Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!





Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

Have you recently tried to purchase a new vehicle after being out of the market for a while and found that prices were much higher than you expected? A reporter would like to talk to you; please reach out to [email protected] by 1/20 for more details.
Did you get a great deal? Let us know in the Values & Prices Paid section!
Meet your fellow owners in our Owners Clubs

Acura TSX Lease Questions

1343537394050

Comments

  • liz287liz287 Posts: 3
    This is what a dealer in FL. offered me on a TSX '10 a/t without nav.

    0 down 0 deposit 0 due at signing

    10k a year 381 with tax
    12k a year 401 with tax
    15k a year 421 with tax

    keep in mind that in a lease every $1,000 down lowers your payment by $27.00 each month.
  • xmjxxmjx Posts: 74
    Anyone have the residual, dealer cash and money factor for a 2010 auto, tech 4 cyl, 12k per year 3 year lease?
  • Hey jamesbond15. Honda Finance's current buy rate lease money factor and residual value for a 36 month lease of a 2010 TSX Tech and 12,000 miles per year are .00150 and 58%, respectively for consumers who qualify for its top aka "Super Preferred" credit tier.

    The residual value for a lease with only 10,000 miles per year is 1% higher.

    When negotiating your lease on this car, make sure to take advantage of the $1,000 cash incentive that is currently available on it.

    Car_man
    Host
    Prices Paid: Buying & Leasing Experiences Forum
  • Hello xmjx. Please see my previous post for the information that you're looking for.

    Car_man
    Host
    Prices Paid: Buying & Leasing Experiences Forum
  • devs6devs6 Posts: 11
    Car Man,

    Can you provide the numbers for a TSX base 4 cyl and 6 cyl 15k a year

    Thanks
  • hawker125hawker125 Posts: 5
    Are the cash incentives also applicable to the advertised lease specials? Thanks for all the great information!
  • Here you go, devs6. Honda Finance's June buy rate lease money factor and residual value for a 36 month lease of a 2010 TSX Base 4-cylinder with 15,000 miles per year are 00150 and 59%, respectively for consumers who go with a zero due at signing lease and quality for its top aka "Super Preferred" credit tier.

    The numbers for an otherwise identical lease of a 2010 TSX Base V6 are .00125 and 55%.

    When negotiating your lease, make sure to take advantage of the $750 dealer cash that is available on the base 4-cylinder and $1,250 that is available on the base V6.

    Car_man
    Host
    Prices Paid: Buying & Leasing Experiences Forum
  • You're very welcome, hawker125. Yes, Acura is providing dealer cash on the TSX that is compatible with its special lease program.

    The exact amount of cash varies by trim level. There's $750 on the '10 TSX 4-cyl. Base, $1,000 on the TSX 4-cyl. with Tech, $1,250 on the TSX V6 Base, and $1,500 on TSX V6 with Tech.

    Car_man
    Host
    Prices Paid: Buying & Leasing Experiences Forum
  • moetmoet Posts: 10
    I leased a 07 TSX with Tech (12k miles/yr) which is coming due. I was paying $345.55/mo (tax included) with $1500 down which had included 1st mo pmt, bank fee, doc fee, title etc.

    Today, i got quote on a 10 TSX with tech pkg:
    12k miles
    $399.70 Monthy Pmt (7% Tax included)
    Selling Price $29789 ($1300 below invoice which includes the $1000 incentive they giving)
    Residual 58%
    MF 0.0016
    Down Pmt: $1493 (which includes first month, dmv, bank fees)

    For 15k miles with $1520 down monthly pmt would be $419.

    What do you guys think? It looks like the price has increased on this car and they have also increased the interest rate.
  • delta737hdelta737h Posts: 626
    edited June 2010
    moet,

    You have provided the two most important pieces of information in any lease transaction: selling price and cost of money (i.e., money factor). The selling price looks great. However, check overstock at zag.com for competitive pricing in your area. If you qualify, make sure the 0.00160 money factor reflects the "buy rate" (i.e., the money factor with 0% reserves).

