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Honda S2000 Lease Questions

CarMan@EdmundsCarMan@Edmunds Posts: 38,515
edited April 10 in Honda
Hi everyone. Please use the following discussion to post any questions that you have about leasing a Honsa S2000. Thanks.

Car_man
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  • Dear Car_man:

    Thanks for the forum.

    I'm thinking about leasing a S2000, but am not sure about whether the current deal is a good one. It runs until the end of Oct 3rd.

    Closed-end lease for 2005 S2000
    MSRP $33,700.00 (includes destination).

    Actual net capitalized cost $29,376.41 Taxes, license, title, registration, documentation fees, options and insurance extra.

    Total monthly payments $10,764.00. Option to purchase at lease end $19,546.00. Lessee responsible for maintenance, excessive wear/tear and 15/mile over 12,000 miles/year.

    $299.00 per month for 36 months with a $2,499.00 capitalized cost reduction. $3,693.00 total due at lease signing (includes first month's payment, security deposit, acquisition fee and capitalized cost reduction; total net capitalized cost and base monthly payment does not include tax, license, registration, options and the like).

    I've gone thru the leasing guide and questions, but can't seem to understand the "Actual net capitalized cost". Is that the Lease price? Does it include the $2500 capitalized cost reduction? If so, do you think I can I negotiate the capitalized cost reduction to less?

    Thank you so much for your help in understanding this confusing issue.
  • You're very welcome etomidate. Honda is running a pretty attractive lease program on the 2005 S2000 this month. Its buy rate lease money factor for a 36 month lease of this car is currently only .00053. This is equivalent to an interest rate of around 1.3%. The thing that I do not like about the lease that Honda is advertising on the S2000 right now is the large down payment. Most manufacturers advertise leases with money down so that the monthly payments look more attractive, but consumers can and should lease any vehicle that they are interested in without making any sort of capitalized cost reduction. I advise consumers against making any sort of down payment when leasing for two main reasons. The first is if your vehicle is totaled in an accident or stolen during your lease, your insurance company pays off the bank that you were leasing it through and your down payment essentially disappears. The second main reason is that down payments on leased vehicles do nothing to reduce their lease-end purchase prices. So your lease-end purchase option price for your S2000 would be exactly the same, regardless of whether you had put $2,500 down, or had made absolutely no down payment at all.

    The phrase "net capitalized cost" means the amount that you are financing on this lease. It is equal to your vehicle's selling price minus any sort od capitalized cost reduction that you make. This means that a net cap cost of $29,376.41 is really equivalent to a selling price of $31875.41, or a discount of $1824.59 off of this car's full MSRP. This deal looks like it is about $1,500 over invoice. If there is a decent level of competition in your area, I would not be surprised if you were able to negotiate a lower selling price than this. For additional feedback on S2000 pricing, make sure to stop by the following discussion: "Honda S2000: Prices Paid & Buying Experience".

    Car_man
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  • Thanks Car_man for the info.

    The selling price for the car at 31875.41 is way too high. With the new 2006's coming to market in late October...if not sooner, they really want to move the 2005's. I'm getting quoted at $29,250-29,500. I feel that that it is a great price, but probably won't wont get the above money factor. Also, if I don't want to put any money down for the cap reduction (as in $0), they may be less willing to do business.

    However, I'm sticking to my guns b/c this would be a total splurge buy. With my fico score at around 800, I'm pretty sure that I would get a good money factor...just not the .00053.

    We'll see. Thanks once again for your help.

    keep you posted on what the guys at the dealership are saying.
  • You're very welcome etomidate. Thanks for offering to let us know how everything turns out. Good luck in your negotiations.

    Car_man
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  • hi car_man,
    do you know if honda financial will allow zero down with their lease specials?
    for instance, the current s2000 requires about $3600 down...which equals to $100 a month for 36 months. will they allow $399 instead of $299 for 36 months?

    thank you.
  • kyfdxkyfdx Posts: 31,211
    Virtually all leases are available with no money down... Some may require the 1st payment and security deposit upfront, but acquisition fees and the cap cost reductions you see in advertised leases can almost always be rolled into the cap cost..

    Sometimes the payment is slightly higher than the rolled in amount divided by the term, as you are financing a higher amount... but, you have the general idea correct..

    regards,
    kyfdx
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  • do you think honda financial services will honor the low money factor rate since i'm not abiding by their lease "special" (since i want no down)?

    thank you.
  • kyfdxkyfdx Posts: 31,211
    It won't make any difference to Honda Finance... Your dealer may try to mark up the rate to achieve some extra profit, but that will be independent of the amount of your downpayment..

