23109VC

here is a question for you financial gurus here on the forum.

based on my shopping/research...

I can lease a new 09 TL w/tech for about $522/month. 12k / 36 months. that is zero down, sign and drive. just first payments due up front.

I have found a n ice CPO low mileage 2006 RL (24k miles on the odometer) for about $26k asking. I could probalby get it down to $25k or $25.5 + TTL.

I drive about 12k/year.

it's easy to just crunch the "cost" of the lease over 36 months, the purchase over the 72 months I'd fiance the car... and then just double the cost of the lease, and compare one to the other...but on a purchase you have all these other factors. possible repairs you may make over the life of the loan, plus at the end of the loan, the purchased car has a net value..you can sell it, pocket ht emoney, or keep dirving it for "free" and not have payments...

part of me likes the idea of leasing, as I'd have anice car for three years and have no worries aobut fixing stuff, or parts breaking. if i purchase a CPO car, I get about 2.5-3 more years of powertrain coverage, but i'd be making car payments for 72 months. anything that breaks in the last three years will cost me the price of repairs on top of my car payment.

but in the end of the purchase, I own the RL and could drive another few years for free...*if* I would actually keeep the car tha tlong. the longest I've owned a car for was 7 years. i had it paid for for about two years...but it got too old, high miles rattled, and I was sick of it and wanted something new...

waht makes more sense? i'm one of those indecisive people when it comes to these things and one minute I want to do do/buy A , and the next I want to do/buy B.... arrrgghghhg

rmjse

I am no financial guru...

But I want to know how you can lease a '09 with $0 down? Usually the dealers ask for $3000 or maybe even more of a down payment on a new RL lease.

I am not a big fan of the '09-'10 RL styling compared to the '05-'08, but that is not a bad a deal if you get it at $0 down.

SpicyMikey

You can always get a car for zero down. No rule says you have to put down cash unless your credit is dinged.

I'd take the new 09 on the lease if that number is correct. However, check your numbers. What's the MF and residual? I don't think you'r not going to get it for $522 a month. Have you factored in all the startup fees and taxes? I'd think you should be expecting something north of $600 but that's shooting from the hip without even looking at the current offerings, etc. You may be right but just double check your $522 number before making a final decision.

SpicyMikey

Hey 23109VC, just ran some quick numbers using posted TL MF and residuals. It's an estimate but probably ball park. An RL Tech at invoice is going to run you north of $700 a month with no cap reduction. That's still assuming you are putting down cash for the starts (e.g. doc fees, license fees, bank fees, etc.). Figure that to be around $1000. If you roll that into the lease you're probably in the mid 7's.

Someone at that dealership is bullshiting you my friend. Confirm the numbers and confirm the package. Is it a Tech package? Is it a demo car? etc.

Post the details here if you want some further advice from us. There are guys on here that know a lot about financing and current deals. They can help

Good luck

SpicyMikey

Your right. I was looking at a lease for an RL. His numbers make more sense now. Are sure about that residual on a 12k 36m lease? That sounds awful high.

stevesrl

Just buy the 06. You can always sell it at anytime. I've never really understood the lease thing because you are not in control and have to abide by the rules (excess mileage).

23109VC

i spoke to a sales guy... and I ran the numbers online.

you can get the 09 TL w/tech for a cap price of $33700. There is a $2000 dealer cash incentive on the car.

I believe the residual is 53% on 12k.
I'd have to look up MSRP again, but they calculate the residual off that figure.
the MF is .00184 or somethign like that... call it .0020 if you want to play it safe/conservative.

using those numbers, with $3000 down, I came up with a monthly price, TAX INCLUDED of about $440-450.
'
i had a saleguy tell me he di a deal with almost those exact numbers.

it is a good deal. the mileage limits woudl be fine with me. i'm in that ballpark usage anyway. i had one of these as a loaner - sweet car.

SpicyMikey

First off, sorry for misinterpreting your original post. Thought you were comparing a lease versus buy of an RL.

Those numbers you just quoted make sense if you put $3000 down on a TL FWD Tech. However, I would advise against cap cost reductions unless it's the only way to get the .0020 MF. Money down on a lease is a gamble if the car gets totaled. Small risk but a risk none the less. If they want the money in order to get the MF then offer a security deposit (or multiple security deposits). At least you get that money back at the end of the lease. Also, the residual is low but that may be correct since it's late in the model year and the 2010 Tl's will be out soon.

As far as the purchase of an 06 RL; I'd strongely recommend against that. It's almost 4 years old and you're talking about taking out a 72 month loan. My rule of thumb; If you can't afford to buy a new car in 48 or 60 months then you can't afford to buy it. Consider stepping down to a TSX or a brand new well equiped Honda Accord. Both will be in that 06RL price range but it will be BRAND NEW and be under warranty while you pay off the loan. Nothing worse than paying off a loan while you pay for expensive repairs at the same time.

My conclusions; If you can swing a $500+ monthly payment and really want a sweet ride, take the TL on a 3 year lease with no money down. Better yet, wait a bit and get a 2010 TL with a better residual. If you want to be more pragmatic, buy a less expensive car that you can pay off during the warranty period. Remember, the RL's have a LOT of technology in them. That stuff is expensive to fix when it goes bad. The last thing I'd be considering is an 06 RL with a 72 month loan

Good luck

23109VC

thanks for the input. I appreciate it all..even if sometimes it's not what I want to hear.

