808-TSX

When you put a down payment when you lease where does it go do thet give it back to you after lease is up? Or if you want to purchase the car after the lease is that downpayment used to buy it?? Please help im so confused about leasing.

Dan Martin

The only thing the down payment does is lower your monthly payments. They don't give it back to you.

LannyM

Dealers hope you're confused about leasing; that way they can tell you they're giving you a great price on the car but turn around and up the payments in any number of ways and make the deal very profitable for themselves.

DO NOT ENTER INTO A LEASE UNLESS YOU LEARN HOW TO CALCULATE YOUR PAYMENTS!

Sorry, didn't mean to yell........

Leasing can be a viable way to finance a vehicle, but you need to understand how to calculate your payments. This is a little rough, but works well enough when negotiating a lease with a dealer.

Come to an agreement on price; let's say $500 over invoice.

Next, determine what the money factor and residual value are. The dealer will give you this info, but double check it with some other dealers. These numbers should come from American Honda Finance Co. (Also, I would generally advise against outside leasing companies, but that's another thread.) The residual value is non negotiable and should be the same at every dealer. The money factor, a fancy term for interest rate, will be dependent on your credit score, but dealers will try to raise it up and make a few extra bucks-again, call around. These numbers generally change at the end of the month.

The MF will be stated in some very low decimal, such as .00375. That sounds low, doesn't it? It translates to 9.00%!! Simply multiply the MF by 2400 to see what rate they're giving you. A good rate might be, for example, 5.00%, which is stated as .00209.

Once you have your selling price, residual value, and MF, the calculation works as follows. SP + RV X MF = monthly interest charge.
SP - RV / term = monthly rental charge

Then, interest + rental = monthly payment

If your state charges sales tax, you'd add it to your payment.

Next, there's the amount of money you need to bring in. Every state will be somewhat different, but there are few fees that you might be faced with; check with other local people to see if they're legit. Some examples are title and reg. You'll also have to bring your first month's payment, and a lease acquisition fee. You could always roll some or all of these into the payments; you'd simply add them to the agreed upon selling price and recalculate. If your credit isn't great, you may have to bring in a security deposit, which is refundable at the end of the lease. It's usually the same as 1 monthly payment rounded up to the next $50.00

Then there what's known as cap cost reduction. This is just money you put down, which is then subtracted from your total selling price, and it reduces your monthly payment. It is a bad idea to put any money into a lease, because if you had the car stolen or totaled, that money would be gone. You are protected in a lease by something called gap insurance, which would pay off any difference that your insurance company didn't pay in the event of a total loss. So keep your money in the bank and let the insurance company take the risk. The whole point of leasing is to keep your money for more lucrative investments then cars.

So, when somebody says "down payment", they could mean the total amount due at signing, or they could be referring to cap cost reduction. Now that you know how a lease works, you can ask exactly what they mean.

slo007

You need help. Do a lot of research before leasing a car. Unless you plan to replace it within a few years, financing might be a better option.

gt0279a

do a search for leasing on edmunds.com they have alot of great information and tell you the formula to calculate the lease payment.

You just need the residual and money factor from the dealer.

I have a nice xls spreadsheet the calculates it all for you, I just don't know where to host it, but I can email it to you.

gfxdave99

http://www.leasecompare.com/

check this site out...

novatsx

Do you have a business you can write the lease off on? If you can't afford the payments I would not consider a lease as a option.

I have leased before and never will again. If you do lease do it for a very short term like 2 years at the most, by that time you wil be sick of the car anyway, and if you do a long term lease then you have to buy it at the end or give it away and you get zippo.

avenutolo

Don't know if this helps but ... I sent out an email to EVERY Acura dealer in my state (except the one u wanna lease from). I live in Jersey, so there's a bunch. I told them what I wanted my payments to be. Some wanted to dance. Others didn't.

All you need is that ONE quote, that one good quote to take into the dealer you really wanna lease from -- the nearest one -- and tell them you would like them to match and you have no qualms with driving out of your way to get a better deal. Needless to say, it worked.

If a dealer sees you've done research, have folders with you, he'll be less apt to screw you. In my case, I also printed out every NATIONAL incentive from other car makers from the web sites (even though I didn't want them) to let them know that yes, THERE ARE other good deals out there and even though the TSX is a great machine, I just may have to dance with someone else if you're not gonna make it worth my while and meet me half way. I had Infiniti dealers giving me insane deals on leftover G 35s. So insane, in fact, that I almost thought twice about it. Just this weekend, I ordered my TSX 05 with nav -- $365 per month.

I hope this helps.

Anthony

CGTSX2004

iTrader: (1)

The only thing you get back at the end of a lease is the security deposit that you put down. Of course, this money often ends up going towards repair of damages if you've messed up the car pretty good. A lot of people who want to continue to lease under the same brand will roll the security deposit over into the next lease, which is allowed.

avenutolo

If you have your lease through HONDA tehy have what is called a Lease Loyalty program where they don't require a security deposit. THIS IS ALL THE STUFF U GOTTA KNOW GOING IN.