NJTSXMan

I am very interested in a TSX. I have been for a while.. but I have recently been struggling to decide whether I should finance or lease. I have read the pros and cons of both and I love the fact that I could change new vehicles every 3-4 years or so. However, the 12k miles/year does worry me a little. I don't drive far for work (30 miles round trip) but with a car like that I would want to drive everywhere! But then again, if I really love the car, i may end up buying it at the end of the lease..Anyway, I really want the TSX with navigation. I got a quote on the lease deal today. Does this sound good? or can I do better?

TSX with NAV - Lease 12k miles/year - $405/month for 42 months - $1850 upfront.
TSX w/o NAV - Lease 12k miles/year - $369/month for 42 months - (forgot the amount of the up front cost but less than $1850 obviously).

The sales rep mentioned that the TSX would be about 16k at the end of the lease.

My finance option is HOPEFULLY a loan $27,000 for a term of no less than 72 months at 5.2%.

sauceman

If you believe you will want to buy the TSX at the end of the deal, it may be a sounder decision to finance and buy it right away. Hopefully it will save you some interest and taxes.

Then, you'll be able to drive it to your liking.

iamhomin

If you lease w/ Navi for 42 months, it comes to $18,860.
Without, you'll pay $18,860 - $2,592 - less amount up front
The to buy the car at the end of the lease, it'll cost you a total of $33~34k.

It's quite easy to know what your best option is, because the car alone doesn't exceed $30,000. Indeed, your monthly payments will be lower with a lease, but if you can handle a bigger payment and monthly payments, it's wiser for you to finance the car, because in the end you'd be able to sell the car or trade-in the car for around $10k

NJTSXMan

Interesting.. But what if I decide I want something else after the lease is over. Is it still not worth it to lease the vehicle?

sauceman

It is always better to buy than lease. Generally, a lease will let you get a car for more than you could afford if you were to buy it.

If you wish to someday get rid of payments, leasing is not the way to go.

NJTSXMan

I see... but what do you mean about the above quote? How is that so.. Forgive me i'm just new to this whole thing.

sauceman

Well, if you lease for 4 years, you will be paying installments for the whole duration of the contract. If you then trade it in, and go on another lease, then you will keep doing payments, and so on. You don't get to enjoy the car without the payments anytime when you proceed this way.

NJTSXMan

Points well taken.. I think I will try to finance the vehicle.. I want to do 72 month loan term because I want that cushion just in case.. but I will try to pay as though it were a 60 month loan term.. Is that a good idea?

sauceman

Personally I would do that, but I'm not holding your wallet, so it'sup to you. I gave you my worth.

Whiskers

Just curious, what dealer in NJ?

NJTSXMan

It was Park Avenue Acura.

Whiskers

Cool, just make sure you shop around before you commit...

iamhomin

Try Acura of Wayne as well.

Their more fond of negotiation than the Park Ave.

CLASSYCLS

I am also on the same boat, I currently have an 05 RSX-S that I bought less than a month ago but I want to get rid of it for a TSX or TL, so with NAvi is $405/month, hummmm little pricey, were you even able to bargin a little?

samir786

My personal advise...stay away from odd number of months on a lease...stick to 12 month intervals...that's where the dealerships get you. 12 mo, 24 mo, 36 mo, etc. 42 months and all that you can't really get a good idea if you are getting a good deal or not, and they convince you that you are...i think there is a thread on this too...

vietazntsx

Personally I think it is best to lease if you know you're not going to keep it and like to drive new cars all the time. Plus, Acura's lease programs has no penalty fee for early termination, therefore before you reach your miles bring the car back to the dealer, they will work something out with you, either put you in a new lease, etc. Whatever you do, don't go over your miles before talking to your dealer.

erik7

NJ,

Before you do anything, do some research. You seem very new to leases, and if you went into the dealer not negotiating the price of the car, the dealer could sucker you.

Whenever you are buying a car, negotiate the price of the vehicle first. The dealer will try to get you to commit to a payment method (finance or lease) so they can negotiate payment. Forget that. Tell them you are undecided (in this case, you are). If you have a trade, don't tell them until you have the car price negotiated.

Now, it's tough to know if your lease deal is any good without knowing what you negotiated for the price of the car. What is the residual value % and the money factor? The residual is set by the leasing company and is not negotiable. The only way to possibly change it is to find a different leasing company. The money factor is your interest rate and is negotiable. The dealer will say they can't but they can. Check out leasecompare.com for some quotes. What is the bank fee? Somewhat negotiable, depends how much it is. Some dealers try to make more money on this fee.

Now, just to give a comparo between lease vs. loan. I took some guesses to your figures. I said you negotiated the price of the car to $1500 over invoice. I'm just using w/ Navi numbers. To get close to that $402 price with $1850 down, I said your resid % is 60% with a money factor of .0034. That is a terrible money factor. And just so you know, lease compare for a 39 month lease is giving a resid of 53% which I thought was very low for a Honda product. Oh, I assumed the payment you listed included NJ sales tax.

After 42 months, with the lease, you would have put out $18,800. And you would have no car (or pay the $17,736 resid to buy it out, BAD DEAL!). The value of the lease is only $9557. So you are getting KILLED on interest. If you had the 72 month loan (and just paid that amount, nothing over, just to make it easy), you would have paid out $21,570 with $13,120 still to owe. Here's the deal. Will your 3.5 year old TSX still be worth at least $13,120 so you are not upside down on your loan? Are you ok with selling it? Some people hate trying to sell their used car. Do you take real good care of your cars so their values stay at their highest possible level?

One last thing, using your 5.2% for 72 months and capitaloneautofinance.com rate of 4.69% for 60 month, you would be losing $1140 of interest by going with the 72 month loan if you just paid the payment. I know you said you would pay it like a 60 month, but if you didn't, that's what you'd be losing.

I hope this all helps. Sorry for being long winded, I just don't want to see you get ripped off, or have buyer's remorse thinking you should have gotten a better deal.

If you have more questions, PM me, and I'll be glad to help where I can.

ERIK

erik7

Another thing, try NOT to put any money down on a lease. If you get into an accident and the car is totaled, you would just lose that money. Bad deal!

cammyfive

This is a great site I've been using to estimate leases. www.leasecompare.com They are pretty spot on. Just use the express option and fill in the blanks. I estimated an '05 TSX 6spd non-navi at $1500.00 over invoice to be in the high $300's with 0 down. Having a little experience in the car-finance business I recognized the best lease programs as U.S. Bank leases. You can tell that by the mileage overage fees (18 cents per mile). Keep in mind that US Bank is a AAA credit only lease company. Hope this helps. I think leasing is a great option just from hearing most guys on various car boards talk about trading every couple of years.......try that on a 72 month purchase and you'll have to sell your soul.

biker

The problem is that with such mentality you are setting yourself up to a life of lease payments. That's probably not such a good financial move, especially when you're young.

cammyfive

I agree with you 100%. The best option is to put down as much cash as you can, finance for no longer than 36-48 months and keep the car for ten years. That way you pay very little interest and get all of your worth out of the car not paying for anything other than gas, insurance, and maintenance for over half its life. But, thats not the way the world works. Just look at all the shiny new cars out there in suburbia. As a car nut, I'm constantly wanting the newest and greatest thing. I admit it, its totally illogical, but its just the way I (and many others) am. My point is that if you realize that you will trade every few years, it is STUPID to just outright dismiss leasing and to finance traditionally for the longest term possible (usually 72 months) to get a lower payment.