value. This is the Purchase price minus the residual value. Now to get out of your lease and satisfy Honda Lease Trust, you need to satisfy one of two conditions. Payoff the entire car, or make the remaining lease payments.

Trading in a Leased car into the dealership is like trading in a used car. The value of your car will be assessed- and once they give you the trade-in-value for your car, you will weigh that number versus your payoff.

Here's an example:

Payoff Situation

I'm three months into my lease. Brand spanking new. My Acura TLX's payoff is around $40,000; but the dealer will only give me $33,000 for it. Ouch. I'm in the hole about $7,000 dollars. To satisfy AFS, I must pay the vehicle off. If I cannot pull $7,000 out of my wallet to satisfy AFS, then I can potentially finance the negative equity on top of my next car. This is deadly; but people do it all the time. Also, if I don't like what the dealership is offering, I can attempt to do their job and sell the car myself on the streets for more.

Make The Remaining Payments:

I have 33 remaining payments to make. My monthly payment is $581, including tax. Simple multiplication: Remaining payments total up to $19173. If I wanted out, it would make sense for me to trade it in or sell it myself.

Sometimes it gets really close and you have to monitor it occasionally.

Another example: A Customer has 6 remaining payments of $400/mo on their lease. Their car is worth $17,000; payoff is $20,000. Negative equity = $3000 Remaining payments= $2400. I'll take the smaller number, thank you.

I hope this makes sense. I know this can get confusing!

Veterancygained

Leasing and credit questions:

Leasing a car, more often than not, requires a higher credit score. Your money factor (similar to an interest rate) is based on your credit score. If you have a previous relationship with Honda Finance, it may offer a bump to the preferred or super preferred tier for rates.

+ Paying off a lease will have a significantly positive impact on your credit score.

- Throwing in the towel and giving back a lease will severely damage your score.

Linmk2

How about insurance rates when leasing? Do they require a specific tier of coverage and do you have to pay more than if purchasing?

As I stated in my earlier posts, I've leased a number of cars over the years, and my insurance requirements have always been the same as my purchased cars, at least in my case. You would need to discuss the insurance requirements at the dealership to make sure the requirements don't exceed what you are already covering. Of course, as with any new financed vehicle, full coverage insurance is an absolute.

The only "surprise" item that has come up in my leases, is with my current Acura leased through AHF. I received a note invoice, as I do each month, but for one month, a property tax bill was rolled into the note. While property tax has been mentioned in all of my lease contracts over the years, this is the first time the tax has ever been imposed.

dio

Regarding insurance and leasing, up until recently Honda / Acura financial required 100/300 which was a premium and required for leases.

Now that it isn't a requirement, you can lease with a minimum amount of coverage which saved me about 60 a month. So that's another dynamic to think about when leasing from Honda financial.

n-spring

I learned everything I needed to know from leaseguide.com.

crownr0yal

+1. I specifically asked my salesman about this when I leased my TSX, and he had no idea. Big shock when I had to change my coverage. Good to know it's not required anymore.