2013 and earlier-Honda Accord Lease Questions

bvdj84

If I were to extend the lease longer than a 36mth, like a 42, 48, Would my payment go down more?? I think it would.

I really want this model, but don't want to overpay. If I go longer, my $364 payment could go down?? Really it won't matter how long the lease is for me, because it is a honda, and I will be able trade around 2-3yrs anyway and be fine. My current lease is already at the point where I can trade at any time. I do know adjusting the price of the car will make the most difference, but at the $26,599, how low can you go?

Dealers will laugh at this quote though, Who will honor it??

08 EX-L 4cyl, Navi

jaxs1

How can you have "equity" in a lease? You do not own it.

rsalas

you might have equity on a lease if 1. you got the vehicle below invoice price. 2. there was dealer cash available and was given to you when you leased the vehicle. You can only take advantage of the equity if you trade your lease in for a new vehicle.

bvdj84

You would have equity if your pay off amount on the lease is lower than the market value. That difference would then be considered equity. The dealer would be able to roll that value into the next lease. Most Honda's if you turn them in at the end of a lease, you would have some equity, because they hold their value so well. Yes, you do not own the car, but you are paying on the pay off amount. Of course that is a small portion of that overall cost, but I can log on right now and see what the full pay off amount is.

It is the same thing if you tried to trade a car that have more due than what it's actual value is. That would be called negative equity, and you would have to roll that amount into the new lease or purchase.

jaxs1

Since you have no ownership in the leased vehicle, how is any value over the the payoff yours to take? Wouldn't you have to buy the vehicle for the agreed residual price and then try to resell it for more money if you think you can?

I don't see why they would just give that money to you.

kyfdx

Almost every bank that leases cars will allow a licensed car dealer to take it in trade, as long as they re-mit the payoff... no sales tax, naturally.

So, if the vehicle's trade-in value is more than the payoff, then the lessee can realize the equity.. Just like they have to come up with the cash to cover negative equity if the vehicle is worth less than payoff.

Doesn't happen often, but it's possible..

regards,
kyfdx

bvdj84

Lease? Well I am able to walk into the dealership right now and trade in. I drive a brand new car every 2-3 years.

japs

any moron with half a brain and some responsibility about finances will tell you that leasing is the absolute WORSE financial decision you could ever make regarding car buying. People need to educate themselves a bit. Dont be lured into low payments and such. Theres a reason why leasing agreements are the most complicated around. Its like your phone bill...when you call CS and ask what all the fees and charges are, employeees cant even explain them to you. Its all smoke and mirrors. NEVER LEASE A CAR!

additionally, they are working on getting more simplified leasing agreements, as there have been tons of lawsuits for not being honest and truthful and upfront in their agreements

bvdj84

I understand your position. Your are exactly right. For me, at this time, it is easier for me to worry about a car payment than to worry about costly repairs on a used car. I am able to get more car, and the model I want to fit my needs. I used to have a 91 BMW, and it was alot of fun, but the repairs were getting up there, that all could be rolled into a car payment. All I have to do is worry about the basic up keep of the car. My 06 SE, has never caused me any problems. I love it. Long term, perhaps, I am not saving any money at all. For right now, it is okay. I am fine with that. This day in age, I believe many lease their models because they can easily get in and out. This is my first lease with a co-signer. Now I have excellent credit, along with my car and a small credit card, I have established myself so well. It was easier for me, having no credit, to lease with a co-signer, than to get a loan. In fact, I am sure they would not allow me to take a loan out for $22,000 as my first loan. I am able to walk in now, and not even worry about being denied. I like being able to walk in and pick a new car after a few years.

You are right, the lease is complicated. Sign here, sign there, WOW, it was a big thick wad of papers. But, with honda it is easier to get in and out, because of their value, try that with GM products, and you'll see complicated.

I guess the point is, Do what works best for you.

vital411

WOW, you couldn't be more wrong. Generally anyone with a financial background knows that it's better to lease assets that depreciate (I.e Cars) and purchase assetts that appreciate (I.e Real estate).
The ONLY time it makes sense to purchase a car is if you don't drive much (say less then 10k a year) and / or you are going to keep your car longer then 7 years.
Let's look at an example, say you are getting a new $30,000 MSRP car and you get the dealer down to $28,000.

