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Honda S2000 Lease Questions

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  • tac379tac379 Posts: 6
    I just went to drive an S2000. 2006 Silverstone, all the options, $34,600 on the sticker. I got them down to $350 a month, $1300 total out of pocket on a 3 year lease, 12K/year. They said 57% residual and .000659 money factor and that they were doing an "invoice deal". After doing some calculations, I figure if it was based on invoice (according to edmunds) that I should be able to have it for $350/mo, $0 out of pocket.

    My question is, is that too good of a deal to walk away from? Or has anyone heard of these cars actually selling for below invoice, since they are in the last year of a 7 year model run.
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hi tac379. Honda Finance's current buy rate lease money factor for a 36 month lease of a 2006 S2000 is .00059 for consumers who qualify for its "Super Preferred" credit tier and pay a security deposit at lease signing. If you are able to lease a car with a capitalized cost that is equal to its dealer invoice and this money factor you are getting a very good deal.

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  • dwynnedwynne Posts: 4,018
    $360 + tax or without?

    I pay less than that for my lease on the 05 and I put nothing into the lease except first month's payment, IIRC.

    I would not not pay so much into a cap cost reduction to lower the payment. Pay the negative equity and maybe the first month's payment and that is about all. In the event of a total loss on the car you insurance will pay off Honda and give you nothing (for your $2,860 out of pocket).

    I still would not do a 48 month lease, but that is just me.

    Dennis
  • gdr1gdr1 Posts: 6
    I am ready to lease an '07 S2000. The dealer has quoted a purchase price of $30,838 (Edmunds shows this as invoice) plus $595 Destination - total 31,433. His quote on a 36mo lease with 12k miles per year is 508 (plus tax). DMV is only payment at signing. Can you help me evaluate this offer?
  • Hi gdr1. Dealer invoice is an excellent price for a Honda S2000. I would be happy to use Honda Finance's current lease program to estimate what this car's monthly payment should be so you can compare what I come up with to the payment that you were quoted. However in order for me to do so I need you to provide me with this car's full MSRP. Let me know and I'll crunch some numbers for you.

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  • gdr1gdr1 Posts: 6
    thanks car man, in the meantime my wonderful wife decided that the S2000 was too claustrophobic with the top up and I have been instructed to lease a Boxter S. I will post there for your help.
  • ysg3ysg3 Posts: 1
    Car Man:

    I really would like an S2000 but will be the first to admit it is at the top end of my price range with the #'s that I am currently seeing... That being said i do not mind a lightly used car that would afford some better lease payments...Additionally, Swapalease has had some attractive #'s in the 380's that are in my price range, but anything in the high 4's with money down is way too high, and those are the #'s i am seeing right now... Swap a lease is difficult and i havent had much response on their wiht people who are posting their cars (seems very odd to me).

    Anyway, the purpose of this message is to see if it u think it is possible to negotiate low 400-low 4's on a lease, or if i could get an 04' or newer on a buy or a lease for 380-420... My research thus far has concluded that other than swapalease this is not really possible... Please let me know what ideas you have for someone in my position (if any).

    Thanks
  • dwynnedwynne Posts: 4,018
    The new S2000 lease deal is less 2% effective interest and you should be able to lease the car for invoice or a little less. If THOSE numbers are too high for you, then you either can't afford a new S or you would not be likely to be approved to lease one.

    You can lease a used car as long as it is within a few years of new. It will have to be inspected first ($100 or so fee) and may make the payments where you can live with them. You can find your own car, make your best deal, then do the lease via www.leasecompare.com . You can go there now to get lease quotes and see payments. Note that while the cap cost will be less with a used S, the money factor will be a lot more than the Honda promo rate - so your payment may not be that much lower.

    Also note that they usually list the base rental on the swap/trade lease sites and in most states you have to add sales tax to the payment. So a $350 a month lease may be $374.50 per month if you live in a 7% tax state.

    Dennis
  • No problem, gdr1. Man I wish that someone would instruct me to lease a Boxster ;) .

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  • Hi ysg3. I have never personally used swap-a-lease, but you're right it does seem odd that someone would go through the effort and expense to put their car or truck up there and then not even bother to respond to inquiries.

    I'm not sure what the lease payment on an S2000 would be like right now off of the top of my head. Let's crunch some numbers and find out. According to my calculations, if you were to lease a 2007 Honda S2000 that has an MSRP of $34,845 and a selling price of $31,933 ($500 over invoice) through Honda Finance right now for 36 months with 12,000 miles per year, your zero down, pre-tax monthly payment would be around $469. The payment for otherwise identical 39 and 48 month leases would be around $460 and $431. Unfortunately, once sales tax is added in, you are going to be well over $400 per month for all of these terms.

