1.9% financing through Honda
03-25-2007 | 06:05 PM
#1
Thread Starter
Racer
Joined: Mar 2005
Posts: 405
Likes: 0
From: Streamwood, IL
1.9% financing through Honda
I have a scenerio I want to run by you guys...
I am going to be trading in my '05 TL on a '07 TL-S in the next few weeks. I own the car free and clear as I never had a car loan against it.
I negotiated the TL-S for $36,200 plus TTL and got $27K for my trade. I haven't done anything through finance yet as they are still trying to find a 6-spd for me. I will owe about $10,400 to buy the new car (which I planned to just finance because of the 1.9%).
Here's my question... In order to maximize the value of the 1.9% financing, would Honda Motor Finance and the dealer allow me to finance the entire new car purchase? This would require them to cut me a check for $27K for my trade.
If this would be possible, I can make about $4K over 3 years on their money as I can get 5% in a fixed income fund at Fidelity right now.
Any thoughts? Has anyone ever done this?
I am going to be trading in my '05 TL on a '07 TL-S in the next few weeks. I own the car free and clear as I never had a car loan against it.
I negotiated the TL-S for $36,200 plus TTL and got $27K for my trade. I haven't done anything through finance yet as they are still trying to find a 6-spd for me. I will owe about $10,400 to buy the new car (which I planned to just finance because of the 1.9%).
Here's my question... In order to maximize the value of the 1.9% financing, would Honda Motor Finance and the dealer allow me to finance the entire new car purchase? This would require them to cut me a check for $27K for my trade.
If this would be possible, I can make about $4K over 3 years on their money as I can get 5% in a fixed income fund at Fidelity right now.
Any thoughts? Has anyone ever done this?
03-25-2007 | 07:28 PM
#2
Instructor
Joined: Mar 2007
Posts: 127
Likes: 5
If you can afford the payment and your credit is very strong you shouldn't have a problem and if I were you I would take their money and use it for the low interest rate. The payment would be about $1000.00 per month for 36 months at 1.9% with about 6% sales tax. Over the 3 years you are only going to pay about $1000.00 in interest on the loan. It's a great deal.
03-25-2007 | 07:36 PM
#3
Thread Starter
Racer
Joined: Mar 2005
Posts: 405
Likes: 0
From: Streamwood, IL
Originally Posted by jvette
If you can afford the payment and your credit is very strong you shouldn't have a problem and if I were you I would take their money and use it for the low interest rate. The payment would be about $1000.00 per month for 36 months at 1.9% with about 6% sales tax. Over the 3 years you are only going to pay about $1000.00 in interest on the loan. It's a great deal.
I plan to draw from the $37K on a monthly basis to pay the $1000/month payment. I figure I will come out over $4,000 ahead at the end of 36 months.
03-25-2007 | 09:58 PM
#4
Drifting
Joined: May 2006
Posts: 2,499
Likes: 221
From: Carlsbad, CA
New car dealers generally don't want to part with cash, so I would find it
unrealistic to get a 100% loan at 1.9%. I imagine Honda would want at least
10% down. Also if I understood things right, you wouldn't be drawing from
37,000 in a money market or CD. It would only be $27,000 which is the trade-in price of
your car. As pointed out earlier, your payment would be about $1050 a month
with the interest being $58 declining about $1.50 each month. However, your
interest earned would be at best $112 at the beginning and dropping like a
rock each month you 'fund' the car loan. Towards the end of the loan, you'll
need to kick in money to continue to make the payments.
You didn't ask the bigger question, which is does it make financial sense to
do such a trade? I'm not trying to preach to you or anything like that.
Perhaps you are already financially independent and don't need to work. If
that's the case then GO FOR IT!