    The problem is that you have some missing information and so I can't evalute your deal. For instance, the 58% residual means nothing if I don't have the MSRP upon which the residual value is calculated. And so, having the residual value would be very helpful. Also, I don't know your state. Not all states levy sales tax on leases the same way. Some tax the payment streams (CA, PA); others tax the total payments (OH, NJ, NY); while others tax depreciation (CO). And, then, there are those that tax selling price (III).

    Also be advised that the $1,493 is not a down payment. It represents the amount paid upfront which you haven't itemized. What's the bank fee? DMV fee? Down payment means the same thing as cap reduction.

    If you can provide additional detail, I'll be able to evaluate.

    Hope this helps.

    John
  • bbbbluebbbblue Posts: 1
    Hi, please evaluate for me!
    Just got quoted selling price 29,986 for a TSX with Tech. For 15k miles they quoted me 429 with 2000k down. I'm new to leasing so I don't have any of the other pertinent numbers.
  • moetmoet Posts: 10
    John, thanks for getting back quick. I'm in NJ, the monthly payment includes tax. If i recall, the MSRP was around $33,400 or so. The $1493 includes 1st mo pmt, Doc fee $595, $220 title/registration, $250 bank fee then there was tire fee and some other fee i can't remember (don't have paper work in front of me). I made sure there was no cap reduction cost, so the numbers did add up to $1493.

    I guess it's a decent deal when comparing it to others on this site.....your thoughts?
  • delta737hdelta737h Posts: 626
    moet,

    Unfortunately, an estimate of the MSRP isn't going to help me. I need the exact figure; otherwise, I'm just guessing. It's crucial because the residual value is dependent upon it. In addition, all numbers provided should be to the penny; not rounded or ball park. In the interests of expediency, I suggest that you ask the dealer to email/FAX you or me the LEASE WORKSHEET. It can be emailed to me, if you prefer, at

    [email protected]

    This will tell me everything I want to know. Then, I can evaluate it intelligently. Also, I think the selling price can be reduced by $325.

    John
  • xmjxxmjx Posts: 74
    Do you expect the residual and money factor to change come July 1? Should I go lease one today or wait until Thursday? Thanks in advance!
  • au1994au1994 GAPosts: 1,644
    I have the same question. My guess (hope) is they extend it since it is a holiday weekend to drive traffic to the showroom.

    2019 Subaru Crosstrek Limited Venetian Red over Black
    2017 BMW X1 Jet Black over Mocha

  • Welcome bbbblue. Since you are new to leasing, you definitely should check out the following informative articles on the subject that are available here at Edmunds.com: 10 Steps to Leasing a New Car and Calculate Your Own Lease Payment.

    In short, the easiest way to get a good deal on a leased vehicle is to shop around for the lowest possible selling price and then have the dealer that you decide to go with calculate your vehicle's monthly payment using its buy rate lease money factor.

    Let's take a look at the selling price that you were quoted. The dealer invoice price for a 2010 Acura TSX 4-cylinder with Tech and an automatic transmission is $31,012. When we subtract the $1,000 dealer cash that is currently available on this model from that, it drops to right around $30,000. The selling price that you were quoted is just under that, which is a very good deal.

    Just make sure that the dealer uses Honda Finance's current buy rate lease money factor of .00160 for non-sign and drive and .00150 for sign and drive leases to customers who qualify for its top aka "Super Preferred" credit tier to calculate your monthly payment and you're in business.

    Car_man
    Host
    Prices Paid: Buying & Leasing Experiences Forum
  • Hi xmjx. Acura's June programs are scheduled to run through July 6th. Having said that, it is possible that it will introduce some enhancements today or tomorrow for the holiday weekend...I know that Honda just made an unscheduled enhancement to its finance rates for most models.

    I'll make some calls and see what I can find out. Please feel free to post a reminder in this discussion for me and I'll fill you in on what I have been able to find out.