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  • What monthly payment should I expect with these numbers (lease)? I don't trust my math. :)

    Also, is destination charge included on a lease or just a purchase? the Selling Price includes the destination charge.

    MSRP: $34,845
    Selling Price: $30,500
    Money Factor: .0025 (6%)
    Residual Value: 52% (based on USAA, I'm finding 57% posted here)
    Down: $2000 cash + $1000 from trade-in
    Term: 36 Months
    Sales Tax: 6.25%
    Mileage: 12k/year
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hi accelerator. The money factor and residual value that you posted are different than Honda Finance's current program for this car. Its current buy rate lease money factor and residual value for a 36 month lease of a 2007 Honda S2000 with 12,000 miles per year are .00280 and 58%, respectively. Using these numbers, an MSRP of $34,845, and a selling price of $30,500 I estimate that this car's zero down, pre-tax monthly payment should be around $428. I see that you are considering making a $3,000 down payment on this car. I always advise consumers against making down payments on leased vehicles. Those who do risk losing them if their vehicle is totaled in an accident or stolen and never recovered. If you were to make a $3,000 capitalized cost reduction, it would drop the monthly payment for an otherwise identical lease to around $337.

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  • acceleratoraccelerator Posts: 136
    My math was good (www.leaseguide.com has a great lease calculator) as that is approx what I came up with, too. After rethinking about the down payment, I would have to say you make a very good point. I think I'll invest the $3000 instead. :)

    I have the lease quote worksheet in front of me but the sales persons hemed and hawed when I started asking questions about the numbers (numbers are below). I started feeling uneasy so I left. I have a spotless trade-in which I owe $18000 and they offered $16,500 (a full $2000 lower than a car in fair condition according to KBB and various other resources I checked).

    MSRP: $34,845
    Residual Adds (W): --
    Residual Value %: 55% <-- did they rob me here?</i>
    Residual Value ($): $19,167.75
    Capitalized Cost: $29,995
    Term: 36
    Lease Money Factor: .00288
    Customer Cash Down: $1943.00
    Rebates: --
    Total Trade (w): $16,500.00
    Total Add Caps (w): $774.30 <--- what is that and where did this come from?</i>
    Cash Cap Reduction: $1454.96 <--- what is this?</i>
    Adjusted Cap Cost: $31,483.03 <--- according to Honda, I had approx $1500 negative equity</i>
    Total Sales Tax: $168.69
    Base Monthly Rental: $488.04
    Security Deposit: $0
    Ttl Annual Fes (w): --
    ttl Initial Fees (w): --
    Amount Due at Start: $1943.00
    Ttl Working Cash: $1943.00
    One Pay Amount: --
    Total Monthly Payment: $488.04

    Was I smart to walk away or is this a fair deal, assuming trade-in value truly was fair?
  • dwynnedwynne Posts: 4,018
    Sounds like the dealer was not using Honda Finance for your lease. The residual should be 58% for a 36/36k lease from AHFC. The dealer can't change it, your credit rating can't change it, so it must not be a lease from AHFC.

    The rate they quote is also over the AHFC rate, but that could have been dealer mark-up (extra profit) OR due to your credit tier. Most likely is that this is not a AHFC lease.

    They are having you put down $1,943 - $488.04 of that is the first payment, the other $1,454.96 is the "cash cap reduction" - to reduce the lease amount/lower the payment. The "total add caps" is probably the lease acquisition fee (I think that is $595 for a AHFC lease), title, tags, "doc fee", etc.

    Since this does not appear to be an AHFC lease, then the amounts may vary.

    Looks like the dealer picked the lease deal that made THEM the most money and not made YOU the best payment.

    If you check over at http://www.leasecompare.com they will do the S for about the same residual and for 0.000258 MF (a tier credit). So if you wanted to use them, you just pick a car and make your deal, then they buy the car from the dealer and lease it to you. I have done that a couple of time with them with nice results.

    My S lease is at a MUCH lower, captive AHFC rate. Will they do that again? I would say the odds are yes. We are able to buy these cars for less than invoice price because Honda and the dealers can't sell them. So I took advantage of a really cheap MF on my 05 S lease a couple of years back so I could replace my 01 S with a brand new one "for cheap".

    If I were you, I would wait and see what AHFC does for lease specials in the next few months while you work on getting the negative equity out of your current car. Then if they run a special you can get a much, much lower payment and in any case will not have to pay anything down nor roll any negative equity into the new car.

    I would get the S somehow, I have sure loved mine :D

    Dennis
  • acceleratoraccelerator Posts: 136
    Thank you thank you thank you. The weather here in North TX is now hovering around 60-75, perfect for convertible weather and I was going to take the plunge. I was surprised that the dealer wasn't willing to work with me much as they have 9 new S's on the lot and 2 used... That seems to me that is a lot of inventory to carry for such a such a small market niche. Anyway, I didn't think of asking about WHO they were using to lease through, I just assumed it was Honda. Explains why they weren't answering my questions clearly.

