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2013 and earlier-Honda Accord Lease Questions
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Unless dealers are getting $1500 from Honda, uh yes. You're being unrealistic. You realize that the 1400 diff from your beat offer is only like $40 a month?
Now I don't even know what the current dealer incentives are, but I do know that dealers (every make) are in the red on new car sales nationally for many years. That's the cost they pay for that big sign out front giving them the opportunity to sell used cars (which they do profit on), service, maintain and perform warranty repairs. The only way you are gonna get $1500 below invoice is with manufacturer subsidies. You’re saying the current market is $1500 below invoice? Does Honda currently have $1500 dealer cash on Accords? If they do then of course I would expect most of that in my pocket.
My new Honda Accord every 2 - 3 years has always given me a dependable and comfortable vehicle to get to and from work at an extremely reasonably price. Enabling me to pay those outrageous other fixed monthly expenses.
Just wanted to share this.
Come into the Honda prices paid forum you need to educate yourself on pricing. Most 2013 Accords are selling between 800 below invoice on the low end to as high as 1700 below invoice price. plus another 500 dollar flex cash incentive to finance thru honda if dealers have it to give.
23 Telluride SX-P X-Line, 23 Camry XSE
I know he says zero due at signing (which would mean 35 payments at $315), but I think he meant nothing else paid at signing except for the first month's payment because his lease is coming to 36 payments a $315 including tax just as he said.
So here it is, i was at Honda today and i got the following quote on an Accord LX
The problem is i don't know what capitalized cost they used. So it's difficult to know whether i'd have some leverage there or not.
So with a residual of $13729
And tier 1 money factor (again not sure what rate they used, he just told me tier 1)
The offer is $289 + taxes... which would end up around $320/month. I am really targeting $300 tax included and with $0 down.
Do i have any leverage? Maybe bump in the residual a bit?
I'm glad you found this forum because now you will be armed with the info you need to get a great deal and not overpay.
By the way - residual is fixed by the manufacturer and can't be changed - it varies by terms and mileage of the lease.
Bill G
2017 Accord Sport CVT Mod Steel Metallic
So it sounds like my only bet is try a cost reduction
You're picking this stuff up fast - you'll do well.
Bill
2017 Accord Sport CVT Mod Steel Metallic
Can you please tell me what the MF and residual are for a 2013 Accord Sport CVT with 15k miles/yr? I've been getting different #'s at different dealers. Not sure who to believe anymore.
Thanks.
I crunched the numbers with their 0.00075 money factor for tier 1 and i get awfully close to that $289 + tax deal he quoted me. The difference may be in the dealer fees they charge.
So i assume i can get that down a bit. I have seen some EX get out in this forum for about that amount (325 tax in)
He did give me a quote on an EX per my request and i think it's not bad but i want to know for sure.
Vehicle price: $23800
Taxes: $1600
DMV/Misc fees : $470
Lender Fees: $595
Total: $26465
Cash down: $600
Adj Cap Cost: 25865
Residual MSRP: 26195
Residual at 59% : 15455
Money Factor: 0.00075
Payment: 320 tax included.
My target being around $300, they came really close. I don't mind giving $600 down as it's not that much of a deal should something happen to the car. It's not like i am giving $1995 down.
Now, the Vehicle price looks good at 23800. It's basically invoice price per Edmunds and KBB. However, i find the Misc and Lender fees make the Cap cost a bit high which translates to that $320 instead of the 300-310 range that i had calculated.
Any ideas? I feel i don't have much wiggle room on the sticker price and residual and MF are pretty much fixed items. I can only play on the fees?
Check the prices paid forum to see what dealers in your area are selling for 1k or lower. Your wiggle room is on that sticker price and doc fee' charge.
23 Telluride SX-P X-Line, 23 Camry XSE
Their price is $23800 now the end result monthly may be high on the monthly but i feel my wiggle room is not on the sticker price... unless we want to go way below invoice which i am not sure they would do.
