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Honda One Pay lease question

J_BoxerJ_Boxer KentuckyPosts: 7
edited February 7 in Honda
I recently leased a 2018 Honda Accord Touring 1.5L with a One Pay Lease. Anyone have information of how their process went and can share their experience? I negotiated down to $12,000 36/18k .

Answers

  • Hi J. Boxer,
    Coincidentally, yesterday I posted a similar question in the Acura MDX 2019 leasing discussion (I assume the OnePay lease contract would be identical, since both are Honda products) , and so far I've received 2 very thoughtful, yet different replies - one from the excellent moderator, and the other from an apparently very knowledgeable consumer. I am still very interested in this approach, but am concerned about the confusingly written (some might even say poorly written) contract . If you want to see their responses, hop on over to the MDX thread. In the meantime, perhaps others might see our posts here and chime in.  Here below is a copy of my post:

    "... after having inquired of several managers/salespeople about the "ONEPAY" lease, it's clear each has a different understanding of the lessees exposure, should the vehicle get totaled. (in fact, astoundingly quite a few are mostly if not entirely unfamiliar with the product, even though there's a webpage on Acura's website offering it!). The most recent sales manager with whom I inquired used to be a finance manager for many years, and he said that after reading the "vague" contract over and over, and then requesting clarification from AFS, but with no clear resolution to the inherent ambiguity, he cannot in good conscience offer the product!

    This is NOT just a gap coverage issue, and I hope those of you, who have a deep, and detailed, understanding of leasing contracts, - any attorneys out there? - can clarify.

    I've looked at the contract and it sure seems in contrast to what one should expect (i.e.: Essentially, if the vehicle got totalled prior to end of lease, Acura should be entitled to lease payoff amount (Residual) plus perhaps sales tax on that residual and that would be about it.  They've already received all 36 months of lease payments up front. So, if my insurance pays properly for the current market value of the vehicle, there should be a fair amount of overage coming back to me, especially if the loss occurrs during the early months of the lease, correct???   If so, damned if I see anything in the OnePay contract that remotely agrees with that.  In fact, quite the opposite; it almost sounds like they make out like bandits in such a scenario.  Anyone here familiar with the contact and/or whether I am misunderstanding the concept?  I feel like I must be! I really like the idea of a onepay, but not if I am seriously exposed. I sure do miss the days when you could simply buy down the money factor with multiple security deposits; that was a no brainer with zero added exposure."
  • MichaellMichaell ColoradoPosts: 107,413
    I don't understand how anyone can think that a one-pay lease puts you at risk. Yes, you've put all your payment money up front, at a reduced MF rate (.00080 savings for Honda / Acura).

    Look at a traditional lease. You contract to making 36 payments, and you send that money in monthly. After 12 payments, the car gets totaled. The insurance company pays off the remaining obligation - you don't have to make the other 24 payments.

    As my co-host noted in the other thread, a one-pay works almost the same way - except the money is held in an escrow account. The payments are still made, each month. After 12 months, car gets totaled. Insurnace company pays off the obligation, and you don't make the remaining 24 payments.

    But wait! You've already deposited that money. It should, as I see it, get refunded to you. Should not be any risk.

    Compare this to a large down payment made at the beginning of the lease. It doesn't reduce the amount paid by the insurance company to the lease company to satisfy the obligation, and you don't get that down payment back. Which is why we suggest avoiding it.

    Did you get a good deal? Be sure to come back and let us know! Post a pic of your new purchase or lease!


    MODERATOR

    2016 VW Jetta 1.4T SE / 2015 Subaru Outback 3.6R / 2014 MINI Countryman S ALL4

  • Thanks very much Michaell,

    So long as it works that way {in essence, drawing payments monthly from a virtual "escrow account"), I would be perfectly happy with that arrangement. The concern is that the actual OnePay lease contract doesn't seem to even begin to describe the agreement structure in that manner. That, along with the fact, as I mentioned previously, that the sales manager (former finance manager) at a major Acura dealership feels the contract is so bad that he won't even promote it in good conscience, causes me significant concern. Furthermore, a seasoned Acura salesperson also expressed his understanding that the risk was indeed significant (akin to putting down a very large down-payment, which just as you advise, I have never done and never will), though he had no first hand experience in ever seeing it put to the test.