If that is not the case, here's another perspective that you might want to
consider:
While the 1.9% rate is very compelling and all (I have a 2.9% that seemed
great 6 months ago). You have a 2 yr old car that isn't drastically different
than the car you're thinking about buying. We all know about the 30+ HP
increase, and better nav, and all. But is this car really worth effectively
paying 10k more for? You have done some mods to your car that presumably makes
the performance difference even narrower as well. You're paying invoice +
$1000 approximately and sales tax (again) for the opportunity to drive a more
powerful car that has an additional warranty.
You're projecting that you're going to 'save' 4K on the arbitrage on holding
the car for 3 years. This assumes you can lock in a flexible money market at
5% that entire time or you're doing a combo of laddering CDs and a money
market to withdraw from for making the $1000 payments. It also assumes that
you will be employed the entire time frame and won't need access to your 27K
and declining rapidly nest egg. It also assumes that the depreciation of the
2007 TL-S is less than your 2005 TL.
When the heavily anticipated 2009 TL comes that should truly be much different (hopefully AWD and even more powerful) what are you going to do? If you're tempted to bite on this deal you're probably going to want to bite on the 2009 car as well possibly. By then, your
36K car will have depreciated to around 30K if you're lucky.
Assuming that you are like many Americans and hold a mortgage on your house,
I have the following suggestion:
- consider paying down your mortgage. You're probably paying 5.5+ % and have
20 or more years still on it. You'll save a lot more than $4000 if you were
to only pay down $2000 or so now. That is a risk-free ?% return that could save a year or more of payments.
It crossed my mind (briefly) last week in thinking about the 1.9% as well, but
it didn't make financial sense to me anyway. Even Acuras depreciate and you'll
be paying sales tax again. I guess it comes down to want .vs. need. Do you really
want the car or do you need the car. You might find your life situation might
change the next 3 years where you need a different type of car. In that case,
you'll need to sell this and buy something else (hopefully not a minivan).
unrealistic to get a 100% loan at 1.9%. I imagine Honda would want at least
10% down. Also if I understood things right, you wouldn't be drawing from
37,000 in a money market or CD. It would only be $27,000 which is the trade-in price of
your car. As pointed out earlier, your payment would be about $1050 a month
with the interest being $58 declining about $1.50 each month. However, your
interest earned would be at best $112 at the beginning and dropping like a
rock each month you 'fund' the car loan. Towards the end of the loan, you'll
need to kick in money to continue to make the payments.
You didn't ask the bigger question, which is does it make financial sense to
do such a trade? I'm not trying to preach to you or anything like that.
Perhaps you are already financially independent and don't need to work. If
that's the case then GO FOR IT!
If that is not the case, here's another perspective that you might want to
consider:
While the 1.9% rate is very compelling and all (I have a 2.9% that seemed
great 6 months ago). You have a 2 yr old car that isn't drastically different
than the car you're thinking about buying. We all know about the 30+ HP
increase, and better nav, and all. But is this car really worth effectively
paying 10k more for? You have done some mods to your car that presumably makes
the performance difference even narrower as well. You're paying invoice +
$1000 approximately and sales tax (again) for the opportunity to drive a more
powerful car that has an additional warranty.
You're projecting that you're going to 'save' 4K on the arbitrage on holding
the car for 3 years. This assumes you can lock in a flexible money market at
5% that entire time or you're doing a combo of laddering CDs and a money
market to withdraw from for making the $1000 payments. It also assumes that
you will be employed the entire time frame and won't need access to your 27K
and declining rapidly nest egg. It also assumes that the depreciation of the
2007 TL-S is less than your 2005 TL.
When the heavily anticipated 2009 TL comes that should truly be much different (hopefully AWD and even more powerful) what are you going to do? If you're tempted to bite on this deal you're probably going to want to bite on the 2009 car as well possibly. By then, your
36K car will have depreciated to around 30K if you're lucky.
Assuming that you are like many Americans and hold a mortgage on your house,
I have the following suggestion:
- consider paying down your mortgage. You're probably paying 5.5+ % and have
20 or more years still on it. You'll save a lot more than $4000 if you were
to only pay down $2000 or so now. That is a risk-free ?% return that could save a year or more of payments.