Accord Sedan EX-L 4 CYL no nav
12,000 miles
Accord Sedan EX-L V6 no nav
I was quoted today with a money factor of .00181?? For the 4 Cyl
Thanks
Bank Fee $595
DMV $150 (estimated)
First Payment $239
Total $984 (Dealer is asking $1236)
Overall it doesn't seem like a great deal. i think you can do better.
Personally i would try to roll everything into the payment not pay anything upfront. I leased an EX in July but with different lease program (24K miles a year) and I had everything rolled into the payment even the first payment. I know some people like to pay the first payment upfront that's ok too but shoot for everything else rolled into the payment. if anything happens to the car insurance won't reimburse you on anything you have paid upfront.
for example if you pay $1236 upfront and you total the car in the first month, insurance won't cover the 1236 and you haven't even used the car yet.
now the question is what's a great deal. it depends on who you ask but personally if i was leasing LX 12/36 I would tell them roll everything into the payment except for the first payment upfront (assuming 8% tax). I would shoot for $220-230
Your lease payment is a mathematical formula using the residual, money factor and capitalized cost of the car (sales price/doc fees/DMV fees and $595 lease inception fee assuming you put them all in the lease as advised). You need to negotiate the sales price/doc fee amount as if you are purchasing so you can get the capitalized cost as low as possible. Take a look at the Prices Paid forum for pricing in your area and negotiating advice.
Would someone care to take a look at my recent deal?
I turning in my lease early (CRV), with 7 payments left (~$2100), and got a new lease at $340/mo.
Accord Sport '13, No money down, 12k miles/year, Sticker price of about $24980. I'm in northern NJ, close to NY.
Please let me know if you need more information.
Thank you!
- did you carry positive or negative equity from old to new lease.
- net selling price of new vehicle (incl dest, dealer doc fee and lease inception fee)
- did you pay any money at signing
- length of lease in time and miles
- money factor and residual percentage
- sales tax and how it is applied to a lease in your state
- DMV fees and any other fees involved in the transaction
All of these items should be included in the lease contract you agreed to.
Bill G
2017 Accord Sport CVT Mod Steel Metallic
i said go for 220-230 because i have seen advertised. i haven't worked the numbers for this lease program. i agree with you...
"your lease payment is a mathematical formula using the residual, money factor and capitalized cost of the car (sales price/doc fees/DMV fees and $595 lease inception fee assuming you put them all in the lease as advised). You need to negotiate the sales price/doc fee amount as if you are purchasing so you can get the capitalized cost as low as possible. Take a look at the Prices Paid forum for pricing in your area and negotiating advice."
Also, I had a question about how the $595 lease initiation fee gets applied. One dealer in NJ's internet quote listed the EX-L's cap costs as $595 less than their listed sale price for the car, so that when the lease initiation fee is included the car's cost is still the same as if you were buying. Is this normal? I assumed that the $595 was going to be an additional cost on top of whatever sale price I can negotiate. In other words, if I negotiate a sale price of $25,000, when they calculate the lease is it standard for it to be $25,595 or to stay at $25,000. Is this something I should be watching out for?
e.g in a simple calculation if the residual is 60% and MSRP is $30,000...take 60% times the $30000 = $18000 that's how much car would be worth at the end of lease. lets take it little further and assume you negotiated sale price of $25000, take 25000 (cap cost) minus 18000 your depreciation is 7000 amount you would pay part of you monthly payment calculation. 595 would go into your capitalizable cost 25595 but in many states 595 is not part of your tax calculation. it is true for NYS.
Here are my questions for this forum
Do most people who lease a vehicle have to go into the dealership to close the deal. forum guys who know how i buy will understand. alot of my deals are out of state buys.
i want to lease my next vehicle can i do it over the phone. Will dealers run my credit without me being present for the sale that day.