    If Acura wants this product utilized, I would think they'd make sure their representatives were informed and comfortable with it. I REALLY would like to proceed with obtaining the vehicle this way, but l'm sure you can appreciate why my hesitation, given these comments. That's why I am hoping that rare needle in a haystack someone who has actually had the misfortune to have put this particular OnePay lease to the test, is reading this forum and might verify that the situation was handled as one woukd hope and expect, just as you say, and as I naturally assuned until encountering these other perspectives.

    In light of what you've emphatically written (very much appreciated) I'm going to reread the contract tomorrow and hope I glean a better understanding of it, and divine the structure you mention, which has thus far eluded me when I read it.

    Again, thanks for the follow up. Any other thoughts or suggestions would be most welcomed.

    I will update the forum if/when I make any headway, or have additional information to share.

    Have a nice evening.
  • MichaellMichaell ColoradoPosts: 107,413
    remremrem said:

    Thanks very much Michaell,

    So long as it works that way {in essence, drawing payments monthly from a virtual "escrow account"), I would be perfectly happy with that arrangement. The concern is that the actual OnePay lease contract doesn't seem to even begin to describe the agreement structure in that manner. That, along with the fact, as I mentioned previously, that the sales manager (former finance manager) at a major Acura dealership feels the contract is so bad that he won't even promote it in good conscience, causes me significant concern. Furthermore, a seasoned Acura salesperson also expressed his understanding that the risk was indeed significant (akin to putting down a very large down-payment, which just as you advise, I have never done and never will), though he had no first hand experience in ever seeing it put to the test.

    If Acura wants this product utilized, I would think they'd make sure their representatives were informed and comfortable with it. I REALLY would like to proceed with obtaining the vehicle this way, but l'm sure you can appreciate why my hesitation, given these comments. That's why I am hoping that rare needle in a haystack someone who has actually had the misfortune to have put this particular OnePay lease to the test, is reading this forum and might verify that the situation was handled as one woukd hope and expect, just as you say, and as I naturally assuned until encountering these other perspectives.

    In light of what you've emphatically written (very much appreciated) I'm going to reread the contract tomorrow and hope I glean a better understanding of it, and divine the structure you mention, which has thus far eluded me when I read it.

    Again, thanks for the follow up. Any other thoughts or suggestions would be most welcomed.

    I will update the forum if/when I make any headway, or have additional information to share.

    Have a nice evening.

    The only thing I would suggest is to discuss this with a different dealer.

    Did you get a good deal? Be sure to come back and let us know! Post a pic of your new purchase or lease!


