smjc_99

What is a good lease deal that forum memebers were able to get on an RDX tech with 3,000 down/10K miles

I know non Tech is 2600 down and 399 plus tax but I guess a better deal may be possible for both tech and non tech

c_hunter

Look in the discounts thread, see pittpanther's post:

https://acurazine.com/forums/showthr...&page=12&pp=25

The current lease money factor is not great, but you can certainly haggle on the vehicle price to lower your payments.

pittpanther

Hi smjc_99... for a Tech the invoice is $33,960. You may be able to go even lower. Keep in mind that the true dealer cost is this "invoice" amount less Dealer Holdback, which for Honda/Acura is 3% of the MSRP (not including Destination), or $1,094.85. This amount is usually untouchable in terms of negotiating - but since the RDX sales are slow and dealers have quite a few on the lots, you can make some headway here.

The money factor is 0.00213 (=5.11% APR) on the current lease promotion through American Honda Finance, which is decent (but not exceptional). The residual on a 36 month lease at 12,000 miles a year is 57%. I am not sure what the residual is on a Tech with 10,000 miles.

When leasing, we generally like to minimize the out of pocket expense, wrapping sales tax, acquisiton fee ($595), etc. into the lease (the idea being we can do better with this cash on our own in terms of investing, etc.) In our case, we were able to negotiate down to $33,000.00 for our Tech. We wrapped our sales tax of $1,650.00 (5%) into the lease and put only our 1st month's payment down ($521 and change). Had we paid for the tax up front, our payment would have been reduced to around $471.

The question(s) I would have for you are: (1) What is the sales tax where you reside?, (2) How is this handled with regard to leasing in your state (i.e.: do you pay tax on the full purchase price, or just on the leased amount)?, (3) How much do you *want* to come up with at the time of the deal?

pittpanther

Also, here is a link to a lease calculator (for reference):

http://www.leaseguide.com/calc.htm

Also, take a look at how different taxes are determined based on the state in which you reside:

http://www.leaseguide.com/lease09.htm

smjc_99

Pit panther,

Thanks for the info

In Nj we only pay tax on the leased portion only ( 7% sales tax)

with 2,500 down I am trying to figure out how low I can I lease the RDX for?

2.5K down, 10K miles , RDX with TECH Package



Thanks

econman

In interesting thing about Texas is that if you decide to exercise your lease option to buy at the residual, you pay taxes again! The leassor technically pays the tax at lease however they are allowed to charge an "acquisition fee" which is essentially their way of recovering taxes paid at their initial purchase of the car. Now flash-forward say 2 years, the leasee loves his car, decides to buy, POW!, he has to pay sales tax (6.32%) again!

Evil. Truly evil.

pittpanther

smjc_99 - this is how to calculate the lease payment:

1. MSRP = $36,495.00
2. Destination Fee = $670.00
3. Negotiated Buying Price = $33,960.00 (Invoice)
4. Acquisition Fee = $595.00
5. Residual = 58% (Estimated)
6. Residual Value (#5 x #1) = $21,167.10
7. Downpayment (Sometimes Called Cap Cost Reduction) = $2,500.00
8. Lease Term (Months) = 36
9. Money Factor = 0.00213
10. Equivalent APR (#10 x 24) = 5.11%
11. Adjusted (Net) Cap Cost (#3 + #4 - #7) = $32,055.00

12. Depreciation Fee = ((#11 - #6) / #8) = $302.44
13. Finance Fee = ((#11 + #6) x #9) = $113.46
14. State Sales Tax ((#12 + #13) x 0.07) = $29.11

14. Monthly Payment (#12 + #13 + #14) = $444.91

A couple of things though - I estimated the residual (#5) to be 58%, but I am not sure of this. The residual for an RDX Tech for a 36 month term lease and 12,000 miles is 57%, so I estimated 58% (i.e.: the RDX would be worth a bit more at the end of the lease if you only put 10,000 miles on it per year).