If you purchase it you have to pay taxes on that entire amount, i live in RI so thats 7%. so now you have to finance 29960. You get a 5 year loan at 4% interest, making your monthly payment $551.76

If you were to lease this car, assuming the more popular 36Mo 15k/year lease at a conservative .0020 MF with a 60% residual. That would make your payment 395.66 incl Tax (as the 7% Tax is only figured on the payment, not the entire balance).

If you were buying this car, let's assume you keep it 6 years. So you make your 60 payments of 551.76 which equal = 33105 and say it is now worth 7500 as trade-in. (looked up a 2001 Accord V6 for comparison). Normally a car would need tires and brakes at least once in that period, and maybe some other odds and ends repairs along the way. (say tires are 500 for the set and brakes are 250) and then 2,000 in odds and ends repairs over the 3 years it was out of warranty. that totals 1750 So your car cost you 28355.

If you leased 2 cars (36 months each to get to the 6 years you would have kept the car you bought) you will have paid 23739 in payments, and usually there is an Acq. fee with a lease of 595, so that's another 1190 to add in which makes the total cost of these 2 leases 24929.

Let's recap. If you leased, you saved 3426 over the 6 years, you got to drive a brand new car after 3 years, it was always in warranty, you never had to really worry about what as going to go next and perhaps leave you stranded somewhere.

Also if you look at the difference in monthly payment 551.76 if you bought minus 395.66 if you leased, equals 156.10 per month. Put that differencein an ING direct account at 4.5% you'd have $10,500 in there at the end of 60 months.

hmm, i think i'll lease

jaxs1

You made a lots of weird assumptions like assuming you would never need to replace tires or brakes on a 3 year lease. With 36-45K miles, even if they are still "OK," you may be charged for excessive wear if they don't meet the lease return standards.
You also have to pay a fee to return the vehicle if you choose not to buy it at the lease end.
If you assume you would have paid $2,000 in repairs for the 3 years out of factory warranty, why would a person who would make that assumption not pay $800 for the Hondacare warranty instead?
Most likely you will not even have $500 worth of repairs in 6 years, because if that wasn't the case, they couldn't make a profit selling Hondacare at the prices they do.
A brand new car with a defect can break down and leave you stranded somewhere just like a 4 year old car. A 4 to 6 year old car that you bought new hand have been regularly maintaining isn't more likely to leave you stranded than a new car.

All that being said, sometimes a lease does work of better for some people especially if the car has a subsidized lease program and the most important thing to you is having a low monthly payment. Some people can write off their lease as a business expense. Most cannot and even when they can, there are also ways to write off purchased cars for business.

A lease doesn't always work out cheaper even short term though.
I had purchased an Accord EXV6 with a 60 month loan with no down payment and traded it in less than 24 months later with some equity back. I did this with lower payments that I would have had if I had used their 24 month lease program at the time and didn't throw away money on acquisition and disposition fees. Honda doesn't have a good program for 24 leases on the Accord right now either.
I had no repair or maintenance costs that I wouldn't have had if I had leased and I was able to trade the car when I felt like it rather than on a forced schedule.

japs

srry dude...what i suggest u do is attend some financial workshops with people in the know. EVERYONE that Ive been to (7 and counting) says never ever lease cars. You have fallen for the rhetoric.....good luck

bvdj84

Wow, We are all getting on big tangent on this topic. There are many options for buying products, leasing, renting, purchasing, etc...... There all these options, because then each person has more options available to fit their needs. There is no right or wrong, and when we all make these choices in life, we go forward knowing the consequences of these choices. Leasing may work best for some, owning their car within a few years may suit best for others. Options, there are so many, making life even more complicated. Of course this is a forum, in which all of us can bring our opinions and points of view to the table, but does not mean we all feel the same way.
Leasing works for me, and perhaps for many others, otherwise this forum would not be an existence. Lets not make this all personal, do what works best for you.

vital411

Very good point, and the two previous posters made great points as well.
Yes, leasing works for some, purchasing works for some. It does vary based on the programs offered on the month you wish to buy, My brother for example wanted to buy his 06 accord, but the buy interest rate was much higher then the lease money factor, so he leased it with full intent to buy the lease out, and he bought the hondacare warranty for 800. (The reason i didn't mention the honda care was that not all people buy them, and i was trying to use a universal example not specifically to a Honda).