It crossed my mind (briefly) last week in thinking about the 1.9% as well, but
it didn't make financial sense to me anyway. Even Acuras depreciate and you'll
be paying sales tax again. I guess it comes down to want .vs. need. Do you really
want the car or do you need the car. You might find your life situation might
change the next 3 years where you need a different type of car. In that case,
you'll need to sell this and buy something else (hopefully not a minivan).
03-26-2007 | 05:58 AM
#5
Thread Starter
Racer
Joined: Mar 2005
Posts: 405
Likes: 0
From: Streamwood, IL
Originally Posted by LaCostaRacer
New car dealers generally don't want to part with cash, so I would find it
unrealistic to get a 100% loan at 1.9%. I imagine Honda would want at least
10% down. Also if I understood things right, you wouldn't be drawing from
37,000 in a money market or CD. It would only be $27,000 which is the trade-in price of
your car. As pointed out earlier, your payment would be about $1050 a month
with the interest being $58 declining about $1.50 each month. However, your
interest earned would be at best $112 at the beginning and dropping like a
rock each month you 'fund' the car loan. Towards the end of the loan, you'll
need to kick in money to continue to make the payments.
You didn't ask the bigger question, which is does it make financial sense to
do such a trade? I'm not trying to preach to you or anything like that.
Perhaps you are already financially independent and don't need to work. If
that's the case then GO FOR IT!
If that is not the case, here's another perspective that you might want to
consider:
While the 1.9% rate is very compelling and all (I have a 2.9% that seemed
great 6 months ago). You have a 2 yr old car that isn't drastically different
than the car you're thinking about buying. We all know about the 30+ HP
increase, and better nav, and all. But is this car really worth effectively
paying 10k more for? You have done some mods to your car that presumably makes
the performance difference even narrower as well. You're paying invoice +
$1000 approximately and sales tax (again) for the opportunity to drive a more
powerful car that has an additional warranty.
You're projecting that you're going to 'save' 4K on the arbitrage on holding
the car for 3 years. This assumes you can lock in a flexible money market at
5% that entire time or you're doing a combo of laddering CDs and a money
market to withdraw from for making the $1000 payments. It also assumes that
you will be employed the entire time frame and won't need access to your 27K
and declining rapidly nest egg. It also assumes that the depreciation of the
2007 TL-S is less than your 2005 TL.
When the heavily anticipated 2009 TL comes that should truly be much different (hopefully AWD and even more powerful) what are you going to do? If you're tempted to bite on this deal you're probably going to want to bite on the 2009 car as well possibly. By then, your
36K car will have depreciated to around 30K if you're lucky.
Assuming that you are like many Americans and hold a mortgage on your house,
I have the following suggestion:
- consider paying down your mortgage. You're probably paying 5.5+ % and have
20 or more years still on it. You'll save a lot more than $4000 if you were
to only pay down $2000 or so now. That is a risk-free ?% return that could save a year or more of payments.
It crossed my mind (briefly) last week in thinking about the 1.9% as well, but
it didn't make financial sense to me anyway. Even Acuras depreciate and you'll
be paying sales tax again. I guess it comes down to want .vs. need. Do you really
want the car or do you need the car. You might find your life situation might
change the next 3 years where you need a different type of car. In that case,
you'll need to sell this and buy something else (hopefully not a minivan).
unrealistic to get a 100% loan at 1.9%. I imagine Honda would want at least
10% down. Also if I understood things right, you wouldn't be drawing from
37,000 in a money market or CD. It would only be $27,000 which is the trade-in price of
your car. As pointed out earlier, your payment would be about $1050 a month
with the interest being $58 declining about $1.50 each month. However, your
interest earned would be at best $112 at the beginning and dropping like a
rock each month you 'fund' the car loan. Towards the end of the loan, you'll
need to kick in money to continue to make the payments.
You didn't ask the bigger question, which is does it make financial sense to
do such a trade? I'm not trying to preach to you or anything like that.
