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Honda Fit Lease Questions

CarMan@EdmundsCarMan@Edmunds Posts: 38,518
Hi everyone. Please use the following discussion to post any questions that you have about leasing a Honda Fit. Thanks.

Car_man
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Comments

  • pcat1pcat1 Posts: 3
    I do have a question. I am thinking about leasing a Fit for 60 months, only to get the payment to $218. The salesman said he would put in writing that I could get out of the lease after three years.
    My main concern is my monthly payment.
    What do you think of this deal? It is for 12,000 miles per year, which is fine for me. $1000 down.
  • makabemakabe Posts: 47
    You need some more information to determine if this is a decent price or a complete rip-off (I'm leaning toward thinking it's a complete rip-off BTW). You need to know what the residual value of the car will be, the interest rate, and the price of the car. A common mistake people make when leasing is that they don't negotiate the price of the car, but rather only the lease payment. Dealers like to say "the bank is buying the car" so they don't like to disclose what the purchase price is, but it isn't a secret. Just make sure you are getting the car for MSRP--not the "kick me" price of $2500 over sticker. Next you need to see what the residual value of the car will. On a 5 year old Fit, this should not be very high. This is the price you will asked to pay to purchase the car at the end of the lease. Obviously, if the residual is higher, then you will have to make lower payments over the life of the lease, BUT, it will cost more to purchase the car outright. Last, find out the interest rate. A 1% difference on a Fit is $900 in payments. Any money you put down at the beginning of the lease is pure profit for the dealership, and goes straight into the dealer's pocket. On a car like the Fit, the dealer NEEDS you to put money down to offset trying to charge too much money for the car in the first place. To put it another way, if the dealer is selling the car to the bank (which in a lease is essentially what they are doing), they can not sell it for $1000 over MSRP, so they get you to put in the $1000, and sell the car to the bank for MSRP, and you make all the payments. Don't you just love leases? Lastly, a five year lease is way too long. I understand wanting to get a certain payment, but with a lease, that payment is fiction because you still have to decide to "buy" the car at the end of the lease and that means a new loan.

    Bottom line: get the price of the car, interest rate and residual value and we'll then be able to tell what kind of deal this is.
  • pcat1pcat1 Posts: 3
    price of car: $15,200 plus tax, title and lic
    interest: approx. 4.5%
    couldn't give me the residual, he said until we work the contract up.
  • johnnyvjjohnnyvj Posts: 112
    Don't SIGN anything until he discloses the residual and anything else you want to know.

    If he's very reluctant to do so, that's a BAD sign and you should get out ASAP. :(
  • makabemakabe Posts: 47
    Based on your numbers, and assuming $1000 down, the residual should be no more than $5391. (15200+tax, lic, title-$1000=$16000 financed) If it is more than that, then they are either charging you higher interest or not applying your down payment properly or charging more for the car. One other important thing to note: if you don't exercise your option to buy at the end of the lease, you walk away from any equity you may have in the vehicle. If you do decide to buy at lease end, you'll still owe $5391.

    Leases are really tricky--you can get totally screwed at lease end with nickel and dime charges. Be very, very careful.
  • pcat1pcat1 Posts: 3
    Ok. I was also thinking maybe I should purchase, since I am going for a 60 month lease, it might be better to purchase. And this web site has the MSRP for the Fit as $14650. He is quoting $15,200. Should I make him come down the MSRP price, whether I buy or lease?
  • makabemakabe Posts: 47
    His price is MSRP + $550 delivery = $15200. Delivery is a totally standard charge. Documentation fees however are not standard and range from $50 to $500. Go for it. My gut tells me they are going to try and stick it to you on the interest rate--I've not seen lower than 5.5% on loans lately.
  • rjw1rjw1 Posts: 4
    I am hoping to do a 36 mo lease on a FIT sport AT for 15k miles/year.

    Does anyone know what the top tier money factor should be for the FIT?
  • Lease a car? Best advice: DON'T.
  • jimmy5150jimmy5150 Posts: 30
    Why?

    Cars are tools. Use them and lose them.

    If you purchase cars every few years, only to trade them in and "break even" or lose a grand here or there, a lease payment that's $100 a month lower than the purchase payment, wil save you $3600 over 3 years.

    Will you have $3600 of equity in a car after 3 years....probably not.