I do agree there are instances where purchasing is a better option, and vice versa. For me, someone who drives 15k a year and even when i used to buy cars i used to keep the 2 to 3 years, it makes sense to lease as that's what running the numbers shows. I've spoken with "Financial professionals", work with a few of them actually, and they all agree that if someone drives within the 12 t o15k mileage and wants a new car every 5 years or less leasing is better. If you don't fit that mold then buy.

My "rant" was just to show the rationale behind why leasing can make sense and the numbers to back it up give or take. It's hard to forecast if you'll need tires in 45k miles, (depends on the tires the OEM chooses and your driving habits), also hard to figure repair bills on an older car if you decide to keep it long term, these variables don't always make your answer clear cut.

Just i look at my last lease, 2004 Infiniti FX35 - MSRP of 46,000 and i leased it for 39 Mo for 552 a month. I put 50k miles on it and just turned it back in. Clean cut, no negative equity, and lower payments (i couldn't have afforded 750 a month to buy it ). With a lease you get more for less...but with a purchase you get to have those years with no car payment at all.. so it depends on your life and driving habits.

Final Word... this is America, do what ever makes you happy!

Thanks for the lively discussion!

jaxs1

Well, suppose the vehicle trade-in value is not more than the lease payoff if I reach 36K miles 4 months before the end of the lease? Would it be cheaper to stay in it to the end of the lease term and pay 4,000 miles of mileage overage fees or would it have been cheaper to have leased based on a 45,000 mile residual?

If I turn in the vehicle early, I wouldn't realize the full value of the 12 months of vehicle registration that I would have paid for at the last renewal and would have to pay registration again on the next vehicle I get.
If I keep the leased Accord for 40K+ miles and didn't want to risk any expensive out of pocket repairs after 36K miles for a vehicle I'm only leasing, I would have to buy the 5/60 warranty for about $350 (since 5/60 is the shortest available).
However, if I pay for the 60K HondaCare contract, I might as well have just leased for 48 months, 60K miles instead so I would get better value out of the money spent on HondaCare.

Does Honda have an attractive lease program for 48 month 15K mileage leases?

vital411

It's hard sometimes to get a trade-in value to be more or equal to your lease payoff as sometimes the leases are structured with an artificially high residual to make the payments lower,in lue of cash back of a lower money factor. Also it's hard to predict what the market will pay for your car 3 years in the future.
Since honda leases are $.15 per mile over, 4000 would only be 600 bucks. I would then see what the difference is in the 36k to 45k lease payment - if it comes up being a lower total cost then then it's only the "out of warranty" period you have to worry about.
Most leasing cos don't have attractive rates on 48month contracts, especially a 15k vs. a 12k as they don't really want to take a car back that's 4 years old with 60k miles. They have a harder time selling it then something that's 3 years old with 36k or 45k miles.

If you are OK with keeping a car for 4 or 5 years, maybe you are better off buying?
The other option, and this is what my brother did with his 06 Accord - lease it for 3yrs, 45k miles and buy the HondaCare for $800. Then buyout the lease, keep it for 2 or 3 years, and sell it / trade it. The Hondacare is transferrable so it's a selling point too.
My Brother did this because he planned on buying but the lease MF was lower then the buy int rate, so he did a 3 year lease (make it have lower payments) and then will do a 3 year buyout. Stretching it into a 6 year loan in theory. And then when it's paid off he'll keep it another year or 2 and trade it.

As for the registration, that's sorta a background cost that you probably can't avoid. I know RI, my state, does registration expiration months for leased cars based on manufacturer. I had an infiniti before, and Nissan's lease expiration month was september, since RI has 2 year registrations, i had to pay a 2 year renewal when i was turning the car in in Nov. I kept the plates (waiting for my honda to arrive next week) and they will do a transfer which will cost some but i believe the take into account the renewal i've already paid and somehow prorate that out.

Good Luck

kisyntym

kyfdx, can you work a deal out for me. I am looking for a 08 accord coupe EX. 3 year 36000 miles. $0 down. I have honda preferred not super preferrred credit.

