Well, since good old NY is no longer leasing, I was interested in maybe using Balloon Financing on a TSX Auto w/ NAV. Does anyone have any information on Acura's Balloon financing? For anyone that is doing it, what is your monthly payment? What did you put down? What is the buyout at the end? I don't know whether to go this route or use a 7 year loan (I got approved for 3.74% for up to 84 months), and hope the car holds its value enough to get rid of it in 3-5 years. Any information and deals you guys have recieved would be appreciated!

Thanks in advance!
Dennis

 

Hmm, I guess no one has used Balloon Financing? Seems strange since it is the only alternative to leasing, and leasing is so popular!!!

 

Its still a lease. Its just a closed end lease (ie no option to buy at the end by refinancing the residual). I was once told why NY doesnt lease. Clarify, was it becuz banks were getting sued by victims of serious car accidents becuase the cars are registered to the banks???

 

I was just qualified for a balloon last week. 42 months.
And, yes, the name of the bank was on the title and they were held responsible. The balloon is actually a purchase. You own the car. At the last payment (42nd month) you have an option to buy the car for the amount left. You can get out of the balloon by selling the car and paying off the payments.
If you dont pay off the last payment, you dont pay the 42nd month. Lets say its $350 a month for 41 months. You would pay $14,350 and have $11,650 for the 42nd month. Assuming the car is $26k. Lets say you find a private buyer that would give you $12k. You can sell it privately, pay the loan and keep the $350. It leaves you with a few options.

 

Could you tell me the payment that you were qualified for? Did they break that down for you? Payment amount? Buyout amount? Anymore information would be helpful. I am just trying to decide if the balloon would be worth it since I would be paying $315 for an auto w/NAV for 7 years, then I can just sell it before the term is up and in essence, get the same deal as the balloon, just with a little more hassle (not being able to turn the car into the dealer and having to find a private buyer).

 

Well you're paying $25 a month less than I am. If we both turn our cars in after the 41st payment, you would have to pay $1025 more than I (assuming I have the nav to make it even). My payoff amount is (I dont have the nav): $340*41=$13,940-$26,000=$12,060.
You have to try to sell your car in 3.5 years for ~$15k to break even. Nav's also have less of a resale value b\c they are more money and 3 years down the road it will be harder to sell.

 

With these balloon payments, are you puttin down any downpayment? I was offered balloon payments from American Honda, but I chose to lease it through a bank. You can ask your dealership for a lease. They have a bank that can lease the car to you. It will not be American Honda, but some other bank. This is what I did. The dealerships usually don't talk about leasing through this other bank because its less profitable for them.

 

Just tax down. Do you live in NY? I really dont think you can lease it period. Im pretty sure there is a law against it.

 

Dunno, I never heard of NY having anything against leasing.

Every day, all the NYC newspapers have ads from car dealers, and prices are quoted for leasing.

 

There seems to be a lot of confusion around this subject in NY. There are ways around leasing in NY state. I own a couple of businesses and it makes sense to lease for me so that's what I am going to do. For tax reasons its better(even for a business) to purchase the car and plan to write the whole thing off in one year- but I will be bored with a car in 3 years so I like getting something new even though its not "the best" tax wise. If you purchase you can depreciate the car over set number of years, until it is completely written off(on a TSX this would take about 10 years, there are maximum's if you do it this way- i.e. the amount you deprceiate per year), and then have an assett- that really doesn't make any sense unless you plan on putting 200k miles on it in 5 years. A vehicle is a poor assett for any business unless they are HUGE, its a liabilty at best- IMO, though that still qualifies as a business expense In NY you can not lease due to law suits against banks/vehicle manufacturer's(who ever owns the vehicle). With the ballon payment method you can walk in and put next to nothing down and have low monthly payments for 36, 48 months what ever you want, with an allocated number of miles. At the end(last month) your offered the option to purchase the car for a predetermined amount or pay a disposition fee(usually around $350) to turn the car back in. The ballon payment method has all the advantages and disadvantages of leasing in NY now.

Here is a little free advice that may save you a lot of money, if you lease or opt for a ballon payment put as little down as possible. Yes your money factor(which equates to your interest rate) will be higher but not by much in particular if you have flawless credit(this difference during your ownership will amount to a few hundred dollars tops). Now here is the big reason WHY YOU NEVER PUT MONEY DOWN ON A LEASE lets say you lease car X and you put $8k down plus tax, title, etc..... You pull out of the dealership and get t-boned by a big rig and the car gets totaled. Well your insurance will not cover your down payment, the gap insurance will pay an agreed amount to who ever holds the title(less then you owe, but that's besides the point). You will be out all of your money and have no car, and there is NOTHING you can do about it. You could get different insurance to cover it, however it would cost more then the higher interest rate you would pay by putting nothing down. Its your money you worked for it, make sure you spend it wisely- rant over

 

It's not that there is a law against it, it's just that no lease company/bank wants to take on the risk associated with leasing in NY. NY has a stupid clause in their Vicarious Liability law that makes it possible for lawyers to sue the leasing company if a driver that they leased the car to hits you in an acident. Lawyers make money off of this law..an guess who make up the majority membership in the lawmaking body in NY who have the ability to repeal this clause?....yep...you guessed it...lawyers.

 

Correct, but if you go to a dealer and ask if it is truely a lease they will say 'no it isnt'. Balloon is just the same way they can keep low monthly payments but give you ownership of the car.
Tireguy, I didnt put anything down but the tax. If I finance the tax in the monthly payments (and pay $400 a month), and total the car would I still have to pay the tax? Yes?

 

Well, y'all helped me learn something. I guess I woulda known if I had ever wanted to lease, but still, I can't believe I never heard of this.

 

I am not sure, but it would only make sense that the insurance company would pay the tax if there were in fact any tax left over that were due. I have been in a few accidents, and I got burned on a lease by putting money down and the car got totaled, and I had nothing. You may have to pay a small deductable(this will vary depending on your policy), however I don't think you would be responsible for the tax. Your best bet would be to call your agent and find out for sure. In any case if you just put tax as your down payment its not a like your going to take a huge hit financially.

 

I live in NY and my car is LEASED, and not balloon payments. They gave me the option of balloon payments, but I offered to lease from an outside bank that the Acura dealership had a lease program with. I leased my car from Acura of Valley Stream back in September. Call them up.