    Car_man
    Host
    Prices Paid: Buying & Leasing Experiences Forum
  • xmjxxmjx Posts: 74
    Thank you so much for the info. Do you happen to know the money factor for a TL tech package, 36 months, 12K per year? I'm loving that car right now considering the $2250 in dealer cash. Let me know what info you find out. Thanks again. I'm looking to buy today or tomorrow.
  • verybeegverybeeg Posts: 19
    I live in NJ and am moving to PA for a new job in 2 weeks. I have to get the TSX by Tue to take advantage of the current lease deal. NJ taxes the value of the lease up front; PA taxes the monthly lease payments. This means, I'll be paying the tax for the 36 payments in NJ on Tue. Anyone knows whether PA will tax me again on the monthly payments when I move there in a few weeks? It can mean an extra $1000 over the 3 years of lease payments. Thanks.

    FYI: TSX no tech, $26,334, 61% residual, 12k, MF .00160
  • qbrozenqbrozen Posts: 26,688
    I don't know who told you that about leases in NJ, but its not true. You do pay the tax on the payment. You CAN pay it up front, probably the same in PA, but you don't HAVE to.

    '19 Ioniq plug-in, '10 Equinox LS; '08 Charger R/T Daytona; '67 Coronet R/T; '14 Town&Country Limited; '18 BMW X2. 50-car history and counting!

  • kyfdxkyfdx Posts: 142,272
    NJ taxes the total of the lease payments, right? I think the tax is paid upfront.. Yes, you can roll it into the CAP cost and pay it monthly, but the leasing bank pays the entire amount to the state, at the time of the lease. (Correct me if I'm wrong, please)...

    So, if you then moved to a state that collects it monthly, you may be subject to more tax (9%-10% in PA)..

    So, in this instance... Let's say you lease a car for $350/mo. in NJ.. The tax would be $882 (36 X $350 X 7%), making your new payment about $375 with tax included.. (But, the entire tax has been paid to the state).
    You then move to PA, which taxes your $375/mo. payment, making the new payment, $408.75 ($375 X 1.09).

    PA may give you credit for the $882 tax you paid in NJ, but I wouldn't bet on it.... If you have to do it this way, I'd definitely pay the $882 tax upfront in New Jersey... At least that way, you won't be paying tax on the tax when you move..

    Is there any way you can register the car in PA now? Do you have your new address?

    regards,
    kyfdx

    Did you get a good deal? Be sure to come back and share!

    Edmunds Moderator

  • delta737hdelta737h Posts: 626
    edited July 2010
    gbrozen,

    kyfdx is correct. However, NJ gives you two options:

    (1) pay tax on the sell price or;
    (2) pay tax on the sum of the taxable payments which may or may not equal the lease payment depending upon whether or not taxes are capped in the lease. Like Ohio, NJ forbids tax levied on tax.

    Because of residualized financing, it's always cheaper to select option (2). In either case, tax is due and payable upfront. Yes, the tax can be rolled into the lease where the fund provider pays the tax upfront on your behalf.

    Pa taxes only the payment receipts as they are received. I would check with the NJ Dept of revenue to see whether or not NJ and Pa have a reciprocity agreement regarding sales tax. As kyfdx indicated, Pa may issue a tax credit for taxes paid in NJ.

    John
  • paulvppaulvp Posts: 8
    sup , can anyone advise me on this offer . I was at acura dealer and i told dealer 4000 down with all fee included(dmv etc ) . The dealer gave an offer to pay $345 (tax included ) month for the tsx 4 cycl with tech pkg on 10000 miles per year . Please can someone give me a feedback about this offer . Does this offer sound too much ?

    Thanks ,
    Paul
  • nojusticenojustice Posts: 9
    edited July 2010
    This is the quote I received today for a 2010 4cyl BASE TSX as a Super Preferred Tier Customer and $0 Down:

    MSRP: $31,120
    Selling Price: $26,169
    15K Mile for 36mon
    Residual: 59%
    Money Factor: 0.00160
    Add to Cap cost I believe was: $1,335ish (incl: $595 aquisition fee, $399 doc fee and title/reg)
    Tax: 7% (NJ)
    Lease rate: $364.72/mon
  • delta737hdelta737h Posts: 626
    edited July 2010
    nojustice,

    There is absoluterly no justice in what you've described (please excuse my weak attempt at humor). Here's the deal...