Perhaps you are already financially independent and don't need to work. If
that's the case then GO FOR IT!
If that is not the case, here's another perspective that you might want to
consider:
While the 1.9% rate is very compelling and all (I have a 2.9% that seemed
great 6 months ago). You have a 2 yr old car that isn't drastically different
than the car you're thinking about buying. We all know about the 30+ HP
increase, and better nav, and all. But is this car really worth effectively
paying 10k more for? You have done some mods to your car that presumably makes
the performance difference even narrower as well. You're paying invoice +
$1000 approximately and sales tax (again) for the opportunity to drive a more
powerful car that has an additional warranty.
You're projecting that you're going to 'save' 4K on the arbitrage on holding
the car for 3 years. This assumes you can lock in a flexible money market at
5% that entire time or you're doing a combo of laddering CDs and a money
market to withdraw from for making the $1000 payments. It also assumes that
you will be employed the entire time frame and won't need access to your 27K
and declining rapidly nest egg. It also assumes that the depreciation of the
2007 TL-S is less than your 2005 TL.
When the heavily anticipated 2009 TL comes that should truly be much different (hopefully AWD and even more powerful) what are you going to do? If you're tempted to bite on this deal you're probably going to want to bite on the 2009 car as well possibly. By then, your
36K car will have depreciated to around 30K if you're lucky.
Assuming that you are like many Americans and hold a mortgage on your house,
I have the following suggestion:
- consider paying down your mortgage. You're probably paying 5.5+ % and have
20 or more years still on it. You'll save a lot more than $4000 if you were
to only pay down $2000 or so now. That is a risk-free ?% return that could save a year or more of payments.
It crossed my mind (briefly) last week in thinking about the 1.9% as well, but
it didn't make financial sense to me anyway. Even Acuras depreciate and you'll
be paying sales tax again. I guess it comes down to want .vs. need. Do you really
want the car or do you need the car. You might find your life situation might
change the next 3 years where you need a different type of car. In that case,
you'll need to sell this and buy something else (hopefully not a minivan).
First...It would be $37K to leave invested for me. I set aside $400 a month in a "car fund" and have more than the $10K in the fund necessary to pay the difference necessary for the trade. If interest rates were to drastically change, I would just pay off the loan.
Second...I never purchase a new model the first year a car comes out. Even if the 2009 TL is amazing, I would surely wait a year or more.
Third...I am a big saver and aggressive with my mortgage. My morgage is at 4.625% and I have been paying an additional $2000-3000 a month toward principle for the last two years. I currently have 61% equity in my home and plan to have it fully paid off by the end of 2008 (with extra bonuses and such). I also have over a year of income invested (not as part of my retirement account) as an emergency fund.
Finally, as for my mods, I cannot stand my Magnaflow exhaust system...I feel it was a huge mistake. It is loud and has an annoying drone. I am frustrated by it everyday I drive the car. I was originally thinking of changing out the system to the '07 TL-S exhaust which also requires a new back bumper. This is about $1400-1500 out-the-door. That is what got me thinking about just upgrading to the '07 TL-S.
I agree that Honda may not let me finance the whole thing because dealers don't like cutting big checks. I am just wondering if they would be willing to cut a check at all. I would leave 10% or 20% down if require.
And sincerely...thanks again for all your comments.
03-26-2007 | 09:25 AM
#6
Drifting
Joined: May 2006
Posts: 2,499
Likes: 221
From: Carlsbad, CA
Originally Posted by carguyrob
Finally, as for my mods, I cannot stand my Magnaflow exhaust system...I feel it was a huge mistake. It is loud and has an annoying drone. I am frustrated by it everyday I drive the car. I was originally thinking of changing out the system to the '07 TL-S exhaust which also requires a new back bumper. This is about $1400-1500 out-the-door. That is what got me thinking about just upgrading to the '07 TL-S.
This will be a much shorter as well as my last post on this subject.
