| davidp74 |
Does anyone know if the following is a good lease deal? I just saw it on the Acura website and wasn't sure if this was really a good promotion. Thanks!
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2005 MDX SPECIAL AHFC LEASE/PURCHASE PLAN Terms Certificate
Special lease rates available on all new 2005 MDX models. FEATURED SPECIAL LEASE* : 2005 MDX V6 Automatic Transmission (Model YD1825JNW) for $399.00 per month for 36 months with a $1,599.00 capitalized cost reduction. $2,993.00 total due at lease signing (includes first month’s payment, security deposit, capitalized cost reduction and AHFC upfront acquisition fee; total net capitalized cost and base monthly payment does not include tax, license, registration, options and the like). Not all buyers may qualify. Subject to limited availability. *The specific featured lease listed is not available to New York residents. New York residents should contact their dealer for New York featured lease. Terms and conditions vary for New York Residents. In addition, AHFC limits leasing terms to 39 months or less to residents and dealers in the state of Rhode Island.
Offer valid through: 9/6/2005 |
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| JeffK |
Just went to the Acura web site and could not find the deal. (Did see a deal on the RL, but after CONSUMER REPORTS slammed the RL, I believe we will see even better deals)
But without knowing the residual impossible to determine if deal is good, bad or indifferent.
JeffK |
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| JeffK |
Found it! Here are the details:
Special lease rates available on all new 2005 MDX models. FEATURED SPECIAL LEASE* : 2005 MDX V6 Automatic Transmission (Model YD1825JNW) for $399.00 per month for 36 months with a $1,599.00 capitalized cost reduction. $2,993.00 total due at lease signing (includes first month’s payment, security deposit, capitalized cost reduction and AHFC upfront acquisition fee; total net capitalized cost and base monthly payment does not include tax, license, registration, options and the like). Not all buyers may qualify. Subject to limited availability. *The specific featured lease listed is not available to New York residents. New York residents should contact their dealer for New York featured lease. Terms and conditions vary for New York Residents. In addition, AHFC limits leasing terms to 39 months or less to residents and dealers in the state of Rhode Island.
Offer valid from 07/06/2005 through 09/06/2005 for new and unregistered vehicles only and only on approved credit by HFS (Honda Financial Services) through participating dealers. HFS' standard credit criteria apply. FEATURED SPECIAL LEASE: 2005 MDX V6 Automatic Transmission (Model YD1825JNW). MSRP $37,470.00 (includes destination). Actual net capitalized cost $33,602.72. Dealer participation may affect actual payment. Taxes, license, title, registration, documentation fees, options and insurance extra. Total monthly payments $14,364.00. Option to purchase at lease end $22,856.70. Lessee responsible for maintenance, excessive wear/tear and 15¢/mile over 12,000 miles/year. SEE DEALER FOR DETAILS. The specific featured lease listed is not available to New York residents. NY residents should contact their dealer for NY featured lease. Terms and conditions vary for NY Residents. In addition, HFS limits leasing terms to 39 months or less to residents and dealers in the state of Rhode Island.
Here is the problem:
The invoice price on the car is $33,812. Others have posted that there presently is a $1500 rebate, which then reduces invoice to 32,312. The net capitalized cost see above is $33,602 which is then $1290 above invoice.
For a year end model, I do not think you should pay above invoice.
JeffK |
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| davidp74 |
| Thanks! Do you think it's worth then to see what changes they make on the 2006 model? |
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| JeffK |
Here is reality:
When you lease, the difference between a 2005 and 2006 is minimal. This is because while the 2005 are usually offered at invoice, this savings is offset by the much higher residuals on the new (2006) model.
What makes a decision now difficult is the additional $1500 rebate. On a 48 month lease this is a savings of about $35 per month.
If the 2006 are discounted, and I suspect they will be, the 2006 will in fact be cheaper to lease than the 2005.
The only savings lost will be the $1500 rebate. So the final savings will be less than $35 per month, probably in the neighborhood of $25 per month.
$25 per month for 48 months is $1200.
I for one would rather pay the extra for the 2006.
On the other hand, if I were buying (but if you have read my posts I do not buy) then a 2005 makes sense over a 2006.
But with rebates and discounting, this is not a car to buy but one to lease! The resale value of the MDX is getting killed because of the rebates and heavy discounting.
As long as the pricing on the MDX stays soft (and with rising gasoline prices and increased competition - Ford, GM and Saab - can Subaru owned by GM be far behind giving employee pricing to the general public) resale will be hurt.
The MDX is truly a depreciating asset - one to lease not own!