    MSRP........................... 31,120.00
    Sell Price...................... 26,169.00
    Amts Financed.
    Acq Fee..................... 595.00 (taxable in NJ)
    Doc Fee..................... 399.00 (taxable in NJ)
    DMV/Gov Fees.......... 813.00 (non-taxable)
    NJ Sales Tax @7.00%... 799.70 (0.07 x 36 x 317.34)
    GROSS CAP............... 28,775.80
    Cap Reduction.............. 0.00
    ADJ CAP.................... 28,775.80
    Money Factor............. 0.00160
    Residual Factor......... 59%
    Residual Value......... 18,360.80 (Res. Factor x MSRP)
    Term......................... 36
    NJ Sales Tax Rate.... 7.00%
    Lease Payment....... 364.72
    Taxable Payment.... 317.34

    You need to confirm that the dealer or the fund provider is making the first payment and that it's not capitalized in the lease which is what I'm assuming as their national promo ad provides...

    2010 TSX 4-cylinder Featured Special Lease - Zero Due at Lease Signing
    $0 down payment, $0 security deposit, $0 first month's payment, $0 due at lease signing Excludes taxes, titles and fees. $370.00 a month for 35 months thereafter. For well-qualified buyers.FEATURED SPECIAL LEASE: Closed-end lease for 2010 TSX 5 Speed Automatic (Model CU2F6AJW) for $370.00 per month for 36 months with $0 capitalized cost reduction available to customers who qualify for the Acura Financial Services Super Preferred credit tier. Other rates/tiers are available under this offer. $0.00 due at lease signing ($0 first month's payment, $0 capitalized cost reduction and $0 security deposit; total net capitalized cost and base monthly payment does not include tax, license, title, registration, documentation fees, options, insurance and the like). Not all buyers may qualify. $0 due at lease signing offer requires dealer contribution, which could affect final negotiated transaction.

    Subject to limited availability. From May 28, 2010 through July 6, 2010, to approved lessees by Acura Financial Services. Closed end lease for 2010 TSX 5 Speed Automatic (Model CU2F6AJW), for well qualified lessees. Not all lessees will qualify. Higher lease rates apply for lessees with lower credit ratings. MSRP $30,170.00 (includes destination). Net capitalized cost $29,426.30. Net capitalized cost includes $595 acquisition fee. Dealer contribution may vary and could affect actual lease payment. Taxes, license, title fees, options and insurance extra. Total monthly payments $12,950.00. Option to purchase at lease end $18,705.40. Lessee responsible for maintenance, excessive wear/tear and 15 cents/mi. over 10,000 miles/year for vehicles with MSRP less than $30,000, but for vehicles with MSRP of $30,000 or more, mileage cost is 20 cents/mi. over 10,000 miles/year. See dealer for complete details.
    closeprint


    If, as the ad suggests, the dealer/fund provider makes the 1st payment, then my financial forensics investigation indicates that there is no way possible that only $1,335 is being capitalized in this lease given a lease payment of $364.72 and a sell price of $26,169. In order to arrive at that payment, the amount financed (i.e., capitalized) must be $2,606.70 which includes the items described above. Something is seriously wrong and I suspect it has something to do with the outrageous DMV/Gov fees of $813.00 shown above. A doc fee of $399 also seems excessive.

    Are you financing any negative equity which is not taxable in NJ? Although very unlikely, is the dealer taxing the sell price instead of the total payments? In NJ, dealers have the option of either taxing the sell price or total payments. The total payment tax method is always cheaper due to residualized financing. The sell price method would yield a tax base of $27,163.00 (26,169 + 595+399) for which the tax would be $1,901.41. This would have increased your monthly payment by about $15 and, for this reason, I believe the dealer computed your tax based on the total payment method.

