I'm thinking about trading my TSX to 05 TL, and what I got from dealer is that they will pay off whatever is left on my TSX (It was financed for 72 mon. I put down $7000 and monthly payment is currently $450 9.99% Apr)
Dealer gave me the specific price and term today.
It will be lease $530 monthly payment for 48 months, and it will be around $17000 left when I return or buy or refinance new TL. I was thinking about leasing fro 4 years and then refinance it. What do you guys think about this deal? Do it? or don't even think about it and just drive TSX. Let me know please!!~
I need quick advice

 

In my opinion don't do it. Anytime you trade your car within less than 3 years, you lose out on any equity you initially put into the car due to the heavy depreciation in the first couple of years. From your numbers, it doesn't seem like you are getting any cap cost reduction from your potential TL lease. What is the selling price of the TL? Are they calculating the lease off a number between invoice and MSRP? Even though you don't have negative equity going into the TL, you are essentially throwing away the intial $7K you put into the TSX. If I was you, I would keep your TSX for at least 3 - 4 years and then possibly trade up.

 

What was your original price for the TSX and when did you buy it?

I would probably never lease, unless I could write off the payments. I'm savy with finance and lease contracts still confuse me. There's too many ways for a dealer to screw you.

What kind of TSX is it? I'm the market for a one...

 

I'd be carefull on this one. When a dealer says "Sure! We can pay off your car no problem", it means "Sure! We can add the difference to your current purchase!"

$530 for 48 months??? Dood, just keep your TSX.

 

Sell the TSX outright for payoff. Then you'll break even. You should only lose money to advertise via newspaper, local websites, and autotrader. None of those cost a lot. Good luck!

 

Yea, but if he breaks even, he just pissed 7K out the door...Not worth it IMO...

 

True true...forgot about that! That's why I never put a down payment on the cars I buy, cause I never keep em long enough to benefit from that!

 

Me 2

 

Don't do it. You're losing equity and plus the next deal isn't making you an owner.

 

cmf and joerockt--

So buy putting no or very low downpayment you would save yourself some $$$ if you know 100% for sure you were only going to keep the car for 3-4 years or even less??

And like Creaminz said the dealers says "we will pay the difference"...is this normal and expected...or are they out to get you?

Also Creaminz, I think I would keep the TSX as well....

 

Thank you all for the advices. What sauceman said was most effective on my decision. You are right if I trade in to new TL, that won't make me an owner for that car. And I think it would suck after four years later I still owe them $17000. I should just forget about it. Reason why I thought about trading was so many little problems with TSX, and I already ran 27,000 miles in one year ( I know it's nothing compare to sauceman). I'm sick of going into dealership for every problems. Seats, Windows, Dashboard, Rear speaker, Engine idle, sunroof rattle, headlight condensation, door squeak, center armrest, bad break. jeez!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!! I love Honda....but this is too painful. How about...trading to 05 TSX?? what can I do~~~~~~~

 

Glad I could help.

 

Sure, me personally I dont drive very far to work, so I wont have very many miles in 3-4 years (Im guessing 30K-40K) so Im going to be able to sell it for a good price.

Dealers that tell you they will "pay the difference" will usually just tack on that difference you owe on to the new loan or lease. Not really paying the difference now is it?

 

Oh ...no they are not really paying the difference....shady! So I guess in that case, I shouldn't think trade-in unless I fully own the car, correct? So would people agree that a good rule of thumb is to only pay a big down payment if you are going keep the car for a long time (ie. 4.5+ years)??

 

Yes and no, I think you put a big down payment if you fully intend to pay it off quickly. 24 or 36 months.

 

Also, the reality is that none of us own our cars unless they're paid off. The bank really owns it, so that's difference between leasing and "buying". The car isn't really yours until it's paid off, so the aegument about not really "owning" the car doesn't wash. The great thing about a closed end lease is that after four years regardless of what it's worth you can walk away. Can't do that with a purchase; you'd have to pay the difference. I say if you can afford the hike in the payment, do the deal.

 

Wow! 9.99% APR. That's insane!

 

I think you're talking about the old style "conditional sales agreement" which I don't think are used anymore. With those, title to the vehicle didn't transfer to the purchaser until the loan was paid off. Maybe some banks in the US still use those. Typically what happens with a car loan is that the purchaser has title (ownership) of the vehicle right away and the bank has a lien registered against that asset. The bank does not own the vehicle.

Not sure what you mean above by "have to pay the difference" on a purchase. At the end of four years, the car would typically be paid off already.

 

Well, I have the title and lien situation, but to prove who owns it, miss a few payments. The point was that there's no advantage to purchasing vs. leasing until the car is paid off, then there's some equity.
As for paying the difference, most people don't finance for 3 years, so to dispose of the car via trade or otherwise, you'd have to pay the difference of what it's worth and the loan balance. With a lease you just walk away. That's the downside to purchasing, most of the time people are upside down in the loan when they're done with a car, and they have to carry the balance over to a new car purchase.

 

Oh I see, so becuase you had put a large downpayement and since you will have owned the car in 24 or 36 months, that would mean you can trade-in sell the car (if that was your intent) with a greater value vs. if you intentned to sell/trade-in but kept it for 4+ years..

Thanks a lot

 

Not really Seems like a middle of the line APR for a middle of the line credit score.

 

Apr rate didn't really matter, because I was going to pay it off after one or two years.
My friend bought a C55 AMG today from Cutter Motors in Santa Barbara...makes want to trade my car more...that car is sweeeeeeeeeeeeeeeet. But I think that's too much for 21 years old though, even his father is Dentist...

 

Buying a car based on peer pressure is always a smart thing to do