Thank you.

petepat1

Vital411
Just wanted to second your excellent assessment of why it is better to lease than to buy, despite what Suzi Orman and other financial experts always seem to advocate (I like Suzi, but differ with her on this one).
I'd add to your reasoning the psychological factor: I live in the NYC metro area where we have highways going through neighborhoods more unsettling than downtown Baghdad. The thought of a car breaking down on the Cross Bronx Expressway, in the netherworlds of Brooklyn, the upper upper West Side of Manhattan, or Banana Kelly in the Bronx is the stuff of nightmares (See "Bonfire of the Vanities" for a fictional version of that wonderful experience), so having a highly reliable car - in my case, a Honda Accord EX - is paramount. I can't afford to buy a Honda. But I can afford to lease one, and have done so three times, and am now entering my final month on the third lease. Not only have I had virtually no major repair costs, but I have had the added comfort of knowing I am driving a highly reliable and sound car, and am doing so during the best three years of all cars, the first years.
Older Hondas do well, too, of course, but I don't have to worry about that because after three years, I am on my way to obtaining yet another brand new model.
It seems purchase advocates don't ever consider repair costs of older cars, or the comfort factor of leasing a car for the best three years of its life.
Thanks again for your excellent summation... and let's not embarrass the gentleman who suggested those who disagreed with him are comparable to "morons with half a brain" by pointing out his confusing the word "worse" with "worst," an error I believe my 10-year-old would catch.

vital411

Thanks for the kind words Pete,
To those who disagree with my assessment, and with Pete's reiteration of it, then fine - to each his own. Make your own decision that best suits your situation.

Don't rely on other people to make your decisions, even if they are "Financial Experts" The problem with Financial Experts, is that they all think they are "all knowing." Fact is they often have differing opinions from other "Financial Experts" so who says who is right? I guess that's for us to decide.
A word on Suzy, I can't stand Suzy Orman, though i think anyone that helps educate the "average person" and gives them a better understanding of financial decisions is a good person in my book (too many people are too uneducated about their own money and how they spend and invest it) I don't think she is the Financial God she self-proclaims herself to be.

I disagree with many of her takes on things, as do other so called "experts" (not that i'm saying i'm an expert but i do have some formal education in these matters).

I think it's best to get several opinions on the matter at hand, weather it's investing, leasing, or other points involving financial decisions. At the end of the day though you should be able to take all that advice, apply it to your individual situation, and make the best decision you can for your choice at hand, after all it's your money!

bvdj84

Are we still on this topic? Wow, Seriously, We are all entitled to our opinions, but to force them on to other people and bash them, that alone is childish. We all work hard for our money, so we can spend it how we want. Lets keep it clean. The topic that were still on can open a whole can of worms. That is why we have choices in life.
Can we agree to disagree?

petepat1

Well, [non-permissible content removed] - by the way, wonderful logon name, which dictionary of ethnic slurs did you use to come up with that one? - life probably is no longer worth living now that we have suffered your indignation and have been declared morons.
I'd suggest you reread VITAL411's as well as other participating members' comments to understand how one may disagree with another without hurling disparaging commentary.
On that note, I will respect our moderator's last comment and move on.
We are anxious to lease either a Honda EX-L w/nav or an Acura TL w/nav and are seeking the experience of anyone who may have acquired one in Northern NJ. We'd like to know if how far below invoice we should expect a dealer to go, especially at this time of the year. Thank you for your help...

vital411

I see these "Happy Honda Days" ads on TV, but i still don't see any change in the lease MF. The 259 / mo lease they offer is with a large Capital Cost reduction (Down payment), so i'm not sure what makes this even a deal.
I do see this lease "special" is good until 12/4 - I assume the deals will only get better for the end of the year

ANyone on the "inside" see any evidence of this?
My 08 Accord that i orderd 2 months ago should be in in a week or 2 so i'm wondering what i'll be looking at for "deals" then.

jaxs1

It is a "deal" because the payment is low and that's what people will focus on. Nevermind the rest of the terms.

bvdj84

Ya I saw the lease deal, and I was like WOW, when I saw the down payment, and the car is still up there in price, considering the model, and down payment. Its crazy, hopefully people will see through that. Take the down payment away and add about $20-40 more to the payment, but I guess its almost on target, considering around 22k its about $300 or so a month, but that is with $0 down, so something is not right...