    Don't go over the miles. Don't have an unusual amount of wear and tear. Don't have any thoughts of bailing on the lease before its termination date.

    Leasing works very well for some people...it can make a lot of sense if you're looking to minimize cash flow to have a desired vehcile.

    Cars are a depreciating asset, unless its a Shelby Cobra.
  • amrieamrie Posts: 1
    One dealer I'm negotiating with said that the 12K residual values for the Fit Sport AT are 36=$9749, 48=$8095. These are through Honda Finance, I think.
  • flightnurseflightnurse at 35K feetPosts: 1,524
    I stopped by one of the local Honda Dealers to look at the Fit, liked what I saw... Spoke to the Finance Manager (that is what I was told) about leasing a Fit Sport not too sure if i want to the Auto or Manuel. My average Credit score is 622, I'm rebuilding, haven't been late on any payments for 2+ yrs, all but student loans are paid off, and they are $150/m, I was wondering if Honda would finance me in a lease?? I'm looking for the lowest payment for 3 yrs in a car tht wont cost me much to use. What do you people think ??

    Tony :P
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,518
    Hi pcat1. Sixty months is way too long to lease a vehicle for. A lot can happen during the course of five years to make you need to get out of your vehicle and it is often very expensive to get out of leases early. Let's say that your family expands and you need a larger vehicle, or perhaps you just don't find the Fit comfortable after driving it for a while, or your commute changes causing you to go way over your mileage allowance, etc... You would be much better off leasing this car for 36 to 39 months. You absolutely cannot get out of a Honda Finance lease after three years for free. While it is possible that you would be able to get out of a lease early if your vehicle is worth significantly more than it would cost to purchase on the open market, this scenario is unlikely.

    Car_man
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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,518
    Greetings rjw1. As one would expect with a brand new model, Honda is not currently providing any sort of lease support on the Fit. As a result, if you were to lease one through Honda Finance right now, you would have to use its standard lease program. Its current buy rate standard lease money factor for 36 month leases is .00270 for consumers who qualify for its "Super Preferred" credit tier and pay a security deposit at lease signing. I believe that Honda Finance's current 36 month, 15,000 mile per year residual value for a base 2007 Fit is 57%.

    Car_man
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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,518
    Hi Tony. Even though your credit score is a little low, you probably will still be able to lease a new vehicle through Honda Finance. You won't qualify for its top credit tier, but a score of 622 would put you in its "Standard" aka third tier.

    Car_man
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  • psharpepsharpe Posts: 3
    Why not judge a Fit lease on the basis of $/month? All else equal, such as no money down, 12,000 miles per year, and 36 month term, same model Fit etc.

    If that is the case; $0 down, 36 months, 12,000 miles per year; what are you paying for a Sport Auto?

    Thanks,
    PWS
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,518
    Hi PWS. There are so many aspects of deals that dealers can manipulate, the easiest way to get a good deal on a lease is to negotiate the lowest possible selling price on the car that you want, just as if you were financing or paying cash for it, and then have the dealer calculate its lease payment using its captive finance company's buy rate lease money factor. Since the money factor and selling price are the two main profit centers for dealers on leases, negotiating this way almost assures consumers of getting a good deal.

    Car_man
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  • Hey Car_man,

    I wanted to get the MF and residuals for leasing the Honda Fit Sport model or the Fit Base model, with automatic transmission.

    I'm in Houston, TX and would need a lease for 24mths, with 15,000 miles/year.

    Thanks
    MrCheap666
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,518
    Hello MrCheap666. Honda is not currently providing any sort of lease support on the Fit. As a result, if you were to lease one through Honda Finance right now you would have to use its standard lease money factors. Honda Finance's current buy rate standard lease money factor for 24 month leases is an unattractive .00398. This is equivalent to an interest rate of around 9.6%. You would be much better off leasing this car for 36 months. Its buy rate standard factor for that term is a much more reasonable .00293. Honda Finance's 24 and 36 month, 15,000 mile per year residual values for the '07 Fit are currently 64% and 56%, respectively.

    Car_man
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  • bmb33bmb33 Posts: 1
    hi

    I am also considering to lease a honda fit because I might need a car for no more than two years. with information on the internet and different suggestions from friends, I am now so confused. Which way is better, to lease one or to buy one then sell it? Is lease kind of similar to having a car loan? Thank you for your help.
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