    As for the S, I was estatic to find they were in production for one more year. I'm getting one this year! :)
  • dwynnedwynne Posts: 4,018
    I would check with other dealers, the S has become a REAL slow seller in recent years and most every dealer should have some on hand. But even if they do and gave you the Honda rate, it will still be a lot more than the "lease specials" they have had in the past (and more than the rate you can get at Leasecompare) - so you might wait another month or two to see if the lease specials come back on it. I would have to go check, but it seems the rate was just under either 1% or 2% at one time - which is really low.

    I would not mind trading my 05 for a new 07, since mine does not have stability control. If I could get a deal like I got last time, I would. I got the 05 S for under invoice, they gave me what I wanted for my 01 S, and I did the cheap lease deal. If they bring back the cheap lease deal, I will see if I can talk the dealer into giving me the buyout (or more) on the 05 and swap it for an 07 :D

    It was sunny and mid-70's 2 days this week and you know I was in the S, top down driving and lunch (for a LONG lunch) and all the way home. My wife and I went driving after work last night for several hours - we had to run the heat a bit after sundown but kept the top down. Sweet stuff. We both like the S (either of them) better than the C5 'vette convertible I had before - which is saying something.

    Dennis
  • acceleratoraccelerator Posts: 136
    Is the S your daily driver or a "weekend" car? The S would be my daily driver. I occassionally have to go to the grocery store and run small errands... and the little space is my ONLY hesitation. Today it is 84 (and you can feel every degree out there!) and I wonder if I already had the S, would I have had the top up or down. In my current vehicle, the windows were up and the A/C on :blush: but then again, this car isn't the S. :)

    If you think about it and you see the lease specials you spoke about, please post something here and I'll continue to monitor this thread... I just really don't want to miss out on a great car or deal.
  • dwynnedwynne Posts: 4,018
    The S is the "nice weather car" - I normally only drive it when I can put the top down. Today and Tuesday they are calling for mid-70s and sun so I am in it - though it is too cold (for me) in the mornings to drive IN to work top down :D

    I looked in my Palm Pilot in my "Lease-It!" saved calculations and the lease special from 2 years ago was 0.00082 MF or 1.968%. Quite a bit lower than the current, non-special, offer.

    If you just check the special deals on the Honda cars web page they will have the S2000 special posted - if they have one. Currently, there is nothing.

    Dennis
  • acceleratoraccelerator Posts: 136
    I'll keep my eyes open, thanks again!
  • I have been checking out Honda's website every week waiting for their S lease special. I use to have an '05 S and traded it in last year for an Acura TL. Now I miss it so bad I am ready to get an '07. Their current lease specials (S not included) end 4/30/07. Does anyone know if the S will have a lease special in May or June? I thought I remembered they had one last year around May or June???
  • acceleratoraccelerator Posts: 136
    Here in Texas, there has not been any lease specials (announced at least) for 2007. I'm looking and waiting, too. :) In the meantime, I'm seeing a build-up of inventory in many of the dealerships in the area so I'm hoping they are preparing for the special soon.
  • The local dealership here has 5 new S2K's on the lot, thats the most I have ever seen, so I hope Honda's lease special comes soon.... :)

    What is the minimum FICO score to qualify for Honda's super preferred tier? I'm sure we are fine, ours is about 750, but was wondering what the minimum is if anyone knows.
  • dwynnedwynne Posts: 4,018
    I swapped my 01 S for a new 05 S in June a couple years ago, IIRC.

    Honda normally changes the deals once per month - actually just after the first of the month. The old deals will expire on the at the end of the month or the first Monday of the new month (if the month ends Fri-Sun).

    So NORMALLY the current deals would run out on Monday, April 2 - but the current lease and loan deals and running through the end of April - which is on a Monday, the 30th.

    They could add or change a deal at any time, but my GUESS would be you would see something at the start of of the month or not at all. One exception would be for holidays, but "who knows" for sure?

    I always find it useful to track the sales numbers when thinking/waiting on a deal. You can get them online many places, like hondanews.com.

    Here are the latest (Feb 07) numbers for the S2000:

    Feb 07 Sales: 234
    Feb 06 Sales: 439
    Change: -46.7%

    YTD 07 (Jan+Feb) Sales: 452
    YTD 06 (Jan+Feb) Sales: 835
    Change: -47.0%


    So you can see sales hurl - they do for the S in general and for sure during the winter months, but they are running about 1/2 of the sales last year (which were terrible).
    I would predict based on this cheap lease deals and/or dealer money to move them out.