I am not buying now. Spring!!

nacho2

I used to sell cars for a luxury manufacturer, leasing is the best way. You want to minimize your depreciation, and I hear people say oh well you don't own the car. Well, when you purchase the car you don't own it either until you make the last payment to the bank by that time you want to trade in the car and you get a lot less for the value of the vehicle. The key to a lease get a great Money Factor, High Residual, invoice or below price, know mileage, and preferably 2 yr lease.

dbarton7

Car guy or anyone else who knows please advise:

Today I was offered the following lease for an 08 Accord EX-L (4 cylinder) without Nav ( I am in NJ).

$339/month including taxes
12K/year miles
36 month term
$600 down

Is this a good deal?

Thanks in adance for your help.

linebacker68

Based on the info you gave, there's no way to tell you if it's a good deal or not.

What sales price, money fact and residual is this lease based upon?

Before you ever get into monthly costs and miles/year with the dealer, negotiate a good price. Use the info you can find on Edmunds to get the TMV and the invoice for that model. Look at the forum discussions about what that car is currently going for. The sales price that the lease is based on can make a big difference. The MF and residual are set by Honda Motor Finance and cannot be negotiate by the dealer.

I leased an '08 Accord Coupe V6-L with 6spd stick this past week. Before I even mentioned the word "lease", I worked on the price issue. Even though Edmunds said the TMV was right at sticker (the V6 coupe is hot and they aren't making many with a manual--it's a rocket), I got it at about $1400 below MSRP. Only then did I start talking lease.

My Accord lease (36mo/12,000 mi/yr.) had a good residual (62%), but a mediocre money factor (.0028). For some reason, though, this model qualified for a sales tax exemption and it brought the cost to $420/mo with nothing up front except the first month's payment. That, of course, was based on the price we had already negotiated.

Hope this helps.

g1200

Hello,

I'm new here, but have been reading these posts for a while. I was wondering if you guys could help me out. I don't want to make an impulsive decision. :confuse: Here are my specs:

Lease: 36 months
Miles: 45,000
Monthly Payment (after taxes): 315.00
Down Payment: 2,500.00
Price: 24,532.11
Residual: 16,957.00
Money Factor: .0028
State: Southern California

Is this good? They're not budging on the down payment right now, but I hope to bring it down (i.e. without blowing up my monthly payment.)

I appreciate the Help! Thanks!!!

vital411

I wouldn't advise putting any more money down then the Acq. Fee, 1st Payment, and Sec Deposit. This should be under 1500. IF you ever wrecked the car you wouldn't get any of the downpayment back, so put as little down as possible.

Also i'd recommend waiting until after Dec 5th, as the current MF is good until Dec 4th, so hopefully they will be lowering it to boost End Of Year sales.

g1200

Thanks for your reply,

They dropped the down payment to $1,500, but they raised my monthly payment to $335.00 (still, not too bad).

I really don't know what MF does and how it will affect my payment?

Thanks for your help!

bvdj84

Not too bad, but really, if they pull anymore stunts, remember there are other dealers. Always start with $0 down, then if you want a lower payment, then put some down.

You don't have to accept anything, You can move on.

nacho2

Hello,
My lease on 06 accord exl v6 lease expires Dec 12th, the rep who I spoke with several times gave me the option to extend my lease anywhere from 1 month to 24 months, currently I have a 2 yr lease. He told me that there is going to be a new MF Dec 15th or 16th going through January 2, 2008. However, he said that there will be a better lease starting Jan 2nd, and that I should wait for that one and that if I want to return or keep the car its up to me, He said that he is unable to see the MF on his screen for Dec 15th or Jan 2nd. Right now I am certain that I can get the car for $500 over invoice, but for me I want a better MF because these are vehicles that are meant be sell to the masses. On my previous lease I put $0 down, 2 yr lease, 15k, $355/month. January and Feb are historically slow months for car sales.

jaxs1

I'm really surprised this person says he knows what's going to happen more than a few days ahead of time and is free to blab about it.

vital411

I agree, usually even the dealers don't know until the day they change, or one day before.
Does anyone know the Dec MF and residuals?

nacho2

The rep works for Honda Financial services, spoke to him a couple of times. Take it for what its worth. I will be waiting for a lower Money Factor. Wish you all well.