    The advertised downpayment, is just so they can show a low monthly payment..

    regards,
    kyfdx
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  • The dealers are not allowed to hike up the money factors on these S2000s since they are on special. Whatever you qualify for, whether it be Super Preferred, Preferred, Standard, or Select, they have to give you the corresponding money factor and aren't allowed to charge you more and pocket the difference. Normally they can hike the rate up and pocket the surplus, but not on this lease special. Just a little FYI
  • Well, I'm back to let you know of my dealings.

    After much research, etc....blah, blah, blah. I am finally pulling the trigger on the S2000.

    Just talked to Norm Reeves Honda (apparently #1 dealership in volume in the world - like that really is supposed to impress me). They say that I should be able to get the price of my S2000 to about $360/month + taxes. Essentially they are letting me off the hook with putting all that money up front ($2,499 cap cost reduction). Just rolling in it over into the 36 month lease.

    Do I think it is a great deal? Well sure, b/c the acquistion fee is rolled over the 36 months as well and no security deposit. Get a car without very much money down. I'll get in there and see what hidden fee they'll conjure up.

    the saga continues....

    This monday is when I'll set aside some time and head in there to talk things over. The best part is that I can completely walk away from the deal...Should I? over $20-30 a month when all the other conditions are good?
  • ajpbf7ajpbf7 Posts: 69
    Will Honda run it through the end of this month? If so any changes?
  • Hi oceanexprt. Yes, like most banks Honda Finance will allow consumers to lease vehicles without making any sort of capitalized cost reduction. In fact, it is in your best interest as a consumer not to put money down when leasing. Eliminating the down payment from Honda's advertised lease will make its monthly payment higher, but figuring out exactly how much higher is not quite a simple as dividing the advertised down payment by the number of months in the lease and adding the result to the monthly payment. If you let me know the full MSRP and selling price of the S2000 that you are interested in, I can calculate what its lease payment should be for you without any money down.

    Car_man
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  • Hi ajpbf7. Unfortunately, Honda did not renew its special lease program on the 2005 S2000 for the month of October. It replaced the special money factor that it was providing on this car with $750 dealer cash. That doesn't mean that you can't still lease one, just that the money factor will be higher. If you decide that you still want to lease an '05 S2000, make sure to take this dealer cash into account when negotiating your vehicle's capitalized cost.

    Car_man
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  • ajpbf7ajpbf7 Posts: 69
    Thanks carman. Could you provide me with the new money factor and residual please. I doubt it will be as attractive to lease copared to last month, but I would like to know the current rates. I appreciate it.
  • You're welcome ajpbf7. 's exact money factor and residual value will vary depending upon how long you want to lease it for and how many miles per year you need to be able to drive it. For now, I will provide you with its 36 month, 15,000 miles per year lease program. Let me know if you need information for a different term or mileage allowance. If you were to lease a 2005 Honda S2000 through Honda Finance right now for 36 months with 15,000 miles per year, its buy rate lease money factor and residual value should be .00255 and 56%, respectively.

    Car_man
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  • hi carman,
    if i base it on the purchase price of the car at dealer invoice,
    how much a month would that be with zero down meaning zero cap reduction? of course taxes, registration would be additional.
  • I'm not car_man, but punching his numbers into a spreadsheet give a payment of $444.96 plus tax assuming a MSRP of $33700 and a capitalized cost of $30370 (i.e. invoice). This is assuming you pay all fees yourself (acquisition fee, first payment, dealer fees, security deposit, etc).

    -Dave
  • wow..that's kind of steep. is that because honda doesn't have the special money factor rate anymore?

    thanks again.
  • Hi oceanexprt. If you were able to lease a 2005 Honda S2000 at dealer invoice, the dealer that you get it from would make the $750 dealer cash that is available on it right now on your deal. Let's estimate what this car's lease payment should be alike at this price. According to my calculations, if you were to lease an '05 Honda S2000 with an MSRP of $33,700 and a selling price of $30,370 (dealer invoice) through Honda Finance right now for 36 months with 12,000 miles per year, your zero down, pre-tax monthly payment should be around $428, assuming that you pay a security deposit, Honda Finance's $595 acquisition fee, and qualify for its top credit tier. This lease is a little higher than it would have cost to lease this car a couple of months ago because Honda is not providing lease support on this model any longer.