    MODERATOR

    2016 VW Jetta 1.4T SE / 2015 Subaru Outback 3.6R / 2014 MINI Countryman S ALL4

  • J_BoxerJ_Boxer KentuckyPosts: 7
    edited February 15
    remremrem, we had/have the exact same situation. However, my cause for concern started to occur after I signed my One Pay $12,000 18k/y 36m. Prior to the deal I immersed myself with research to make sure I would know exactly what I was getting into and what to look for. After the deal is when I started to get concerned b/c my understanding was that just like a traditional 36m lease, if you have a total loss, say in the 3rd month then insurance and gap would cover the details and differences and you would go on your merry way with no more payments to be concerned with. Then I started getting conflicting info. from different sites and articles. Some Brands have the provision written in the contract like MB, Audi just to name a few. So to my surprise when i checked my contract there was NO verbiage whatsoever regarding one pay leases. NOTHING! I thought this was odd. I know that a ONE pay was not supposed to be "like putting Down a Huge downpayment, which is what most know to be a bad idea. Now as I'm getting info filtering in and the Sales Manager is giving me the positive BS info narrative so as not to actually respond to my question with the exact answer i'm looking for. Even 4 calls to HFS was proof that One Pay is NOT common knowledge to even HFS when it comes some intricacies. So the fact that my Sales Manager and FI guy didn't end up having a clue then I was getting worried. If it tells you how little they know sometimes, the FI guy actually printed and had me sign the wrong kind of contract so that is why my original contract listed nothing of the one pay lease and structure. I am actually going to the dealer in a day or so to redo the contract with the correct One Pay lease agreement. The fact that when I brought all of this up and even about the original contract, no one could give me answers. Don't get me wrong, I got an amazing deal, a unicorn deal, on a 2018 Touring 1.5L. $12,000 18k/yr 36m single pay or one pay lease.
    I had a tremendous back and forth with the Sales manager at the dealership and no one had a clear cut answer. I needed a precise answer b/c these can be precise circumstances. I realize that One Pay leases aren't nearly as common, but someone at the dealership should know their services better and can advocate for the customer. I did end up finally getting an answer from Honda Financial services after 5 calls. In a nutshell it was explained that indeed a One Pay lease by Honda Financial services does indeed have financial protection in a way that could be said to be similar to a traditional 36m lease. I can't remember the exact verbiage but it was a TREMENDOUS weight lifted knowing that in the event of a total loss, especially early on, that I wouldn't lose out on a tremendous amount of my One pay money.

    So while I can't say that I have put the OP to the test but I finally got the accurate information. This is still alarming that so many Sales and managers dont' have the accurate information. Just doesn't set a good rapport. But I had a back up anyway to protect myself in the event that I would possible get hosed by the One Pay. My insurance has there own GAP and New Car replacement and it's cheap. $16 every 6mo for 6 payments totaling $96. In the event of a total loss or so on, they would replace the amount you paid for the car and then some. This is within the 1st year only. That is actually even better than the coverage provided by the Gap on Honda Fina. serv leases. But they already have GAP built in sooooo.
    Hope you can sort through this diatribe and if you have any other questions or want to see my lease deal final worksheet I am happy to share.

    As they are both HFS I think, there should be that consistency across the brands but I can't say for sure.
    As to what the other guy says about One Pay, while I agree with the sentiment... It's hard to not have doubt and concern when the "experts" that you rely on to be able to give you accurate information re : their products can't really give you an answer that seems accurate or remotely sensible. In my case, I didn't even get the correct contracts if that tells you anything!

    ******Agreed

    If Acura wants this product utilized, I would think they'd make sure their representatives were informed and comfortable with it. I REALLY would like to proceed with obtaining the vehicle this way, but l'm sure you can appreciate why my hesitation, given these comments. That's why I am hoping that rare needle in a haystack someone who has actually had the misfortune to have put this particular OnePay lease to the test, is reading this forum and might verify that the situation was handled as one would hope and expect, just as you say, and as I naturally assuned until encountering these other perspectives.

    In light of what you've emphatically written (very much appreciated) I'm going to reread the contract tomorrow and hope I glean a better understanding of it, and divine the structure you mention, which has thus far eluded me when I read it.

    Again, thanks for the follow up. Any other thoughts or suggestions would be most welcomed.

    I will update the forum if/when I make any headway, or have additional information to share.

    Have a nice evening.


  • J_BoxerJ_Boxer KentuckyPosts: 7
    edited February 15
    Michaell said:

    I don't understand how anyone can think that a one-pay lease puts you at risk.

    Interesting comment and perspective. I'm guessing you have a few experiences with these leases?
    I think the confusion comes more from the experts and dealers not knowing more and therefore misleading or confusing the customer and not understanding the concept but then getting constantly conflicting information.
  • MichaellMichaell ColoradoPosts: 107,413
    J_Boxer said:

    Michaell said:

    I don't understand how anyone can think that a one-pay lease puts you at risk.

    Interesting comment and perspective. I'm guessing you have a few experiences with these leases?
    I think the confusion comes more from the experts and dealers not knowing more and therefore misleading or confusing the customer and not understanding the concept but then getting constantly conflicting information.
    I've never been involved with a one pay lease.

    I've never read a contract from any captive bank about a one pay lease.

    Guess I've always assumed there was no risk.