    I suggest you ask the dealer for their LEASE WORKSHEET. If they refuse, RUN; DON'T WALK! Otherwise, if you like, you can email it to me at

    [email protected]

    and I'll be happy to review it. Questions? Please let me know.

    Hope this helps

    John

    PS: Because of rounding convention, there should be no more than a few pennies difference between my figures and those of the dealer.
  • nojusticenojustice Posts: 9
    delta737h,

    Thanks for the reply. To throw a wrench into things, I am dealing with a VA Acura dealer but registering it in NJ. That leaves me with the question, are DMV fees taxed in VA? I can't remember exactly but I believe the DMV fees added up to approx $342 according to his Auto Titiling Corp worksheet which he said were included in the $1336 (595 aqu fee, 399 doc and 342 dmv). Also, I believed they are taxing the sale price of the vehicle.

    I am a little confused on where what fees fall in what order to derive a monthly payment.
  • delta737hdelta737h Posts: 626
    edited July 2010
    nojustice,

    Well now, that makes a huge difference. I assumed from your post that we were dealing only with NJ sales tax. To my knowledge, DMV fees are not taxed in VA. Besides, tax on the DMV fees would hardly make a dent in the payment. You may be paying VA taxes as well as NJ taxes but receiving a tax credit of some sort. You are correct, VA does tax the sell price which would make the payment significantly more than $364.72. So, you need to investigate the taxes.

    Regarding the fees and how they factor into the lease payment...

    If you examine my previous post and use the following formula, it might "unconfuse" you.

    P = F x (C + R) + (C - R) / N

    P = lease payment
    F = money factor
    C = adjusted cap
    R = residual value
    N = term

    Keep me posted and let me know if I can be of further assistance.

    All the Best,

    John
  • nojusticenojustice Posts: 9
    Since I'm registering the car in NJ doesn't that exclude from paying any VA tax? Should the taxing go by NJ rules and therefore can I ask the dealer to tax the total lease payments as opposed to the negotiated price?
  • delta737hdelta737h Posts: 626
    edited July 2010
    nojustice,

    You're making too much sense! However, because you purchased the vehicle in VA, it may be subject to VA regardless of where the vehicle is registered. I would contact the VA Dept of Revenue...

    http://www.tax.virginia.gov/site.cfm?alias=ContactUs

    and ask them because I'm not really sure. I know that some states will tax you regardless of where it's registered.

    John
  • nojusticenojustice Posts: 9
    Thanks for the reference. I found that I would be exempt from Line 13: http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+58.1-2403

    Now this leaves me to ask the dealer to charge me tax upfront on the total lease payments. This will lower the monthly payments significantly. I would like to get them down on the ultra high DMV fees ($342).
  • nojusticenojustice Posts: 9
    What is the money factor and residual value for a Base TSX under this offer with Super Preferred Credit?

    2010 TSX 4-cylinder Featured Special Lease - Zero Due at Lease Signing
    $0 down payment, $0 security deposit, $0 first month's payment, $0 due at lease signing Excludes taxes, titles and fees.
  • delta737hdelta737h Posts: 626
    edited July 2010
    The money factor and residual implicit in the ad are 0.00150 and $18,705.40 (62%), respectively.

    John
  • delta737hdelta737h Posts: 626
    edited July 2010
    Yup, it appears that VA is one of those states that does grant an exemption for those registering a purchased vehicle in another state. And so, you're right, you will pay NJ tax on the sum of the taxable payments. This can be paid upfront or capitalized in the lease. Because you indicated a 0-0-0 lease, I capitalized the NJ taxes in the lease.

    So, I guess it's back to square one. If the DMV fees are, indeed, $342, then what does the remaining $471 (813.00 - 342.00) represent assuming the entire $813 reflects non-taxable items? DMV fees in NJ aren't taxable.

    The dealer's lease worksheet will speak volumes and tell us what we want to know.

