MikeDeCorte

I just orderd a TSX and the dealer is giving me the car for $349 a month for 48 months with 12k miles a year. This is for the non-navi model.

Does this seem like a decent deal compared to what you guys are getting?

Additionally, if the non-navi is $349 a month... approximately how much would the navi cost me?

Later,
Mike

Edit: BTW.. the $349.00 is with approx $800 down. Also, it includes tax.

zero

In palm beach county I know they are advertising a TSX non Navi, 6 speed, no spoiler, 12K, 4000 out of pocket for 249 a month before tax....I guess it depends on how much you are putting out of pocket. Inceptions usually run about $1100 here and its generally about 18 bucks per $1000 down. Navi would have cost me 45 bucks extra on mine.

jackspat2

Well Mike, you should go around and get some quotes aka car shopping.

Romak3

Mike
Take a few minutes and check out www.leaseguide.com.
I too am going to lease the TSX and this site tells you how to figure out the lease breakdown to the cent. It entails a bit of mathmatics, but at least you'll know if your getting screwed. I think you can pay a small fee for printable work sheets, but the information is all there to do it yourself for free. $349 doesn't sound terrible from what I've seen, but check the figures, why pay too much.

sheik28

To get a rough estimate... see what the selling price of the navi is (how much will it add to your MSRP) and divide it by he term of your lease... 48 months and just add that to what your paying per month now. Roughly thats about an additonal US$41 per month. Keep in kind that is without tax and applicable finance charges.
I am paying 306 for a non-navi 5AT 36 month lease with 15k per year. I also traded in a 5 year old slightly beat up Civic that had an accident history.

MikeDeCorte

Anyone else have any input on this?

MikeDeCorte

Anyone else? I know there are more people who are leasing!!!!

ender

On a lease you need to find the best deal that has the least amount of money down. Remember, your never gonna see it again. All that money down does is reduce your capitalized cost. Ideally putting down the 1st payment only is the way you want to go....... and be sure to carry it to term.

ebcheon

i don't know why people would lease the car? doesn't make sense to me... but that's prolly b/c i haven't researched leasing stuff yet.

just doing basic quick calculations, but at $349*48 months = $16,752 + $800 down payment = $17,552. and in 4 years, you'll have nothing to show for it (i mean unlike financing, where you'll have a car to show for it).

i'm assuming you don't want to pay more than $350 a month. why don't you just save up 20% for the down payment (the usual figure), and finance it for 5 years (only 12 more months than the lease), and pay $400/month to purchase the car? (all assuming your OTD price was $30k, which would include the navi if you get a good deal). moreover, given a strict limit of 12k miles/year, mean that you'll most likely pay a fee after 48 months and from what i hear, that fee is really high.

but perhaps, you can provide me some reasons why people lease... b/c right now, i don't understand.

MikeDeCorte

With leasing you still have the option to purchase at the end of the term.

ebcheon

but at what costs? they don't simply sell it to you for the difference that you agreed on do they?

Jaeger

Generally speaking, yes.

You will have the option to either purchase the vehicle for the agreed-upon residual value at the end of term, or walk away from it. In some cases the car may be worth more than the residual (say, for example, you put a lot less mileage on it) in which case the equity in the vehicle would work to your benefit if you chose to purchase it.

The theory behind leasing is that you only pay for the depreciated value of the vehicle over the term of the lease, and hence, don't tie up as much money in the car for the period you are driving. Say on a $40K car that loses half its value over 4 years. With a lease, you pay $20K over the term and have the option to buy the vehicle at the end of term. With financing, you pay $40k over the same period, but own the vehicle at the end. The positions are theoretically equivalent, but with the lease you would have tied up less money over that term, and could have put that money to work for you.

Leasing can make sense if:

1) You take good care of your vehicle and don't plan to modify it.
2) You can live with the mileage restrictions (which are negotiable).
3) You plan to keep the vehicle for the full term (it's easier to get out of a marriage than a lease).
4) You want to change your car relatively frequently and always want to drive a vehicle under full warranty.

Just my $0.02

Cheers,

Jaeger

Edited to add:

Leasing is a lot less straightforward than an outright purchase or purchase / finance. You've got to understand the variables and appreciate that they are all negotiable. If you focus only on the monthly payment (which is where the dealer wans you to look) you will get hosed.

MikeDeCorte

So I should ask the dealer specifically what the residual value, etc is? Do you have any point outs of what I should ask for?

The have siad that they can give me a non-navi for $349 a month with $800.00 down. Additionally, this is for 12k miles for 48 months.

$349.00 seems somewhat fair to me. What else should I take a look at? I dont see how I can get hosed on this. Could you please explain further?

Jaeger

Things you might want to know:

1)What is the cap cost? What items are included (incorporated) - freight, PDI admin fees etc? You're not going to accept list price as the basis for the cap cost are you?

2) What is the residual? Yes, you need to know this. What percentage is it of the cap cost? Does it seem reasonable (should be somewhere between 47-50%). Remember, you only want to lease cars that don't depreciate quickly. Acura / Honda claim their vehicles hold their value well (and they do). This should be reflected in the residual.

3) What is the money rate? This isn't quite the same as the interest rate on a loan, but close enough.

4) Make sure that you have the option to purchase or walk away at the end of term. Most leases are set up this way, but don't assume.

5) Make sure you understand what their definition of unreasonable wear and tear is.