    If you look back at Feb 04 the numbers were 591/1073 and Feb 05 they were 542/863 - so you can see that this year is REALLY down.

    Contrast that with the Accord - they have been doing $750 cash to dealer AND cheap leases for the last couple of months. Accord sales for Feb 07 were up 20% over last year and YTD 07 was up 16%. What do you bet happened when Honda saw those numbers at the start of March? If you guessed no more $750 cash to dealer and no more really cheap lease deals - you would be correct.

    Dennis
  • dwynnedwynne Posts: 4,018
    What is the minimum FICO score to qualify for Honda's super preferred tier? I'm sure we are fine, ours is about 750, but was wondering what the minimum is if anyone knows.

    I heard 710, but with most banks 700 and up is considered "A".

    Dennis
  • Thanks for all the good info, I'll keep checking Honda.com for updates. Sales look horrible based on the numbers you showed, so hopefully that will be in my favor soon.
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hi rd1ofakind. Honda made some revisions to its incentive program for the month of April. Unfortunately it did not introduce a special lease on the 2007 S2000, but it did introduce $2,000 dealer cash on it. Make sure to use this cash to your advantage when negotiating the capitalized cost of the S2000 that you are interested in. Honda was running a special lease on the 2006 S2000 in May 2006. It is difficult to say whether it will run a similar program this May or just stick with the large dealer cash allowance that it just introduced.

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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hey rd1ofakind. Your score definitely is high enough that you will have no trouble qualifying for Honda's best rates. Consumers need a 710 credit score or better to qualify for Honda Finance's "Super Preferred" credit tier.

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  • acceleratoraccelerator Posts: 136
    Question 1
    If:
    I am leasing the S
    My credit score is 710+
    Leasing through the dealership
    Do I have to accept the leasing/finance they offer or can I request a AHFC if AHFC is a better choice for me? I guess a better way to state this is the Manufacturer to Dealer incentive contingent on using a specific leasing/finance company? On post 43, I quoted some numbers the dealer gave me but the residual value was lower through this leasing company (not AHFC) so my payments were higher. If I go through AHFC, the residual value is higher, thus payments are lower.

    Question 2:
    After 3 years, if I still love this car and decide to keep it, would the lower residual value be better for me down the road or is the higher residual value still better? I'd have to finance the remaining balance. I don't typically hang on to a car more then 3 years (which is why leasing works for me) but I suspect this car could change that.
  • dwynnedwynne Posts: 4,018
    Sure, you can ask the dealer's finance guy to look at other lease offers - assuming they do business with other lease banks. You will get a mix of money factors and residuals (the residuals from 3rd party banks will likely all be the same since most use the same residual source). You can also check with the folks at LeaseCompare - you can get a free, instant online lease quote from them and see how that stacks up the the dealer's offerings. If they have a better deal, they buy the car from the dealer at your negotiated price and lease it to you.

    Note that you and I can't lease from a lease bank direct (say you hear USBank has a great lease rate on the S2000 you can't go to them and get it) - we have to go through a lease broker or car dealer. My very first lease car the dealer was super (I worked direct with the dealership manager) and he had a program called "LeaseTrack" (I think) and he could bring up the lease offers on any car, any credit rating, and term from a bunch of banks - then give me the one that was the best deal (much better than the captive lease bank at that time). Quite often what the dealer will offer you is what will make THEM the most money, not what will make you the best deal :(

    Question 2 is a good question and it all depends on the rates and residual values (and what the finance rate 3 year in the future will be). In general, you want the lowest possible rate with a realistic residual value. One problem with high residuals is that without GAP coverage the demand for pay out to the lease bank in the event of a loss may exceed the "book value" that insurance is willing to pay. But that is "in general" - you have to look at what you can get now and guess about the future and run the numbers to see how it works out.

    If it were me, the $2,000 incentive would be nice - but the lease rate is pretty high (leasecompare can do better, last time I checked) - but you might wait one more month and see if Honda has a promo rate for May on the S2000. A 0.9% or 1.9% MF can make for a sweet lease deal. When I have some time I will try to compare the current lease with $2k more off the car VS a cheap rate deal and see how it stacks up for sure....

    Dennis
  • acceleratoraccelerator Posts: 136
    Hey Dwynne, I looked at that site last time you posted it but I couldn't get it to come up but it came up today and you were right. I'm glad I tried it again.

    Are the chances of a lower lease rate AND the incentive likely? If I waited, it would help with my negative equity of a $1000 (squeezing in an extra payment).

    As for your advice about Question 2, that is brilliant! I think I'm too close to the situation and just want the car so I'm not thinking clearly. :) Thanks for bringing me back down to earth. I'm sincere, not being a smart alec
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