There are a few 'new' items in the 2007 TL that may have bugs in them:
transmission, nav, audio system with noise cancellation, etc. If you're real
beef is with the exhaust noise, put your stock exhaust on and save your money.
I'm assuming a planner like yourself thought of saving the stock exhaust
after you replaced it. Who knows, you may even get a $28k trade-in like some
of the others are getting.
There's a thread on the next page : "'04' .vs. '07'" that has the consensus
of: save your money.
03-26-2007 | 10:01 AM
#7
Thread Starter
Racer
Joined: Mar 2005
Posts: 405
Likes: 0
From: Streamwood, IL
Originally Posted by LaCostaRacer
Sounds like you're blessed with a high income and have a lot on the ball.
This will be a much shorter as well as my last post on this subject.
There are a few 'new' items in the 2007 TL that may have bugs in them:
transmission, nav, audio system with noise cancellation, etc. If you're real
beef is with the exhaust noise, put your stock exhaust on and save your money.
I'm assuming a planner like yourself thought of saving the stock exhaust
after you replaced it. Who knows, you may even get a $28k trade-in like some
of the others are getting.
There's a thread on the next page : "'04' .vs. '07'" that has the consensus
of: save your money.
This will be a much shorter as well as my last post on this subject.
There are a few 'new' items in the 2007 TL that may have bugs in them:
transmission, nav, audio system with noise cancellation, etc. If you're real
beef is with the exhaust noise, put your stock exhaust on and save your money.
I'm assuming a planner like yourself thought of saving the stock exhaust
after you replaced it. Who knows, you may even get a $28k trade-in like some
of the others are getting.
There's a thread on the next page : "'04' .vs. '07'" that has the consensus
of: save your money.
I also have and am planning to buy the '07 TL-S in a 6-speed. I am quite sure that is a carry-over transmission from '04-06.
Thanks!!
Trending Topics
03-26-2007 | 10:07 AM
#8
I'm sure you'd be able to find some kid local who would like your exhaust on your current TL.
Just swap your magnaflow for his stock exhaust and make him throw you some cash and cover the labor.
Just swap your magnaflow for his stock exhaust and make him throw you some cash and cover the labor.
03-26-2007 | 11:43 AM
#9
Thread Starter
Racer
Joined: Mar 2005
Posts: 405
Likes: 0
From: Streamwood, IL
I just talked to the Finance Manager at my Acura dealer. Turns out that I can finance the entire cost of the purchase to maximize the value of the 1.9% rate. They explained that it would take about a week to get the check for my trade in as they have to wait until Honda funds the loan and pays them.
This means that the total adjusted cost of upgrading from my '05 TL to a '07 TL-S will be about $6,600. That is a pretty sweet deal!
This means that the total adjusted cost of upgrading from my '05 TL to a '07 TL-S will be about $6,600. That is a pretty sweet deal!
04-09-2007 | 12:20 PM
#10
i am also looking hard at this 1.9% on a new TL-S. Hell, I earn 3% in my checking account, so this is just free money. Are you SURE that a TL-S falls under the 1.9%? i see they list MDX and TL, but they do not specifically list the TL-S. it would be just my luck that the S Type would not qualify for 1.9%.
Thanks
Thanks
04-09-2007 | 12:33 PM
#11
Thread Starter
Racer
Joined: Mar 2005
Posts: 405
Likes: 0
From: Streamwood, IL
Originally Posted by surlynkid
i am also looking hard at this 1.9% on a new TL-S. Hell, I earn 3% in my checking account, so this is just free money. Are you SURE that a TL-S falls under the 1.9%? i see they list MDX and TL, but they do not specifically list the TL-S. it would be just my luck that the S Type would not qualify for 1.9%.
Thanks
Thanks
http://www.edmunds.com/incentives/Re...centives.1.1.*
Thread
Thread Starter
Forum
Replies
Last Post
08_UA7_Gr33k
Member Cars for Sale
13
02-11-2016 02:17 PM