    Car_man
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  • We are a small business we are planning to buy or lease a car soon. Do you have the pros and cons of the two choices? Shirlgurl1
  • We are a small business we are planning to buy or lease a car soon. Do you have the pros and cons of the two choices? Are there any companies with more than 12000 miles with a lease? shirlgurl1
  • My dealer has an 05 S2K that he supposedly "really wants to sell." I drive a lot and the deal is 18,000 miles per on a 3 year lease with no money down for $500.00 per. He started at $536.00 and is using invoice on paper as the starting point. Is it a deal?
  • I leased an '03 for 4 years and the lease will be up in July of '07. I'm thinking of buying the car even though I've had an accident in it and even though I don't use it that much, 11k in 3 years. I just love the car and have never enjoyed driving one so much. I'm been trying to research how to best negotiate with American Honda and not get ripped off again. My residual is 19+. Any major pitfalls I should be on the lookout for when the time comes?
  • Hi shirlgurl1. There are tons of banks out there that lease vehicles with more than 12,000 miles per year. In fact, most banks base their residual values for leases on 15,000 miles per year. If you want to drive a Honda more than 15,000 miles per year, you will have to purchase additional miles on a per mile basis. It is less expensive to do so at lease signing than it is to wait until lease-end and have to pay an excess mileage penalty.

    I am not an accountant, so I hesitate to comment on the pros and cons of leasing for your specific business. You should consult your accountant to find out what the best way to finance your new vehicles is tax-wise.

    Car_man
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  • Hi godot1066. If you are getting this car for dealer invoice, you are getting a decent deal. The dealer isn't doing you any special favor though. They are still making the $750 dealer cash that Honda is providing on the '05 S2000 on a leftover convertible in the middle of winter. I would be happy to give you my opinion on the lease payment that you were quoted, however in order for me to do so I need you to tell me this car's full MSRP and exact selling price.

    Car_man
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  • 500 BUCKS A MONTH TO LEASE? :surprise:

    Just for comparison, I BOUGHT my S2k for 28k and my payments are almost the same... You should be able to pick an 05' leftover for about 29k and have your payments be around $500 - 550 per month (60 months) to BUY it.
  • richstarichsta Posts: 1
    Hi all, I'm gonna try my best to lease a 2006 s2000 this weekend, and I need your help with some lease figures. Is this quote the going rate these days? Or can i get better?

    Sale price: $500 below invoice (invoice is $31,183)
    Months: 36
    Mileage: 12k/yr
    Money factor: .00265
    Residual: 57%
    Down payment: $2,000
    Monthly Payment = $426 + tax

    I would preferrably like to pay $0 down and low $400's a month, but it doesn't seem like this is possible.
    Also, the $426 after computing these numbers doesn't seem right for some reason.

    Can you help me out? Btw im located in SoCal
  • jb2005jb2005 Posts: 4
    You are correct in thinking the $426 number is wrong. Plugging in the numbers given above yields a payment of $385. Dropping the 2K down payment brings it up to $445.
  • kurtosiskurtosis Posts: 3
    Hi all:

    So my younger brother goes out to lease a S2000 excited about their $299/month $3,693 total due at signing promotion. He was so excited that he signed the papers for $0 down, $445 a month (including NY tax and all that) right there after inquiring about no money down option. He calls me up and asks me to help him pick the car up tomorrow and told me about his "wonderful" deal. However, after reading this forum, it doesn't seem that way. So basically he signed the lease papers and is supposed to pick the car up tomorrow.

    My question is, is there any way to "return" the car since he didn't drive it off the lot yet? Someone told me there is a 24 hour or 3 day return law (i live in NY if state laws matter). I just want to be able to negotiate a better price for him.
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hi kurtosis. The 3 day return law that you mentioned is an urban legend. Once a consumer has physically taken delivery of their new vehicle they are basically stuck with it. Having said this, your brother may be able to get out of this deal if he has not driven his S2000 off the lot yet. The fact that he did not put any money down actually works to his advantage in this situation because the only thing that the dealer can do to try to force him to finalize this deal is threaten to keep his money. Of course, needless to say the dealer that he is working with is going to be less than pleased when they thought that they had a deal and all of a sudden a third person barges in trying to renegotiate it.

    Car_man
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