    Looks like the posters here have, ultimately, proved me right.

    Like MSDs, one-pay is a way to reduce the MF and the rent charge you pay for a lease, in exchange for a bunch of up front money.

    I will agree that there are a lot of uninformed and misinformed finance folks at dealers across the country who are not aware of these products, or, if they are aware of them, don't know as much as they should.

    To me, that is on the captive banks (HFS or AFS) to train them correctly about these.

    However, given the turnover in these positions (remember, the F&I person is nothing more than a salesperson), I don't think it's cost effective to continually train these people.

    Did you get a good deal? Be sure to come back and let us know! Post a pic of your new purchase or lease!


    MODERATOR

    2016 VW Jetta 1.4T SE / 2015 Subaru Outback 3.6R / 2014 MINI Countryman S ALL4

  • J_BoxerJ_Boxer KentuckyPosts: 7
    Exactly the reason why you must be your own advocate! Even though I had concerns with my One Pay, HFS finally gave me the answer that I had been hoping for. So yeah, you were right! :-)
  • kyfdxkyfdx Posts: 116,523
    J_Boxer said:

    Exactly the reason why you must be your own advocate! Even though I had concerns with my One Pay, HFS finally gave me the answer that I had been hoping for. So yeah, you were right! :-)

    Naturally.. ;)

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

    Edmunds Moderator

  • J_BoxerJ_Boxer KentuckyPosts: 7
    As I mentioned, I have been informed that theContractAnd lease agreement I signedWas printed on the wrong contract and lease agreement. In looking they were printed on the documents that are set up for a traditional lease and should have been printed with/on a document meant for a one pay. The F&I guy said that HFS rejected the contract or something to that effect. Now because of his and the sales managers mistake, I have to drive all the way to the dealership to resign the contract and lease agreement. This is approximately a 2 hour roundtrip and additional mileage against my lease. At this point they have not offered anything in the way of concession for the inconvenience. That aside, my question is if for some reason I decided that I didn't want the car anymore or wanted to lease an Acura, do I have any legal obligation to this car? They cashed the check and I did have intent in signing a lease for this car. So legally speaking what options do I have since they do not have a correct lease agreement and contract signed?
  • Thank you all for your input and lively insights and debate of this subject. As I wrote last night, I was going to reread the contract again today to see if I might better grasp its explanation of how it would handle a total loss.

    First of all, it clearly states it is a Honda Financial Services product, so we can eliminate the question of whether there is any difference in contracts between a Honda or Acura vehicle - there isn’t.

    I have now done that and all I can say is WOW! (my brother is an attorney, but our family doesn’t hold that against him ;) , and I wouldn’t even think of asking him to review this and render an opinion, since I love him and wouldn’t want to cause him the inevitable migraine it would surely produce!)

    So as not to make this post unnecessarily lengthy or any more complex than it already is, I will simply refer to the applicable sections of the contract below, which I know that at least the O.P. (J_Boxer) has/will be signing, and prospective OnePay lessees can request from their dealer and review it too, and perhaps we can just go from there in case anyone’s interested in getting to the bottom of all this:

    Essentially, the language is extremely convoluted and circular in nature (and I think contradictory and conflicting, as well), when addressing the matter of a total loss. Any chance of untangling it requires reading ALL the following, and I suggest for the greatest chance of comprehension they be read in the following order:

    Paragraph 37 (line “f”, and “k”, and under “REMEDIES” lines “a” through “f”)
    Paragraph 38
    Paragraph 30
    Paragraph 28
    Paragraph 31
    Paragraph 39 (in its entirety, but paying particular attention to the first 4 lines, and then to the “EXCLUSIONS” section lines “d” and “e”.
    Paragraph 47 (first 3 lines)


    Isn't that ridiculous?! It sure as hell is, but believe it or not they all apply and refer back to each other for just this one issue, and creates one of the biggest contract cluster ****’s I have ever seen, and I have seen a lot, including 4 decades of conventional lease agreements.