    John
  • paulvppaulvp Posts: 8
    Does this sound like a good deal?????? A ny dealer offers 345 monthly
    . Im putting down 4000 with fees included for 2010 tsx 4 cycl tech pkg of 10000 annual mileage . Is this over priced ?????
    greatly appreciate your feedback .

    thanks
  • nojusticenojustice Posts: 9
    Would it make sense to pay the tax on the total amount of lease payments upfront along with the DMV fees at lease inception to keep the monthly payment low?
  • delta737hdelta737h Posts: 626
    edited July 2010
    I don't think it really matters as it's really a function of individual preference and one's comfort zone. It pretty much boils down to six and one-half dozen of the other. Some people perceive a benefit in having a lower monthly payment while others are huge fans of the time-value of money concept and prefer to conserve cash upfront reasoning that they're getting a great bargain loan at 3.84% (0.00160 x 2400) and will gladly pay the higher payment. In your case, the difference in payment amounts to about $23.49 per month.

    John
  • nojusticenojustice Posts: 9
    John,
    Thanks for the replies. I have tried to email you again but hotmail won't let me send it referring to something about spam within the email. Strange
  • nojusticenojustice Posts: 9
    What are the new incentive amounts for the dealers that expire 9/7?
  • delta737hdelta737h Posts: 626
    nojustice,

    Sorry for the inconvenience. Please try re-sending. I've turned off the spam filter.

    John
  • You're very welcome, xmjx. Acura's current lease program for the 2010 TL varies depending upon what state you are in. Please hop on over to the TL Lease Questions discussion, let me know where you are, and I'll gladly fill you in on the details.

    Car_man
    Host
    Prices Paid: Buying & Leasing Experiences Forum
  • Hi nojustice. Acura is currently providing four different dealer cash allowances on the 2010 TSX, $750 on the base 4-cylinder model, $1,000 on the 4-cylinder with Tech, $1,250 on the base V6 model, and $1,500 on the V6 with Tech.

    This dealer cash is compatible with Honda Finance's special lease program for this car.

    Car_man
    Host
    Prices Paid: Buying & Leasing Experiences Forum
  • paulvppaulvp Posts: 8
    hey im putting down 4000 cash with fees included in it . The dealer is offering 345 mon for tsx tech pkg 10000 miles. Does this sound like a fair deal ?
  • delta737hdelta737h Posts: 626
    paulvp,

    If the $4,000 includes a hefy cap reduction, which I'm betting that it does, I wouldn't never do it! Here's why...

    A car is a depreciating asset and is purchased for consumption; and so, it's not an investment. No prudent investor would ever invest in stock that they know will depreciate or lose value over time. Also, if the vehicle is lost or stolen and never recovered, the insurance carrier will only pay ACV (actual cash value or est. market value). If you have GAP protection and your lease balance exceeds the ACV (called the GAP), your GAP protection will cover the difference.

    It might be helpful to remember the following before deciding to make a cash down payment (i.e.,cap cost reduction)...

    If the GAP equals or exceeds 0, then you owe nothing and receive nothing. However, you've lost your entire cap reduction or dp. The insurance company will pay the fund provider the ACV and the GAP carrier will pay the fund provider the difference between the amount owed (lease or loan balance) and the ACV. And so, the fund provider doesn't lose; you do!

    If GAP < 0, then you'll receive, from the fund provider, the difference between the ACV and the lease balance or loan balance plus any transaction costs incurred by the fund provider. However, this may not be sufficient to cover your cap reduction or dp. In which case, you would lose the difference. The only thing the fund provider wants is the outstanding balance owed plus any transaction costs. You, of course, get whatever remains (the scraps so to speak).

    One other thing... never buy GAP insurance from a dealer if the fund provider doesn't offer it in their lease contract, or provides it at additional charge, because the cost is inflated by about 1000%! Check with your insurance carrier and, whether you buy or lease, your carrier can attach a GAP rider to your existing insurance policy. The annual cost, as a rule of thumb, is roughly 0.1% of the vehicle's MSRP. So, if the MSRP is $49,590, then your annual GAP premium is roughly 0.1% x $49,590 or about $50 annually.