The items in bold are usually the things you can negotiate in a lease. In this case, American Honda Finance has an advertised *special* that pretty much locks in the Residual (#5) and the Money Factor (#10), so what's left to negotiate is the sale price (#3). You can also shop around to 3rd party leasing companies to find better deals on the residual and money factor (I tend to stay with American Honda because they are pretty flexible in terms of early lease termination, etc.) I used the invoice for the RDX Tech in the calculation above. Again, keep in mind you can get the dealer to go below invoice because they still make an additional 3% of MSRP (#1) on the sale/lease of this vehicle from American Honda (Dealer Holdback), which would equate to $1,094.85 (this means true dealer invoice is $32,865.15). Generally, this amount is off limits in terms of negotiating. But with the MDX just releasing and initial slow sales on the RDX, dealers seem to have plenty of RDXs on the lot. Therefore, they have added incentive to negotiate (inventory costs them $). Let's say you are able to negotiate the sale price down to $33,000.00 - your monthly payment would drop to $414.19 per month. I also did not include any dealer processing fees, etc. If there are such fees (these should be kept to a minimum because they also represent dealer profit), they should be added to #11 above. Our dealership added a $99 processing fee (which is reasonable).

In addition, you will be expected to provide your 1st month's payment at the time of the lease.

Lastly, when it comes time to the end of your lease term, you can always sell the vehicle on your own (as opposed to just turning it in). If you take care of the vehicle, many times its value at the end of the lease will exceed the "payoff" amount with American Honda. For instance, let's say you are entering your last month on the RDX lease and your payoff amount on your lease is $20,000.00, but you are able to sell the vehicle for $22,000.00. It would certainly be in your best interest to sell the vehicle on your own and hold on to the positive equity ($2,000.00) instead of handing it over to the dealer. When selling the vehicle on your own, you do not have to stay within the mileage limits either (but keep in mind the more mileage you place on the vehicle, the less it will be worth on the open market). This tends to be less of an issue with Hondas/Acuras because they hold their value so well despite excess mileage. The only sticking point with selling a leased vehicle at the end of the term is the transfer of the title, which is held by the leasing company (in this case, American Honda Finance). In the past, we generally purchase the vehicle outright 2 months before the end of the term from American Honda. We then receive the title in the mail from them (generally takes a few weeks), and put the vehicle up for sale on cars.com. In fact, we will be doing this exact thing with our 2004 S2000 right when Springtime rolls around .

Good luck !

pittpanther

econman - here in Maryland, the taxes must be paid at the time of registration. So when you lease a new vehicle, you must pay 5% of the purchase price when you register the vehicle with the MVA. If you decide to buy out the lease at the end of term, you would not need to pay the taxes again; however, if you sell the leased vehicle to a private party, they would have to pay 5% sales tax again on the sale price.

The Texas law is outrageous if you wanted to buyout the lease and keep the vehicle yourself!

F.Rizzo

Wow, you are the first person I've seen that actually knows what they are doing with leasing. Nice.

Two points to consider:
Do not focus on payment. That's how they "bury" you in a lease. Everyone seems to just concentrate on the payment and not how it's calculated - therefore most people who lease end up paying more for a vehicle than those who purchased.

Remember - you are "renting" the car, you do not own. Consider the purchase of "gap" insurance because if the capr depreciates rapidly (and considering the discounts on the RDX, it probably will) if you total the car and the insurance pays you around wholesale bluebook there could be a significant "gap" between what you owe and that insurance payment. You would still be responsible for that "gap". Insurance can help cover it.

Great site on leasing: http://www.carbuyingtips.com/lease.htm
There is an Excel spreadsheet on that site that can help sort it out for you - if you have to bring a laptop to the dealer and plug the numbers in as you negotiate. As one that was in the car biz, it is very easy to hide stuff in a lease. You think you are getting a good deal, but we would usually backfill with "prep fees" and "doc fees" to make up some juice.

Finally - my suggestion is to not go after the dealer holdback. Go within a couple of hundred of "invoice" and be happy. This is a 95% better deal than most people get on a new car - so be happy. It's the law of diminishing returns - you could spend a couple hours chasing after a few hundred bucks and just upset everyone, or let the dealer make a few hundred and everyone is happy and you leave the dealer in under two hours. The dealers are not there to give away cars and the salesman gets nothing out of holdback - so by the time you are that low (at or below invoice) they are making a skinny on the deal - usually less than $200.
All this nitpicking about "below inovice" is getting funny, next thing you know - they will be going after the destination charge next...after all the cars in California had to travel farther than the cars in Ohio ?

pittpanther

Thanks F.Rizzo... good infomation.

