Hi,

I'm really excited that my family has narrowed down our next suv to the RDX. We test drove and we loved it. However, regarding leasing, do you think its better to lease the remaining 2020 RDXs or should we get the 2021 RDX. My main concern are that with the 2020 maybe not all the TSBs have been done or they may be some lingering issues. Whereas the 2021 may have all the issues described on the forum resolved.

Also, for leasing, would it be cheaper to get a 2020? Lastly, apologies for the questions, before signing a lease, are there any things I should avoid getting or things to look out for. We're leasing for the first time, so I don't want to have any regrets.

Thanks again!

 

5 Ways to Make Money on a Car Lease

At the end of a car lease, people often plan to turn the car in as if it were a rental. But did you know you can make extra money at the end of your lease? Written into your car lease agreement is a dollar amount called the residual value: this is how much the finance company is projecting your car will be worth at the end of your lease. However, if the actual value of your car is worth more than the residual value in your contract, then you have lease equity. That's the equivalent of money you can put right in your pocket. Here’s how you can maximize your chances of getting that extra cash:

Pick a model that will maintain its value

While all cars lose value each year, a new car’s value drops especially fast, decreasing by almost 20 percent the first year you own it. Finance companies take this decrease in value into consideration when setting the vehicle's residual value. You can use this pre-set value to your advantage by picking a model that will likely have a healthy used-car value at the end of your lease. "For consumers nearing the end of their car lease, higher-than-normal used-car values often can mean that they have a car that is worth more than the residual value," writes Tara Baukus Mello on Bankrate.com. "That can result in a cash windfall for savvy consumers." For example, if you leased a 2013 Honda Accord, your trade-in value is around $13,000. If the residual value on your lease agreement is $11,000, you would get back $2,000 at the end of your lease. What Your Car Lease Really Costs: Five Things to Know:



What Your Car Lease Really Costs: Five Things to Know

According to IHS Automotive, a quarter of all new-car buyers lease their vehicles, and the number goes up for luxury shoppers. For example, more than half of all retail buyers chasing a new BMW, Mercedes-Benz, or Lexus drive off in a leased vehicle. And while financing is a relatively straightforward process, leasing is not. Here’s why:

Advertising Versus Actual Inventory

Manufacturers advertise national lease specials all the time. A $399-per-month rate (the average of all car leases) draws 3-series buyers in like the tide. What about that Civic for only $99 per month and $2999 down? It’s all possible, at least in theory. That magic number in the TV ads is derived from an exact car that the nearest dealers may not stock. Even dealers—who you'd think would only advertise their own inventory—don't always guarantee the lease prices they promote. If you go looking for the deal in the ad, you’ll have to confirm that such a car exists. Likely, you'll be directed to a similarly priced model on the lot with another option or three, which will inflate the monthly payment.

Willing to wait for a car at the advertised price? Good luck convincing a dealer to special order a leased car. Many lease specials require taking delivery from dealer stock, and if they don’t, by the time your special order arrives, the deal may have expired. Some manufacturer deals also require an unpublished “dealer contribution”—a discount that lowers the MSRP—that not all dealers have to honor. Surprise! Out comes a higher lease payment.

Selling Price and Residual Value

Besides the selling price, the residual value is the other element that sets the total amount leased. All manufacturers set fixed residual values for every model trim level they lease—it’s the percentage of MSRP they estimate a car will be worth, at the agreed mileage and condition, when the lease expires. As you'd expect, a higher residual value lowers the monthly cost. But there's a lesser-known variable that's nearly as important.

Beware and Understand the Money Factor

Despite what it looks like, leasing a car does not work like renting an apartment. You’re not just paying for a car’s depreciation over two or three years, you’re also paying the manufacturer’s bank for the privilege of driving a bank-owned car. Baked deep into every car lease is an interest rate called the money factor, but unlike the annual percentage rate laid out in a finance contract, dealers write out the money factor in five decimals. Don’t brush it off: This tiny number has a high potential to screw you over.

Consider this theoretical scenario of leasing a new Jaguar F-type. You price out a base V-6 coupe listed at $73,600, with a 66-percent residual. You put down $5000 and receive $2000 worth of incentives, which takes $7000 off the top (together known as the capitalized cost reduction). The dealer comes back and says it’ll cost $612 per month before taxes. For fun, you look at an $86,300 F-type S that comes with a 61-percent residual and another $2000 worth of incentives. The total is $647 per month. It makes sense that the more expensive car carries a higher monthly payment. But given all these differences, why isn't the base car even cheaper? What gives?

The answer is the money factor. The base Jag had a .00238 money factor, while the S was at .00113. Convert these numbers to equivalent APRs (multiply by 2400) and it all makes sense. One lease wanted to charge you 5.7 percent, while the other was only charging 2.7 percent. Automakers clearing inventories on certain models can set money factors this way to sweeten lease offers, and while the differences aren't always this drastic, identifying what these numbers represent in real cash lets you smell a truly good deal from a mediocre one.

Dealers Can Pocket the Difference

Here's how you calculate the money factor's cost: Add the residual value (your set purchase price at lease-end) and the net capitalized cost (the net price of the car after incentives and any down payment) and multiply that sum by the money factor. For the above example, the S ($140 per month in interest) carries a significantly lower interest cost than the base car ($261).