    Does one simply swallow hard, close his/her eyes and sign the thing, just hoping it all works out should the worst come to pass? Maybe, and perhaps that’s what ultimately I will do. Who knows, maybe that’s what they want and why they did this.

    Regardless, there remains no doubt in my mind, whether by purposeful intent, or by incredible incompetence and ego, that the Honda legal department is clearly the culprit in all of this. I now conclude there is not one sales manager, finance manager, salesperson, general manager, corporate officer, or even forum moderator B) ,who should be expected to truly understand and attempt to interpret and explain this document. It’s not their fault and they’ve been put in an untenable position.

    Perhaps Shakespeare had it right (with some family exceptions of course) :D
  • MichaellMichaell ColoradoPosts: 107,413
    J_Boxer said:

    As I mentioned, I have been informed that theContractAnd lease agreement I signedWas printed on the wrong contract and lease agreement. In looking they were printed on the documents that are set up for a traditional lease and should have been printed with/on a document meant for a one pay. The F&I guy said that HFS rejected the contract or something to that effect. Now because of his and the sales managers mistake, I have to drive all the way to the dealership to resign the contract and lease agreement. This is approximately a 2 hour roundtrip and additional mileage against my lease. At this point they have not offered anything in the way of concession for the inconvenience. That aside, my question is if for some reason I decided that I didn't want the car anymore or wanted to lease an Acura, do I have any legal obligation to this car? They cashed the check and I did have intent in signing a lease for this car. So legally speaking what options do I have since they do not have a correct lease agreement and contract signed?

    If you do not have a contract in place, then you should be able to "unwind" the deal and start over with a different car, or brand.

    Did you get a good deal? Be sure to come back and let us know! Post a pic of your new purchase or lease!


    MODERATOR

    2016 VW Jetta 1.4T SE / 2015 Subaru Outback 3.6R / 2014 MINI Countryman S ALL4

  • Hi J BOXER,
    I just saw your post and don't know if you should feel angry or lucky (see my recent post)! Seriously, you should be pissed and they should bend over backwards to make you happy, but I have no idea of their legal obligations. Perhaps an attorney will chime in. I just wanted to say, that if you still want the OnePay contract, it's ENTITLED (or at least the ACURA VERSION for Florida is): ACURA LUXURY LEASE / CLOSED-END VEHICLE LEASE AGREEMENT SINGLE PAYMENT LEASE - FLORIDA / Acura Financial Services. I assumed (based on your original post) that you were being offered the identical agreement, only with a Honda logo instead. Also, only just now did I notice the reference to Florida, so now I'm wondering if there are actually different versions out there, contrary to my original assumptions. The plot thickens! Really hope they find a way to make things right for you, without any hassle or push-back. Good luck, and let us know how it all turns out.
  • kyfdxkyfdx Posts: 116,523
    Just to be clear: We don't give legal advice

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

    Edmunds Moderator

  • remremremremremrem Posts: 27
    edited February 15
    Understood, and your need to make that WRITTEN disclaimer, since as I've been saying, it's only what's in writing that really counts if the s*** ever hits the fan! That's why I made a point about EVEN forum moderators can't be expected to decipher this particularly obscene contract.

    However, and I hope you agree, that opinions and experiences from all should be encouraged to be shared to try to shed some more light on this rarely discussed and mostly misunderstood corner of the auto leasing experience. Here's hoping to many more informative and interesting future posts on the topic.
    Respectfully and gratefully,
    remremrem
  • remremremremremrem Posts: 27
    edited February 17
    Hi again guys,

    For those (few?) of you who have interest in this subject, I have now just about concluded my research, as well pretty much come to a decision NOT to pursue this method, as it appears it DOES in fact subject the lessee to significant financial exposure should the vehicle be totaled (GAP coverage or not), just in the same way as if one were to put down a large down-payment in a traditional lease (a universally agreed "no-no"). Of course, my information COULD be wrong, and I HAVE found more conflicting data, but I've done a fairly exhaustive search on the subject, and read enough by various independent experts to develop a consensus and bring me to this point.