Maybe I will look at less expensive cars, or even a TSX lease. another option is to BUY a used CPO 08 TL.

I can get an 08 CPO 08 TL for about 27-28k. same price as the RL, except it's only one MY old, and hte CPO coverage will be good for two additional years. if I did a 72 month loan on that car, I'd be covered under the CPO warranty for most of the repayment term, and I'd be covered under the extended powertrain warranty the entire period of the loan.

the cost is the same, so the monthly is almost hte same.

buying a CPO TL with money down, would be cheaper than leasing either a TSX or new TL - assuming a sign/drive lease. you *can* get the lease to be cheaper, but only if you put cash down and I know the whole reason behind not putting money down on a lease. dealers advertise deals with cap cost reductions, b/c it creates monthly payments that people can stomach... when you look at the "advertised" ;lease, then get a quote for a sign an drive lease, you get a more realistic look at the actual cost/monthly payments.

on a purchase, it makes sense to put money down, b/c even though teh car will depreciate and your "down payment" wioll be disappearing, you are going to eventually own the car and it will be yours.

i believe I will put about 10-12k max per year on whatever I buy. if i found an 08 CPO TL, I could get one with 10k miles on it, and at the end o fmy 72 month loan, the car wioudl still have only about 75 - 80k m iles..that means i would still be able to drive it for severalmore yeears as at that mileage, it still has a lot of life left..and those remaining years would be payment free.

i'll have to admit, I have not lookd at the new accord yet. maybe i'll go check one out today and compare.

thanks.

SpicyMikey

No problem. Glad to offer my opinion. Of course, it's just an opinion. Take it for what it's worth.

Regarding opinion; here's some more..... CPO 08 TL sounds nice but, again, 72 months sounds ugly. Unless you can get some killer interest rate (1%), then I'd avoid it. The car will probably end up costing you way more than it's worth. Plus, unlike the 06 RL, the 08 TL is still in it's prime depreciation period. You will probably be underwater on the loan for the first 2-3 years. If something went wrong with the car and you wanted to dump it you'd be in trouble. Realistically, you'd have to assume you'll be committed to the car for 3 years just as if it was a lease, but without the leasing advantages. 72 month loans rarely make much financial sense. Again, only my opinion.

rmjse

Whoops....

I just noticed he was talking about an '09 TL not an RL...

Silly me


I would go with the RL then. Overall it's just a better car (in my opinion )

23109VC

I could go with a 60 month loan or a 72 month loan.

this 2006 was titled in June of 2006, so it's been on the road for about 3 years. it has 29k miles on it. roughly 10k/year which is below aveerage usage...

leasing a new TLwould get me into a new car, but after 36 months, i'm right back into having to buy or lease a car.

buying a car like this used RL, will cost me less in the long run. if you keep the car for 150k miles.... you come out way way ahead in the end as you pay it off in 5 years, and then drive it another 5 with no payments... but my quesiton is whether I would reallly ever keep a car that long.

i tend to get bored iwht them in 5 years or so and want something new.

in this economy though, i think i might be more content to just get a ncie car and stick with it for a while.

SpicyMikey

Yes, if you keep the RL for 10 years then I totaly agree that would be the way to go in terms of total-cost-of-ownership. Didn't know that was your thought when comparing it to a 3 year lease. When people compare loans versus leases they are usually comparing the same time frames.

If lowest TCO over the next 10 years is your goal then obviously do the RL deal. There's nothing to even consider. Even if you blew the engine in year 6 it still would end up being cheaper then rolling into a new lease every 3 years over that same timeframe.

23109VC

i can't say i'd for sure kep it ten years...but I would likely keep it for 6-8 for sure. the car i'm looking at only has 29k on it, and I will likely put about 7-10/max miles per year on it. so after a 5 year loan, the car would only have 80k miles on it..still lots of life left in it... i could easily drive it another 5 years..at that point it would all come down to how much I still liked the car, what else is out there, how bad I want somethig new, my financial picture at that piont..

with this economy...I'd rather have a car that I have the optio to KEEP and rive and not be FORCED into another lease..i always can SELL the car if I am not upsdie down..which I won't be once I pay it off...

thanks for all the info..i'll liely try to work up a deal on this car soon!

SpicyMikey

It's hard to offer advice if we're just kicking around hypothetical situations. If you plan to keep the car for 10 years then buy it. I've owned cars for 10 years. Obviously very cost effective. I've also leased cars for 3 years. All depends on needs and wants at the time. I bought my RL with a 48 month loan and plan to keep it for 5+ years. At the same time, I'm leasing an MDX for 3 years cause I like to turn the "family" car over quickly. You sound like a smart guy who understands the issues. Probably nothing more for anyone to add. Good luck. Let us know what you decided.

23109VC

Mikey-

you soundlike me. we usually buy my cars...keep them longer, and lease my wife's car and turn it overmore often, as that way you always have a "new" and ultra reliable family car... that combo can make a lot of sense..

i'll keep you all posted.