JeffK |
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| davidp74 |
| Thanks a million got your input! It was extremely helpful. I think I'll wait another month or 2 for the 2006 model and see what it's like. |
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| craigerd2 |
Hmm, not to get too technical, but the lease rates are based on residuals along with the cost of money, term and capitilized cost. If the MDX depreciates as quickly as you say, the lease rate will be higher to compensate. That's why leasing very high end cars that have lower than normal depreciation can be a good decision. Of course this assumes that the lessor is using real depreciation rates. Divide the residual by the capitlized cost to determine the depreciation and compare it to real world used car rates to determine what rate the lessor is assuming. BTW, 99% of all cars depreciate so this fact by itself is not enough to make a buy/lease decision. It normally comes down to how long you intend to own it. Me, I own 4 cars and have not had a payment in 10 years :) so leasing for me would most likely be a wrong decision.
PS: This looks like a non-touring low end model lease which IMO will depreciate quicker since there is less demand for this model.
cd
quote:
Originally posted by JeffK
Here is reality:
When you lease, the difference between a 2005 and 2006 is minimal. This is because while the 2005 are usually offered at invoice, this savings is offset by the much higher residuals on the new (2006) model.
What makes a decision now difficult is the additional $1500 rebate. On a 48 month lease this is a savings of about $35 per month.
If the 2006 are discounted, and I suspect they will be, the 2006 will in fact be cheaper to lease than the 2005.
The only savings lost will be the $1500 rebate. So the final savings will be less than $35 per month, probably in the neighborhood of $25 per month.
$25 per month for 48 months is $1200.
I for one would rather pay the extra for the 2006.
On the other hand, if I were buying (but if you have read my posts I do not buy) then a 2005 makes sense over a 2006.
But with rebates and discounting, this is not a car to buy but one to lease! The resale value of the MDX is getting killed because of the rebates and heavy discounting.
As long as the pricing on the MDX stays soft (and with rising gasoline prices and increased competition - Ford, GM and Saab - can Subaru owned by GM be far behind giving employee pricing to the general public) resale will be hurt.
The MDX is truly a depreciating asset - one to lease not own!
JeffK
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| JeffK |
A few points, and I hope I am not repeating myself:
Most leases are subsidized: That means that the residuals are artificially high. So at the end of the lease, most people turn in their cars because the buy back is higher than the value of the car.
If you think about that for a moment, that means that the depreciation component of the lease payment was not sufficient to cover the actual depreciation!. What a great position to be in - paying for only part of the depreciation, vs paying the entire depreciation if you owned.
By way of example, my nephew leased a 2001 WRX when it first came out. The residual, i.e. buy back was close to $16,000. The cap cost, what he paid for in leasing was about $25,000 so he had $3,000 per year $250 per month depreciation in his lease payment.
At the end of the lease he contacted Subaru and they reduced the buy back to $12,000!. Now if he owned the WRX his depreciation over the same period would have been $13,000 ($25,000 less $12,000) or $361 per month!. So by leasing he saved over $100 per month vs buying!
BTW, the base MDX has a higher residual than the premium models - not the reverse as you suggest. Again I have posted on this subject. The reason is clear - the extra cost of the premium model is not recovered on resale. When I leased the difference was 4% over 48 months.
So your basic car, without options, will always hold a higher percentage of cost than a fully loaded car.
JeffK |
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| alphaforcex |
quote:
Originally posted by JeffK
So your basic car, without options, will always hold a higher percentage of cost than a fully loaded car.
That's why I don't understand people keep saying adding navi or any accessories will increase the resale value of the vehicle?! Well, it does increase the resale value in a way...I guess when you don't count the money spent on the accessories towards the cost of the vehicle...:confused: |
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| craigerd2 |
quote:
Originally posted by JeffK
A few points, and I hope I am not repeating myself:
snip
JeffK
You appear to pontficate quite a bit @ leasing........to each their own. You consistently seem to be saying leasing is better than buying which is not always the case.
As for base vs other, please show your source for residuals on base vs touring straight up with no subsidies.
As to, do options slow the depreciation, the answer is maybe. It depends on what options you have and what the demand is for those options in the used market.
Cheers |
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| JeffK |
Dear craigerd2
The residuals are based on American Honda Corp Financial.
Please advise when financially buying is better than leasing. But before you post, suggest you read the many post on leasing, especially the parts on use of money.
You posted:
As to, do options slow the depreciation, the answer is maybe
No you are wrong. The more options, the greater the rate of depreciation.