bachatu

Im surprised Honda has been as arrogant as they have and not put out any specials. The supposed holiday sale is a joke. All dealers I checked with wanted more than 300 a month + tax for a sign & drive deal on an accord, and that is for the base/value model.
You can get a Camry sign & drive right now for about 279...

jaxs1

No matter how arrogant they may be, they can only get as much as the market will bear. If people will pay what they are asking, they are going to take it for as long they can get it.
Supply on the 08's is still ramping up. The dealers are just starting to have good supplies of the 2008 sedans and it will be a few months longer before coupes are in decent supply levels.
Since they want to sell over 400K per year, Honda will have to build much more than they are and the dealers will have to turn them over much faster to reach that goal. That means better prices are coming in 2008.

bvdj84

I was offered $391 a month for an EX-L 4cyl, navi. Asking price of $28,005. This is a 48 month lease. The original lease was $421 on a 36mth lease. This lease is a $0 down lease, just first payment and doc fee due at signing. For the asking price, it isn't bad, but I believe that I should be around $26,----k for this model. That would bring my payment down much lower with that price, plus if I did a 48mth lease. I am not concerned on how long I have it, because this model is loaded. I am thinking that with the better asking price, I could accomplish a payment of $330-350. I do think this is possible, but to find a dealer to be completely honest and get this where I want will be tricky. The dealer did say that if I were to buy one right now, than he could get me a better deal. Payment for me is important, that is why I want the lowest price available, because I want this model. I am sure once I really want to do it, and tell them what I want, than I feel they'll want to help me.

What do you think the REALISTIC asking price should be? I saw on ebay, with the model I want is priced at around $26k. The regular EX-L is priced around $24k. So the $28k, is about 2k over what I should be paying?

Plus if I get a coupe, it'll be even more tricky to locate one, work on price.

bachatu

The best way to get to the lower numbers you are looking for is to find out what the money factor, residual, and MSRP is on that particular model. From there, you can then begin calculating and get an approximate idea as to what Cap Cost you need to get the car down to in order to get it in the 330 to 350 range. You can also start getting quotes for the price of the vehicle from all dealers within a 100 mile radius. Anyone and everyone. It will take some work as they obviously want to make the biggest profit possible. But you will have to first start with getting prices and start comparing and responding to them "But dealer B is offering lower payment at such and such"... that usually works well by starting them in bid wars and gets them to lower their payments. At that point, they know u are shopping around and acknowledge that there are many options, and dealers can add to the incentives on the lease program if they want. I also have found that it saves hassle by doing it through the internet because A. you dont have to leave your chair, B. they love responding by giving you a below MSRP price and labeling it "Special Internet" price.... that usually is a grand or more lower than MSRP, a good place to start.

g1200

I did it and I love the car. :shades: I know I should have waited for a better deal, but I really wanted it.

I put down $1,500 (including 1st payment and other fees) and my monthly is $325.01.

Thanks you all for your help.

muddyy

Hi, I drove the Accord coupe V6 today and it was really nice, however, the lease deal is confusing and no matter how many calculations I make it always seems to come down to one number, that is: what you pay the dealer in total from the day you sign, regardless of the down payment, through the 36 months of the lease. It's all the same regardless of the money factor or the residual. Let me explain:

Take NY for example, and NY tax of course, then the price of the car, a loaded V6 coupe with leather and NAV, that's $30,510 (18 in. wheels); so figure 30,510 plus NY tax. Forget regristration and plates, that's not a big factor. So if the dealer charges 30,510 for the car, and Honda's lease deal is 10,000 miles per year with a 36 month payment, the only thing you need to ask is what is the total I will be paying the dealer from when I sign to when the 36 months is up (this logic assumes you do not intend to buy the car at end of lease and you will not go over the miles allowed and you don't crash the car early on). That number today happened to be 18,212. With 500 down (they suggested 500) and obviously all NY taxes and charges folded into the payment, that puts the monthly payment at $492 per month; 492x36 plus 500, total $18,212.