Here is another.. I live in NYC, I secure at great selling price with a dealership in lets say Maryland i asked him to run the numbers, money factor/ residual/ cap / miles etc. everything looks good. How do i proceed to close this deal by phone. Could i do a fax transaction like a car purchase.
Please advise......... i also want input from... Huskerfan5, and gmanusmc.
Curious to know your thoughts and tips on this subject.
Tks
23 Telluride SX-P X-Line, 23 Camry XSE
Once you agree on the monthly payment, the leasing company will check your credit. If everything checks out, ask that the buyers order be faxed to you, just like in a purchase except that you will note that there is a small section on it applicable to leases where the number of payments, payment amount, number of miles and total due at signing will be found.
When you actually pick up the car, you will execute the lease agreement instead of a bill of sale/ loan documents. The lease agreement should break out the cap cost and due at signing components but should agree with your buyers order. While a dealer in a neighboring state should be able to put everything into the lease, you may have to register the car yourself in NY so you would need to adjust your cap cost accordingly.
Gary
What I would add to Gary's comments is that folks who keep their cars for more than 3 years or so or drive alot of miles should just do a conventional purchase unless they plan to pay cash to buy the vehicle for the agreed to residual at lease end. If you finance the residual at lease end, you are essentially paying double interest on that amount of money. Example: If you lease an Accord EXL for a cap cost of 25k and residual of 15k, you would pay $30 a month interest on a money factor of .00075 (25k + 15k x .00075). If you then purchase the vehicle at lease end and finance, you're paying interest again on the 15k.
I also advise folks who want to lease to try and choose a vehicle with the highest residual (holds its value) and a low money factor. These two things along with negotiating a great price for the vehicle will consistently get you a good lease payment. That's why Hondas are great vehicles to lease - you usually get all three of these components.
Leasing is just another financial method to pay for the use of a vehicle - the negotiation strategy differs very little from that of a conventional purchase.
Hope this long winded post and Gary's comments clear up some of the mystery of leasing for folks trying to work their way through this stuff.
Bill G
2017 Accord Sport CVT Mod Steel Metallic
Thanks Gary/ Bill ................... if i run into a problem i'll reach out.
23 Telluride SX-P X-Line, 23 Camry XSE
Interesting notes:
-The only items that aren't taxed are the DMV fees IF they are paid up front and not included in your monthly payments.
-NY requires all taxes up front, so if you want taxes rolled into your monthly payments then the dealership pays the tax up front and you are basically paying off a loan for that money each month. You are taxed on your total monthly payment, so your tax is being taxed.
For example, if your taxes are about $900 and DMV fees about $300, you can pay $1,200 up front or around $1,300 in your monthly payments. So paying tax and DMV up front will save you about $100 in New York.
If there are any New York leasing experts here, does my explanation sound right?
23 Telluride SX-P X-Line, 23 Camry XSE
I'd roll taxes into the lease as well.. It's no different than any other money that you finance.... it's taxed.
$900 in tax rolled in adds about $40-$50 to the total cost over 36 months....
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While I wish my skills and knowledge were compared with the likes of Tiger Woods and Steve Jobs, I appreciate your comments regarding Brian. While Brian has missed some putts while fretting about someone being taken advantage of by a dealer while he’s off-line and out on the golf course, I can go on vacation knowing that people are getting good advice from you ( I just blame my putter for my missed putts).
Just want to add to your advice regarding the lease vs buy decision. Readers should know that there are rare instances where the lease terms are so favorable that the present value of the lease payments and residual is less than the purchase price. In that case, it makes sense to lease the car and buy it at lease end, assuming, of course, that the car is worth the residual. I know the Camry money factor was recently .00001. I don’t know if they had any special purchase incentives not available on the lease but that is an example where I would have done the math to see if leasing was the best way to go even if I was planning to hold onto the car.
That's why I pay close attention to your posts - you've got all the bases covered.
Thanks, Bill
2017 Accord Sport CVT Mod Steel Metallic
btw, this is not the just the opinion of a frequent poster to this forum, but if Edmunds.com existed 30 years ago when I was maintaining my continuing profession education requirements and paying my registration fees, my user name would have been huskerfan5, CPA.