JeffK |
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| pak8shun88us |
| Jeff, how do you make sure the dealers aren't inflating the interest rate on a lease to offset the bogus over-inflated residual value? |
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| MDX88 |
craigerd2
http://forums.roadfly.com/forums/financing/
Go to the forum link I posted. There is a woman named Tarry who works for leasecompare.com. She posts, on request, the captive finance company lease rates (which the dealer can mark up if you're not careful) and the residuals. Jeff is correct that the base model has a higher residual than the navigation model. This makes sense considering how fast computer technology becomes obsolete. |
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| MDX88 |
From a post by Tarry at the Roadfly forum
ACURA Captive Lease Programs � Effective 8/5/2005
2005 Acura MDX 4dr Wagon Touring
24 mo/15k mi - 66% residual � Money Factor .00178 Base Rate
36 mo/15k mi - 57% residual � Money Factor .00178 Base Rate
48 mo/15k mi - 48% residual � Money Factor .00220 Base Rate
60 mo/15k mi - 39% residual � Money Factor .00425 Base Rate
24 mo/12k mi - 67% residual � Money Factor .00178 Base Rate
36 mo/12k mi - 59% residual � Money Factor .00178 Base Rate
48 mo/12k mi - 50% residual � Money Factor .00220 Base Rate
2005 Acura MDX 4dr Wagon Touring w/ NAV
24 mo/15k mi - 64% residual � Money Factor .00178 Base Rate
36 mo/15k mi - 56% residual � Money Factor .00178 Base Rate
48 mo/15k mi - 47% residual � Money Factor .00220 Base Rate
60 mo/15k mi - 38% residual � Money Factor .00425 Base Rate
24 mo/12k mi - 65% residual � Money Factor .00178 Base Rate
36 mo/12k mi - 58% residual � Money Factor .00178 Base Rate
48 mo/12k mi - 49% residual � Money Factor .00220 Base Rate
2005 Acura MDX 4dr Wagon Touring w/ RES
24 mo/15k mi - 64% residual � Money Factor .00178 Base Rate
36 mo/15k mi - 56% residual � Money Factor .00178 Base Rate
48 mo/15k mi - 47% residual � Money Factor .00220 Base Rate
60 mo/15k mi - 38% residual � Money Factor .00425 Base Rate
24 mo/12k mi - 65% residual � Money Factor .00178 Base Rate
36 mo/12k mi - 58% residual � Money Factor .00178 Base Rate
48 mo/12k mi - 49% residual � Money Factor .00220 Base Rate
Remember, the dealer does not have to give you the base rate. It is always best to compare other sources. You can do this through LeaseCompare.com.
Note: Regional rates may vary. |
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| pak8shun88us |
| Thanks! This is Great! |
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| stank67 |
For those interested we just got a base MDX for below invoice on a lease from Sunnyvale Acura. The lease were the exact money factors and residual from Honda.
I highly suggest Sunnyvale Acura using their internet manager Curtis Burnham. |
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| craigerd2 |
quote:
Originally posted by MDX88
craigerd2
http://forums.roadfly.com/forums/financing/
snip
Thank you for your reply. I have leased and bought before and am quite familiar with both sides. All my statements still hold true. I did not say that HFC would not offer better residuals for a non-touring, sorry if I mis-lead you.
For Jeff, my answer for buying was already stated. I own all my cars and plan to keep them, leasing would have been akin to suicide.
Leasing has and will continue to cater to those people who want a lifetime commitment to paying a car note.
A lot of leasses can't afford to buy or choose to drive outside their salary contraints. To make the argument that they will invest the money saved is borderline silly and then they end up terrified at lease end about mileage and wear and tear. For those who can afford to, they might want consider using an home equity loan, buy the car outright and pay interest only to their equity note holder owner and also write off all the interest.
Me, I love leased cars. I buy them when you turn them in. Still under warranty, most depreciation expelled.
cd |
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| JeffK |
Dear craigerd2
You really do not understand leasing: You posted:
Me, I love leased cars. I buy them when you turn them in. Still under warranty, most depreciation expelled.
Most leases are for the length of the warranty.
I have leased and bought before and am quite familiar with both sides. All my statements still hold true.
Then you post:
I own all my cars and plan to keep them, leasing would have been akin to suicide
When you buy a car you either pay up front and absorb the depreciation and lose the present value of money or borrow. Either way you have a yearly expense. Divide that yearly expense by twelve and you have a monthly expense.
The big advantage to leasing, is that the monthly expense is fixed.
You are all hung up on paying a monthly expense and are kidding yourself by thinking you are avoiding that expense when you buy.
Here is another fact: Anyone who bought an '03 at MSRP or an '04 a slight discount, has seen the value of their car plummet as the '05 are being offered at BELOW INVOICE!.
Those of us that leased are enjoying a much smaller real monthly expense as our residuals - which determines depreciation - are fixed.
Finally you post:
A lot of leases can't afford to buy or choose to drive outside their salary contraints.
If in fact this is happening, I agree with you - it is a recipe for disaster.
No different than borrowing above you means so you can drive your "Dream Car"', or trading house using interest only loans, hoping for a continuing upward spiral in housing prices.
Let's face it: A car is a depreciating asset: There is an old axiom that where possible you own an appreciating asset and rent a depreciating asset.
For all the reasons I have posted under leasing threads, I choose to rent a depreciating asset.