This, of course, felt very high to me so over the next few minutes there was a lot of discussion about the down payment and taxes and residuals and many other things. But here is the rub: unless the dealer is willing to lower his price none of those factors mattered. It does not effect the price you pay over the life of the lease if you change or add to the down payment, if your monthly number changes because of that it's just an illusion, you are still paying the same amount to the dealer. Go to a dealer or two and do the math, no matter what down payment configuration you give them you will pay the same in the end. You should be asking them what is the price of the lease in total, that's the only number that matters; pay now, or pay later, that might be a personal choice and a consideration regarding perception or cash flow, but it doesn't get you a better price. Knowing the residual doesn't help either. It may be interesting but it doesn't help lower your price.

The following quote confuses me, if I may ask, can you explain to me why this is important and how it could effect your lease price:

The previous poster wrote:

"The best way to get to the lower numbers you are looking for is to find out what the money factor, residual, and MSRP is on that particular model."

Here is what I don't get: 1. the dealer sets these numbers, right? How does that help you? 2. Why make it so complicated? The dealer will often use these numbers and make it even more confusing, who cares how and why he gets to his price, I'm sure that many times it's his own profit motive that really motivates his explanation. There is just no way to tell why he is saying what he's saying, just go to the bottom line: what is the total price you will pay him from the signing to the turn in in 36 months.

I agree you should go to several dealers and use the internet, but the Bottom Line price is all that matters, it doesn't even matter if the dealer discounts the car, why, because he could maniulate the lease later in his favor. Ask him what you will pay in total over the life of the lease including taxes and then you will easily understand what is really going on. Leases are the same as buying, this is what people don't understand. You pay a price for 3 years use, you in effect buy it for 3 years. So ask them the price, ask for one number, you'll see things in a whole new light.

Feel free to tell me I am wrong, I enjoy learning new things.

jaxs1

You need to know how many payments you are making, how many miles are allowed and what they charge for extra miles. You also need to know both what the residual is and what the disposition fee is if you choose to turn it in.
You may say today, "I'm 100% sure I am going to turn the car in at the end" or "I'm 100% sure I'm going to buy it at the end, but things may change, so you need to know what to expect in both scenarios.
You might need to turn the car in early for some unforeseen reason and the numbers are going to matter then because it affects how much you will have to pay off to get out of it early.
There is no reason to not know what the sales price is, what the residual is, what the interest rate is and what all their fees are.
If they a purposely trying to hide them, they are doing something shady.

It isn't that complicated:

In the lease, you are paying for the difference between the cap cost and the residual value, plus interest, plus fees and plus any excess mileage you have when you turn it in. The less difference there is between the cap cost and the residual, the less it will cost you. Since they don't set the residual, the only way to reduce the difference in these numbers is to reduce the cap cost.
It's pretty simple.

The dealer does not set anything other than the selling price, but they might mark up the interest rate for extra profit and add extra junk fees.

muddyy

Thanks for the reply but I think some things are still more complicated than they need to be. The basic premise of my post in case it wasn't clear was to discover if the lease I was quoted for an Accord V6 coupe loaded is a competitive one; I think it may not be.

Quote "You need to know how many payments you are making, how many miles are allowed and what they charge for extra miles".
Of course, and I said so, 36 payments, 10,000 miles a year and I'll be under, not over, as I have virtually no commute. They claimed 36 months and 10,000 was Honda's best lease deal so I'm starting there.

Quote "You also need to know both what the residual is and what the disposition fee is if you choose to turn it in."
There is no disposition fee from Honda when you turn it in under miles and knowing these things doesn't necessarily lower the asking price (of the lease total).

Quote "You might need to turn the car in early for some unforeseen reason and the numbers are going to matter then because it affects how much you will have to pay off to get out of it early."
What ifs make it too complicated. Are you saying this will lower the price of the lease deal? Because it doesn't.

Quote "There is no reason to not know what the sales price is, what the residual is, what the interest rate is and what all their fees are. If they a purposely trying to hide them, they are doing something shady."
They are not hiding them; they're too high and make the lease price too high (in my opinion).

Quote "In the lease, you are paying for the difference between the cap cost and the residual value, plus interest, plus fees and plus any excess mileage you have when you turn it in".
Ok, but you are still paying what the dealer wants, so ask him the total price, it doesn't matter what the cap and residual are if they don't help you lower the asking price or if you think the lease is higher than a 30,000 car should be (compared to other 30,000 cars).