Of course, as with any interest rate, only customers with the best credit scores qualify for the lowest money factors, except there’s another catch. Just as they can with financing, a dealer can legally write you a higher money factor and refuse to disclose the exact rate calculated by the automaker’s bank. On manufacturer lease specials, dealers typically aren't allowed to do this, but in most cases, dealers can mark up the money factor and pocket this extra cash without your explicit knowledge. That’s why if you finance, you should always get a loan quote from an outside bank, at least so the dealer can try to match or better your own deal. But you can’t bargain like that over a lease since the dealer holds the only strings.

Fees, Fees, and More Fees

You can easily avoid charges for excess mileage, damage, and in some cases, for modifying the car beyond factory spec or for not servicing the car at a franchised dealer, by following the contract. That’s pretty easy. But you can’t avoid the acquisition fee (which supposedly covers bank-related charges) and a disposition fee (to terminate the lease) that can run more than $1000. If your credit’s not great, you’ll pay a security deposit. And while you won’t pay a destination charge, you’ll still have to fork a couple hundred for a conveyance fee (which, we’d argue, is preferable to wasting five hours of your life at the DMV). Dealers also tack on regional advertising fees that can run several hundred dollars per car (essentially, you’re paying them for viewing their ads). While all the other fees are called out separately, the ad fee is stirred into a car’s monthly lease payment.

So is the sales tax—and this can vary more widely than you’d think. Until recently, Illinois required car dealers to collect tax based on the full purchase price, not the depreciated cost a lessee actually pays. In Connecticut, there’s a luxury tax for any vehicle priced over $50,000 that tacks an additional 1.4 percent onto the bill. We’re not saying you should register your car in New Hampshire, but it pays to review your state’s tax laws. Your insurance premiums could also rise if your lease contract specifies coverage levels beyond what you currently carry.

Just sign and drive, they say. As you can see, though, there's a lot more to it than that. —Clifford Atiyeh

Source” U. S. News & World Report

 

Wow, perfect! Thanks for sharing this!

 

Because the lease cost depends not only on purchase price but also residual value, the lease on the 2020 would not be guaranteed to be lower. It all depends on what kind of deal you're able to negotiate, available incentives, etc. If the difference in purchase price between the two (accounting for all incentives) is less than the difference in residuals (unlikely IMO unless you are being given a raw deal on the 2020), then the 2021 might actually end up cheaper.

 

I understand the concepts, but why not people just compare lump sum + monthly payments for same period of time and use that to compare leases? That will be the end results of all factors mentioned above.

 

Yep, add up all you pay, and that is how much it costs.

Then you give it back and start over again.

 

My hesitation with leasing is the yearly mileage factor. I don't want t ever think, "I am putting on too many miles, I can't drive the car for awhile". I know one can go over the lease allowed miles, but paying for miles at lease end can be a big hit...on the other side, when you lease, you "pay" for the miles you expect to use. If you only use half of them, you paid too much for the lease. "Most" leases are about 12,000 miles per year. You can certainly get a 15,000 miles per year lease, for more money, which is usually cheaper then paying for the excess mileage at lease end.. I don't remember what a sample "per mile" dollar figure is at lease end, but it is almost always more costly then starting with a lease amount that is close to your expected usage.

I hope this helps. The RDX is an amazing car, I hope your family gets one and enjoys it as much as I do.

 

The same applies to the downside too — it’s a bad deal if someone is driving too little.

 

https://www.edmunds.com/car-leasing/...ood-lease.html

 

Don't forget the resale value of an unleased 'paid up' vehicle. It can be a down payment on a newer car. I usually finance for four to six years based upon the monthly payment and then pay it off as early as reasonably practicable.

 

What do you all think of the lease protection on wear and scuffs? Should I skip on that?

 

My 2 cents on this: First of all it's my understanding that preowned cars, mileage affects the price hugely. Regarding that, let's say you put 12,000 miles/year, the residual value will be calculated assuming the car will have 3,6000 miles when the lease ends. If the car is actually driven less than expected during the 3 years and ended up only ~2,5000 miles, the actual value will be significantly higher than the projected residual value. In that case, it might make more sense to purchase the car at the end of the lease, and then sell/trade-in, which should give you some margin of profit that compensate what you've paid for the more annual mileage. While selling/trading in is some extra work to do, it's not too big a deal. Considering that, I would allow myself more room when deciding the mileage of leasing, based on reasonable and rational estimation of course.

 

Got ourselves a 2021 RDX A-Spec. Glad to join the Acura Family.

 

Regarding the original question, is there anything different 2021 wise compared to the 2020, issue wise?

As far as the overmiles, Acura is usually pretty good at forgiving miles ( if you lease another one )

 

I'm never sure when I get a new car if I will stay with that manufacturer when I am ready to replace it. I may want to try the next latest and greatest. But I appreciate your comment.

Thanks!

 

yeah, i thought i was going to do 15k miles per year and have done 11k in 2 years so lease is up next aug jit for a 2022 model. But i can sell it for more than the residual payoff, even now or work a better deal for the next one.

 

Dreams must be fulfilled, so making this purchase is much more than mandatory.

 

Dreams must be fulfilled, so making this purchase is much more than mandatory. All the more, in our century there are plenty of opportunities to borrow money and then repay it. For example, you can take a mortgage to keep your property without selling it, or a loan with the Pledge of a real estate. The most important thing is to analyze very well the amount you borrowed and what your monthly income is. In cases like this I resort to lainojen yhdistäminen 45000 to be sure of the next steps and that I will be able to close the debts