    All the Best,

    John
  • romayerromayer Posts: 3
    Car Man,

    Could you please give us the July money factor and residual for the Acura TSX 4-cyl. base model?

    Also, a general question: do packages/options added to a model influence the residual percentage?

    Thanks in advance!
  • jamesbond15jamesbond15 Posts: 132
    "do packages/options added to a model influence the residual percentage?"

    Yes, considering the same mileage, a Tech package will lower the residual by about 3%.

    However, I do find it strange that a car with a navi will not keep its value as well as a car without navi.
  • kyfdxkyfdx Posts: 142,272
    However, I do find it strange that a car with a navi will not keep its value as well as a car without navi.

    Well... it's worth less as a percentage of MSRP, but still worth more, overall..

    I think that would apply to just about any option that isn't considered "necessary".

    It's also indicative of the high price of factory NAV... $2000+, and the price has remained high, even though the underlying technology has become cheaper and cheaper on the aftermarket..

    Did you get a good deal? Be sure to come back and share!

    Edmunds Moderator

  • bvdj84bvdj84 Posts: 1,724
    Yes, I think the navigation on this level of car should be "standard". At this point, where the technology cost has come down. The $2,000 upgrade is really steep at this point in time, especially when people have their iphones and other technology. I would probably opt to leave out the Nav. Though, it would be nice to be built in, but cannot justify the $45 approx more of cost to have this in monthly terms.

    Honda puts Navigation cost the same as the option for the V6. Does that really make sense? Add the V6, Add the Nav and your up over $4k in options. Seems a bit unrealistic.

    Also, seems silly, but opt out of the nav and only get 1 CD in your stereo system, rater than the nearly standard now days 6disc.
  • paulvppaulvp Posts: 8
    thanks for giving that great info .. hey so how do you think i should negotiate with the dealer .. im looking of a price range of 329 or so for the tsx with tech ...how can i get out a good deal with 4000 down and expect a monthly payment of 329 or around tht price range ?
  • delta737hdelta737h Posts: 626
    edited July 2010
    Hello paulvp,

    The first thing you should do is take some time to understand how leasing works. Learn the terminology, basic calculations, etc. Let me share some guidelines I use when leasing...

    1st Rule Do your homework. Research selling price by checking invoice pricing and incentives at Edmunds. Also, check overstock at zag.com for competitive sell prices in your area. Research the money factor and be sure you're getting the "buy" rate if your credit is good enough to qualify (see discussion below).

    2nd Rule Create a one-page lease proposal. It must be on your letterhead and be a very professional looking document. All calculations must be spot on and contain no errors of any kind. Include all pertinent data such as a description of the vehicle, MSRP, sell price, amounts capitalized (e.g., taxes, acq. fee, etc), cap reductions (e.g., trade, cash down, etc), money factor, residual factor, residual value, term, taxable payment, lease payment, amounts due up front (itemized), contract provisions (gap insurance, excess mileage charge, applicable disposition/purchase option fees). All dollar amounts are calculated, not by the dealer, but by you using a program that you created.

    A professional looking one-page lease proposal speaks volumes about you... it sends the message that you know and understand leasing. That quickly serves notice to the dealer, and so; they're not as inclined to play games.

    3rd Rule Fax/email the proposal to the dealer and negotiate via phone/email from the comfort of your home/office with your laptop excel spreadsheet lease program fired up and ready to rumble! The only thing you're likely to negotiate is the sell price and that only requires a few keystrokes on your laptop. And, bing-bang-boom you're done! This suggests that the biggest advantage of a lease proposal is that it saves time, money, and aggravation.

    If you like, email me at

    [email protected]

    and I'll send you a few sample lease proposals.

    The key is that you must control the deal. Never allow a dealer to control the deal by allowing them to "run the numbers". Trying to figure out the dealer's numbers is often a pointless exercise and, frankly, a waste of time unless, of course, you have a copy of their LEASE WORKSHEET. This is a computer generated document that eliminates confusion and guess work and will tell you everything you need to know and then some. The beauty of this document is that it always tells the truth. Allowing the dealer to control will only end up costing you more money in most instances.