Quote "The less difference there is between the cap cost and the residual, the less it will cost you. Since they don't set the residual, the only way to reduce the difference in these numbers is to reduce the cap cost. It's pretty simple. "
But these numbers are not set by you, so how does this effect price? Are you simply saying: ask them to lower the price? I did that, it didn't work.

Quote "The dealer does not set anything other than the selling price, but they might mark up the interest rate for extra profit and add extra junk fees."
Ok, but if the price is too high, who cares about all that secret stuff, you'll never know anyway. My point is, ask them the total amount of money it costs. If it's higher than other 30,000 car lease deals for 36 months and 10,000 miles then it's a bad lease, period. If you find out it is too high compared to other comperable cars at 30,000, then walk away if they won't lower the price. If you really want the Accord because it's really nice, then don't debate the price, give them what they want. I think that's obvious, right? I was just trying to figure out if their lease is competitive, and I'm not sure I know that yet.

jaxs1

OK, so you just don't want to know these things. Never mind.

muddyy

No, I do want to know, but overly complicated details help the dealer, not me. I just want to know if the lease price I was given is competitive. I would like anyone's opinion on that question.

jhinsc

Muddyy does have a valid point. Just knowing the residual and money factor, etc. is of no help if you don't know what to do with it or how it helps you get a "better deal". To me it's fairly simple assuming you know the car you want; The bottom line is the lowest monthly payment, with the lowest down payment and the highest mileage amount allowed. You achieve that, all the other stuff falls into place.

bvdj84

Well, I am not even sure I want to make a move yet so, I took the approach to the dealer via email that I simply wanted to see what my options were if I did it right now, but then he took the approach that when he gave me a quote, he would do better than the quote given if I did a deal this month. The deal was a little high, but so was the price. I totally don't want to trade in the winter time, I am just not motivated. I really love my current car, but I know what once Spring arrives, I'll be in a different mood. Plus, by then my current lease will be really close to my allotted miles. I am already 4mth=1,000 miles over mile lease. Though its not up til Jan 09, but I am still months and miles ahead. So either way I'll have to trade early. I have already had it nearly 2 years. But, I have found its all in the way you approach the dealer, in how they will approach you in a deal. Its almost like if you are too nice, they walk all over you, but if your too abrupt, than they will not take your seriously. You have to be nice and assertive all at the same time, which can be hard. If I walk in by myself, than I am likely to get a poorer deal, If I go with someone older than me, than they typically take us a bit more seriously. also, it is a huge game of luck, Getting the right salesmen that will cut all the crap, and treat you well, and understand your position, and what exactly you want.Find out who the Great salesmen is, by other customers. Be willing to walk away, and that there are many other dealers. Some dealers take their jobs too personal. Well there is my 2 cents.

When I go in for another deal, I am taking someone with me, that has the knowledge, and going to a reputable dealer, with good reviews. I will take your advice, and get email quotes first. I will get the EX-L 4cyl, Navi.

vital411

I do like this way of comparison - knowing what the total lease cost is can be a great way of comparing apples to apples - especially if you are dealing with different car makes and or models that may have different residuals and money factors.

However I still want to know all of these factors so i can "double check" the dealers math and assure that they are using the correct numbers to calculate the payment.

You are correct though, many dealers increase the downpayment to give you a lower number but it's just shifting the payment up front vs over the life of the lease (the only savings here is that you don't pay interest on this money as you are paying it up front).

In either case the only way to argue a lease payment down (monthly lease or total lease payment) is by getting the sales price of the car down. I think that is what is great about this forum we can all compare notes on what others are paying (i know there is another forum about the "price" specifically) but i think some of that gets lost when dealing with leases.
I believe this forum is great for sharing tips and educating new leasers as well as the current MF, Residual, and mileage numbers for those who want to check up on a dealer.

Bottom line, both ways are correct - looking at a lease as a total or as a monthly - it just depends on your point of view and what your situation allows ( i know some people would prefer to put a lot down to get a lower monthly fee, but don't realize the ramifications that may bring should the car be wrecked, stolen, etc).

Thanks for the new perspective!

vital411

Does anyone have the Dec. MF and Residual numbers yet?

Thanks!

quattro5

Does anyone know the current Residual & MF on the LX-P and EX models?

Thanks