You made the following comment...
"If you finance the residual at lease end, you are essentially paying double interest on that amount of money. Example: If you lease an Accord EXL for a cap cost of 25k and residual of 15k, you would pay $30 a month interest on a money factor of .00075 (25k + 15k x .00075). If you then purchase the vehicle at lease end and finance, you're paying interest again on the 15k."
Actually, that's not true because you're really paying interest on the unpaid lease balance. Interest is levied on the depreciated balance (i.e, outstanding lease balance) beginning with the adjusted captialized cost and terminating at the resididual vaue. I think where you may be getting hung up is with the expression...
.00075 (25k + 15k x .00075).
which is inaccurate to start with. It should be...
.00075 (25k + 15k)
which yields the interest on the average unpaid balance. I think you know the correct formula but forgot to distribute 0.00075 to the 25k as well. I also believe that you wanted to illustrate that interest is levied on the residual as follows...
0.00075 x 25k + 0.00075 x 15k
But, that line of thinking isn't quite right. Theoreticially, the formula for the interest component is ...
(interest rate/12) (adj. cap + residual value)/2.
This simplifies to...
(interest rate/24) (adj. cap + residual value)
where (interest rate/24) is just the money factor (interest rate is expressed as a decimal instead of a percent).
So, given .00075 (25k + 15k), it's understandable why a lot of people mistakenly believe that interst is levied on the residual... it's not. Again, it's levied on the outstand lease balance which starts with the adj. cap cost and ends at the residual value. So, those that execute a residual buyout, are, indeed, picking up where the lease left off. That is, the lease ends at the residual and the buyout begins at the residual.
You may want to check out the following lease amortization schedule...
https://autoleasegeek.com/wp-content/uploads/2010/12/sample-lease-amortization-s- chedule.pdf
Hope this helps.
John
TheAutoLeaseGeek
Why would the residual even need to be in the formula?
You can do the short version if you want.
Thanks, Bill
2017 Accord Sport CVT Mod Steel Metallic
Yup, I thought so.
A lease is amortized in much the same way that a loan is amortized. You begin by computing interest on the adlj. cap less the first payment. The interest is deducted from the base payment to determine the amount of principle to be deducted from the previously lease balance. This process continues for the entire term of the lease. The ending lease balance is the the residual value. At that point, you'll either return, trade, or buy the car for the amount of the residual. If you buy, you'll have to pay tax on the residual which can be financed.
But, you never pay interest on the residual because the lease balance, which always exceeds the residual, is reduced each month until the final balance is reached. This balance is the residual. Now, if you extended the lease for an additional 3 months beyond say, a 36 month lease for example, then some fund providers may continue to amortize the lease beyond the residual so that after 39 months, you could buy the car for something less than the residual. This is the only situation in which one would pay interest on the residual. I think if you click on the link and look at the lease amortization schedule that I provided in the earlier post, you'll see what I'm talking about.
Am I making sense?
John
Thanks for the help,
Bill
2017 Accord Sport CVT Mod Steel Metallic
Thanks, Bill
Sorry I opened Pandora's box
2017 Accord Sport CVT Mod Steel Metallic
Think of it as a loan.. where you borrow the CAP cost, then pay the principal down to the residual amount... While a loan wouldn't have equal finance charges throughout, a lease does (which makes it easier to calculate)..
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Because the formula...
MF x (Adj. Cap + Residual) reflects interest on the estimated average lease balance through the entire term. The expression...
(int rate/12) x (adj cap + residual)/2 is equivalent to the above formula. The term...
(adj cap + residual)/2 reflects the estimated average lease balance while the term...
(int rate/12) reflects an estimate of the monthly interest rate.
Remember that the formula [money factor x 2400] that is often quoted only gives an estimate of the interest rate. It's very close but it's not exact.
John