JeffK |
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| randoum |
JeffK,
Hard to send you a message directly, so I hope you get this. I need your knowledge, if you don't mind lending it, to pick apart a lease deal I have worked up. I would most appreciate it if you were able to tell me anything good/bad about the following deal I have been offered by Acura of Boston. I specifically came to this forum, because your knowledge is well known in other forums :)
Details:
2005 Acura TL w/ Navi (Auto)
MSRP: $35,670
Negotiated Price: $32,755
Money Factor: $.0026 / (6.24%?)
Residual: 55%
42 Month Lease
$407/mo PMT
Costs:
$595 Bank Fee
$198.75 Doc Fee
$407 - 1st Mo PMT
Cap Cost Red: $1799.25 (My choice, Cause I requested a total $3k out of pocket.)
I really hope you or someone could help me out with this. It would be very much appreciated. Credit came back Tier 2 - For some strange reason my Transunion and Experian scores differed DRASTICALLY! About 100 points - but when I pulled my credit myself from myfico.com, they were right about the same... I feel a bit uncomfortable with that, since I know I have good credit, yet their system has this huge range in points.
HELP! |
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| JeffK |
Dear randoum:
I just went to http://www.leaseguide.com/calc.htm
and with NO MONEY DOWN it calculates to $448.93 per month.
With $1799 down it comes to $401, so their price of $407 seems to be correct.
Two things I will mention:
As you know, I strongly urge you not to put any money down. If you check my prior posts you will see detailed reasoning, but basically if anything happens to your car during the term of the lease, if it is stolen or you are in an accident, your down payment is lost.
Second, I am not an expert on credit numbers - fortunately my credit is very, very high.
But more to the point, a money factor of .0024 (6.24%) in today's market is very, very high. This may be the best you can do, but I would try to do better.
Finally, I do not know the market for the TL, so I leave it to you to decide if the price is correct.
The balance of the charges seem to be in line.
Hope this helps.
JeffK |
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| randoum |
THANK YOU JEFFK!
Alright, I think the price is VERY fair. It's pretty much right at Invoice - They're going to get a holdback, but whatever - they need to make their money.
There will be no downpayment for this vehicle, maybe it's because I was a previous AHFC customer?
You say that the interest rate is high, I AGREE! How can I deal with ANYONE on getting a lower rate though? IT kills me that I can't know what AHFC rates are and how all that works. I just don't believe this is the lowest rate I qualify for - Any suggestions?
Do you think I should have to pay that DOC fee by the way? I see many people actually do not pay it.
Thank you!!!!!! |
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| JeffK |
If you are a former AHC customer, go directly to them to find out the actual rate and how you can get a lower rate.
I think in this thread there are residuals and interest rates for the MDX.
I would check to see if the rates for the TL are the same, more or less.
Again, pay the $448 and keep the $1799 in your pocket!
JeffK |
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| randoum |
Thanks again Jeff!
How can I get this information direct from Honda? I wouldn't even know where to begin..
I'm thinking residuals are correct for this vehicle.. At 55%
Regarding the 1799.... The way I look at it is this:
Without the downpayment of $1799, the payment would be around: $448...
With downpayment, payments are $407...
Well, there is a $41 difference there...
$41 x 42 months = $1722...
SO either way, they are going to get this money from me. I'd prefer for them to take less up front, thus I live the theory of lower payments and investing the rest :)
Your thoughts on how I can get info direct from Honda would be great!!! THank yoU! |
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| JeffK |
$1799 @ 5% for 3.5 years is $301.
That is your cost - opportunity cost or cost of money - you are losing by making a down payment of $1799.
Plus, and this is important, if you car is stolen or totaled, you lose not only the interest, $301, but the principal, $1799 for a total loss of $2100!.
Of course the loss will be less if you earn less than 5% on the $1799 and more if you earn more on the $1799.
As to how to find lease money factors, try contacting MDX88 who posted residual and lease rates in this thread.
I am sure he will be helpful!
JeffK |
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| randoum |
Thanks for all your help JeffK, I have contacted the other person regarding Money Factor/REsiduals..
On another note - What do you think about Doc Fee's? Should I ask them to waive this fee? Most of Acura's ad's for leases don't show a doc fee... I wonder if this fee is waivable, what do you think.
And another note, I tried plugging the numbers I gave you on the LeaseGuide.com lease calculator and I could not get the numbers to even spit back $401 - Why do you think I can't get it to come to $407 like they say it is? Are they getting more money from me somewhere? Thanks for your input!! |
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| JeffK |
Lease doc fee: No harm in asking.
For Leaseguide.com I used:
MSRP: $35,670
Cap cost: $32,75
Term: 42 months
Residual: 55%
Money factor .0026
Cap cost reduction: $1799
Lease payment: $401
JeffK |
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