    Another unexpected bit of information on the subject is that there are 2 common methods in which OnePay leases can be calculated, and one method can save much more money than the other, but as consumers we don't get to pick which method a particular manufacturer uses, and guess which one most are going to use!?

    Regardless, unless the particular manufacturer's contract specifically and clearly shows that the exposure is eliminated; perhaps by employing the virtual" escrow account" method to which Michaell alluded (not that I would expect them to use such clear understandable terminology as his), then I think there is good reason to err on the side of caution and avoid the significant risk that could represent the loss of a great deal of money, all in exchange for what might not actually amount to a reasonable amount of savings in the long run, once all the factors have been taken into account and the math has been done.

    I am including here below 2 links. I hope this is not a violation of forum rules, and if it is I apologize and will understand if the moderators have to delete them, but I request that they leave the rest of this post intact. If nothing else, a simple internet search for the term "One Payment Auto Lease" should take you to the most important of places I've now been.

    This first link below is an overview page on the subject, and it contains within quite a few direct links to various car manufacturer's OnePay lease specific pages (including Honda's and Acura's), as well as various car information sites (including Edmund's) specific explanation pages on this subject:

    https://okinsurancequote.com/one-payment-auto-lease/

    This second link (see below) is to one of those particular linked pages, which I feel most clearly spells out in plain English the pros and cons of the OnePay approach in general, and makes no references to any particular manufacturer's version of the product, and seems to have no incentive to convince the reader one way or the other. It also explains the 2 different methods of calculation to which I referred above:

    https://leaseguide.com/articles/prepaid-lease/
    (Please pay particular attention to the section entitled "A possible disadvantage of pre-paid car leasing".)

    I truly hope this helps anyone here who finds themselves in the same dilemma, with which I have been struggling and trying to resolve this past week, at the expense of a great deal of time and confusion, not to mention having pestered the excellent moderators of this superb forum. Of course, I also hope that if anyone disagrees with my conclusion and has convincing information that I've misinterpreted what I've read, and that I am wrong about what I've written, PLEASE do not hesitate to set me straight! I've been wrong plenty of times before and will be again plenty of times in the future, and I'm always happy when someone PROVES me wrong. In this case I hope someone will and soon, since I was really hoping to proceed with this method to acquire my next vehicle!

    Thanks again to all!
  • kyfdxkyfdx Posts: 116,523
    They are wrong about the calculations on Method #2, stating there is no savings on finance charges. That doesn’t account for the lower money factor used for the one-pay lease. And, no bank I know of uses Method #1. It seems that method would certainly open you up to issues, in case of total loss, because you are specifically making a Cap cost reduction (according to their description), and not simply prepaying the payments.

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

    Edmunds Moderator

  • remremremremremrem Posts: 27
    edited February 18
    Thanks kyfdx,

    Interesting, and good to know, but do any of the other referenced sites (easily accessed via the first page link I inserted above) get it right? I see at least one of them explaining it in much the same way as the one I referenced above. If even the experts can't agree, what are we laymen supposed to do? Some of these concepts and math formulae are way above my (now aching) head :'(

    By the way, even Edmund's linked relevant page causes the careful reader concern (I have pasted the link here below for convenience), and though they don't go into a lot of detail, they do specifically advise that one should contact the lender to find out whether or not one will lose the remainder of their prepaid lease payments if the car is totaled:
    https://edmunds.com/car-leasing/5-car-lease-strategies-you-didnt-know-about.html Clearly the author(s) must have been aware of that potential when they penned that.

    Surely, all this inconsistency, even on the part of the educated and experienced online advising community must be based on something, and should be a cause for caution for the consumer and a need for further clarification, don't you think?

    Thanks again and am looking forward to further input.

    Regards,
    remremrem
  • cbrunson1cbrunson1 Posts: 30
    As the son, husband and father-in-law of lawyers, I can promise you that the longer a contract is, the more it benefits the company whose name is on the letterhead. If you don’t fully understand a contract, you shouldn’t sign it. And anything in writing takes precedence over something a nameless telephone voice from HFS told you. Most banks have teams of lawyers, so they can make it prohibitively expensive to assert and contest your rights.
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