6) Are you able to live with the allotted mileage? You want to be sure of this, because penalties for excessive mileage can be severe. Make sure you know what they are.

7) Is gap insurance included in the price? Brother, you want this. Otherwise, if the car is a write-off, you could be on the hook for the difference between the insurance payout and the payout on the lease.

8) Are you ging to keep the vehicle for the full term? The answer better be yes, otherwise don't lease, or lease for a shorter term.

9) Is there a security deposit, or is that enire downpayment going to your fist payment and cap cost reduction?

These are just a few things that come to mind. Please try to do some resaerch on leasing before you sign on the dotted line. There is much information available on the internet. It can be a very good option, but you need to understand exactly what's going on.

Hope this helps.

Jaeger

danny25

yes, definitely ask what the residual value is. If it's outrageously high, then you're basically limiting your options to only giving the car back at the end of the lease. But if it's reasonable, that gives you the option of buying the car at the end.

For example, if the residual on this TSX is $15000, then that's like they're selling the car to you for $32500. No one would pay that much if they were purchasing it, so don't lease a car like that either.

MikeDeCorte

I'm sending my sales man an email asking the following:

2004 TSX, non-navi
36&48-month lease
12k miles
-Sale price of vehicle
-Residual value
-Money factor
-Total due at inception

Is there anything else I should ask?

danny25

and remember, all of that is negotiable.

MikeDeCorte

Sweet. I appreciate your help.

I assume there is nothing else to ask for right now right? IS the money factor also negotiable? I think I had asked them about that and they said that they use the numbers which acura gives them.

danny25

everything is technically negotiable, but whether they will negotiate is another matter.

You could check around banks, and credit unions to see if they offer any lease programs. I know the GM credit union here had a program where they basically buy the car and lease it to you. I don't think they called it a lease though, it was something like a balloon loan. But it had the same form as a lease: milage limits, buy out or return options at the end. So if you found a place that would do that, you could use their numbers to bargain with the dealer.

NickR

Dude, I leased the exact same car. Here was my deal.

Selling Price $25790
Down Payment $200
Term 48 months
Residual 65%
Money Factor 0.0028
State Sales Tax 6%

Total monthly payment (w/ tax incl) = $339.47

So you're pretty close, I'm probably lower because the selling price is lower.

brerpie

That looks like a good deal. They are giving me the car for $25500.00.

I wonder why my quote is 10 bux more. Is 65% residual pretty good? What should be a number I should get close to for this specific car?

danny25

65% residual after 4 years??? Maybe I'm mistaken, but I thought most cars were at about 50% of their value in 3 years. The residual value on my CL when I leased it almost 2 years ago was 52% on a 39 month lease.

So yes brerpie, if the residual actually is 65%, it's VERY good.

brerpie

I don't completely understand why higher is better. Could you elaborate just a tad? You have helped me so much. Thanks again!!!

danny25

as Jaeger said "The theory behind leasing is that you only pay for the depreciated value of the vehicle over the term of the lease." So if the car only depreciates 35%, as it would in the case of a 65% residual, then you would only have to pay for 35% of the car over the lease term. The less you have to pay over the 36-48 months, the better of course.

Jaeger

A higher residual is definitely good if you plan to trade the car in at the end of term. A higher residual reduces your monthly payment because what you are paying over the term of the lease is the difference between the cap cost and the residual. You want a higher residual and lower cap cost so that the difference between the two (your lease cost) is as low as it can be.

Now, a lot of car companies have been burned by using artificially high residuals as a means of advertising really low monthly payments, and then getting back a bunch of cars that were worth a LOT less than the residual (their problem, not ours). I find 65% to be outrageously good. If someone offered that to me on a TSX for 3 years much less 4, I'd jump on it in a heartbeat. I know of no regular production automobile that is worth 65% of its value after 4 years.

Cheers,

Jaeger

howa

Beware! LONG POST coming up! (Also my first post )

Everybody provided great info so far. I'd just like to add some more from the research I've done. I don't claim to be an expert at leasing, but I've been doing lots of reading and learned a lot about leasing in general. There's a wealth of useful information on edmunds.com and one of the hosts (Car_Man) in their Town Hall forum has access to manufacturers' captive finance companies' leasing programs. You can try this link and post questions:

http://townhall-talk.edmunds.com/Web...MZj.0@.ee9394d!Z=

The important things to look for when you lease are:
Capitalized Cost (selling price of the car)
Residual Value (set by the bank, based on a percentage of the total MSRP, dealers cannot change this)
Money Factor (also set by the bank, but dealers usually mark it up to make extra profit; multiply MF by 2400 to get an approximate interest rate %)

In the case of the TSX, the captive AHFC program for 36 months and 12k miles per year in June was:
Money Factor: 0.00220, Residual Value: 65% for non-navi and 63% for navi. If we use a non-navi TSX at a selling price of $25990 ($1000 off MSRP), the zero-down, pre-tax monthly payment comes out to be about $330.

It is also important to remember NOT to put any money down (or as little as possible). This is true because a downpayment in a lease does not help you build equity. It only reduces the amount of interest you'll pay over the term. If you decide to purchase the car at the end of the lease, your downpayment will not affect the purchase price. The other reason is that in case the car is totaled or stolen, the insurance company will only pay the bank the balance on the lease and you will never see your down payment again.

Sorry for the long post. I'll finish up now. Let me know if I can be of further help. I also created a spreadsheet to calculate monthly payments if anybody is interested.