    If you agree to allow the dealer to "run the numbers", ALWAYS ask them for their LEASE WORKSHEET. If they refuse to give you a copy, RUN; DON'T WALK! However, there is absolutely no reason for the dealer to refuse to give you a copy of their lease worksheet.

    Now, let's examine the following hypothetical lease...

    MSRP.................................... 80,000
    Negotiated Sell Price............... 74,000

    Amounts Financed
    Acquisition Fee...................... 650
    Dealer Doc Fee..................... 250

    Gross Cap Cost................... 74,900
    Cap Reduction (Trade Cr.).... 6,000
    Adj (net) Cap Cost (C).......... 68,900

    Cost of Money/Residual

    Money Factor (F)............... 0.00100
    Residual Factor................. 55%
    Residual Value (R)............ 44,000 (Res. Factor x MSRP)

    Term (N).......................... 36

    Monthly Payment = F x (C + R) + (C - R) / N
    = 0.00100 x (68,900 + 44,000) + (68,900 - 44,000) / 36
    = 112.90 + 691.67
    = 804.57

    Observe that I've bolded the Negotiated Sell Price and the Money Factor as these are the two most important items in any lease transaction because they drive the cost.

    A note regarding down payments (cap reductions)...

    As I indicated in a previous post (#1866), I do not advise making a cash down payment (i.e., cash cap reduction). A car is a depreciating asset and is purchased for consumption; and so, it's not an investment. No savvy investor would ever invest in stock that they know will depreciate or lose value over time. Also, if the vehicle is lost or stolen and never recovered, the insurance carrier will only pay ACV (actual cash value or est. market value). If your lease balance exceeds the ACV (called the GAP), your GAP protection will cover the difference. See my previous post (#1866) that addresses the issue of GAP protection.

    A note on money factors...

    Money factors generally follow a tiered structure. Here's a hypothetical example...

    0.00120 + 0% Reserves.... "buy" rate
    0.00140 + 1% Reserves
    0.00160 + 2% Reserves
    0.00180 + 3% Reserves

    Reserves are similar to points paid for a mortgage loan but only in reverse. In mortgage financing, points are charged to buydown the interest rate where 1 point equates to 1% of the amount borrowed. In car financing, reserves are used as an incentive (reward) for dealers to write loans or leases at rates exceeding the buy rate. The "buy" rate, also known as base rate, is the rate used by the lender to calculate the finance charge, all of which, is retained by the lender. In other words, the lender doesn't share any portion of the finance charge with the dealer. But, if the dealer writes a loan or lease at a rate that exceeds the "buy" rate, then the dealer has earned the right to be compensated by receiving a portion of the finance charge. The amount of compensation is typically 75% of the difference between the total finance charges.

    If the dealer writes a lease with a money factor of say 0.00160, then they will be compensated with its associated reserve level of 2%. This means the dealership receives roughly 2% of adjusted capcost assuming the adjusted cap does not include bank related fees. A bank isn't going to allow a dealer to earn reserves on their bank (acquisition) fees.

    The term "reserves" is actually an old term. It used to be that dealers weren't entitled to reserves until the end of the lease and, so, the fund provider would "reserve" those dollars for the dealer until the lease was satisfactorily fulfilled.

    Now, there are those fund providers that offer a tiered structure that depends only on the customer's credit score. They pay the dealer a flat fee instead of reserves regardless of the tiered rate selected. In this case, the very best rate is called the buy rate and is reserved (no pun intended) only for those with the very best credit.

    Hope this long-winded dissertation was helpful and not confusing.

    John
  • jamesbond15jamesbond15 Posts: 132
    I thought all the dealers used the same money factor (given the same credit score)? You mean some bump up the MF to get extra money from Acura Financial?
    Are the MF posted here the best MF available (give the credit score)?
Sign In or Register to comment.