With regard to going after Dealer Holdback - in general, it normally is futile - afterall, the dealers do need to make some $. But depending on your geographical location and the number of RDXs on their lots, as well as the number of dealerships in your area, I think it can be well worth the effort. Keep in mind, inventory costs the dealerships money as well.

My method was to compose a message (much like the lease calc above) with all of the details of the lease with a purchase price of $33,000.00, which I e-mailed to about 15 dealers in and around our area. 2 dealers contacted me that were willing to agree to the terms. One was in York, PA (about an hour away), the other in Ellicott City (about 30 minutes from my office). Since Ellicott City had the color combination I was looking for, that is where I wound up. I spoke to the Internet Sales Manager there (Norris Acura West) on the phone to review the details, and to ensure there would be no surpises upon our arrival. The RDX was ready to go when we arrived. We took about 30 minutes to sign the paperwork, and that was it . Our smoothest transaction to date.

With a purchase price of $33,000.00, we were $960 under "invoice", which over the life of the lease results in a savings of roughly $1,085.00 - which to me, was well worth the effort. But like F.Rizzo said, it is really up to you how much effort you are willing to expend.

If you check out the thread regarding RDX Discounts, you will see from Page 10 and on that there are a few deals below invoice that members were able to secure.

pittpanther

I also neglected to include titling and licensing fees in the example above. You will have to find out what these are in NJ. They will also need to be added to #11 in the example above.

F.Rizzo

Thanks for concedeing the point about the holdback. Too many are led to believe that it is their right to go after dealer holdback, and it is unrealistic in most cases.

More FYI: ( because it appears like you are actually listening ) Every dealer negotiates the holdback with the factory differently. Dont assume everyone gets 3%, large dealers get better deals than the small dealers, just like the flooring charges. Some large dealers only pay for the invantory twice a year, so they can hold on to a car for a long time with no sweat.
When I was working with american cars, we did not even know what the true "invoice" really was. Depending on the dealership, "invoice" was actually really known by the owner, his accountant and the manufacturer. I remember hearing a story about a ugly purple Dodge Omni that sat on the lot for 10 mos because it was so wierd nobody wanted it. Rumor was that the factory gave back $4k on that car (unverified) so even when we sold it for "less than sticker" and the dealership gave the salesman a $500 bonus for moving the looser they still did well on the car. I'll never know, because that stuff is not spoken about.

Also - worth pointing out that there was a factory lease special (i'm not sure what the status is after Jan 1) that added some cash to the deal so it is completely possible to roll and RDX on a lease under invoice depending on the factory support with little effort, but do not expect to get the same on a purchase. (I took the 4.9% financing this time instead).

Animagix

anyone factored in how much more insurance is going to be? I know when leasing any car the insurance quotes can be significantly more depending on where you're registered. In nyc it makes a big difference. I'm paying somewhere 800 per 6 months while financing the car. Got quoted 1500 per six months if I leased.

pittpanther

Interesting. Our insurance company (Allstate) does not ask whether the vehicle is purchased or leased.

creativeguy

At least in CA, the only requirements for a leased vehicle is that you need to carry 100/300 liability. Since I was already at that level, there was no change for me and my rates only increased about $500 per year going from a 11 yr old Integra to a new RDX.

smjc_99

Great and detailed response PIi Panther. You have been very very helpful

Thanks

pittpanther

Anytime - please keep us posted...

F.Rizzo

I think it's different per each vehicle finance co. our old Nissan Altima only needed minimum coverage, I think the Benz wants 100/300 & Gap.

.

econman

Yes. It is crazy. They look at it literally and argue that it is a "re-title" and therefore taxes are due. I think Texas is one of only two states that does this? Well, at least we don't have income tax.

What has happened, is this has harmed the lease market in Texas (especially short term leases like say 24 months), as one of the best arguments for leasing -- option to buy -- is severely diminished by the repeated tax.