| JeffK |
Just pulled the trigger on an '06 Premium (base) MDX.
Went back to my local dealer who has treated me quite well (loaner car and good service).
Without any negotiation, his selling price was tissue $34,129, less rebate of $2500 less $495 of his rebate, final price $31,134.
Even though the residuals changed on September 5, 2006, to 53% for 36 months, 12,000 miles per year, I went with this lease.
Bank fee was $595.
Best of all, my present lease runs out October 31, 2006, and dealer agreed to hold my car until then, so that new lease starts on October 31, 2006.
JeffK |
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| SDTS |
Congrats!!!!
Question.....this lease holding thing.....how are they able to guarantee you the residual %s and rates all the way through October 31st? |
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| JeffK |
Check your lease fact sheets with Honda Financial (HVT). The rebates, residual and money factor are through October 31, 2006.
JeffK |
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| one4gatr |
So if I understand you the residual would be 16501 not counting TTT? So you are financing 14632 right? And at what money factor? I have followed your threads pretty closely but am still not 100% sure I have the math right.
Thanks |
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| JeffK |
No, the residual is a percentage of the MSRP, not the negotiated price.
The MSRP is $37,740, 53% is 20,002. The residual or "buy back" is $20,002.
Thanks for reading my prior posts! Hope this clarifies.
JeffK |
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| socalJD |
So you let the dealer keep $620 of the holdback, seems fair to me.
What color combo - are you trying something new ???
Does the 36mo work better than the 48mo lease ?
I see that the wife's input was the kiss of death for the Pilot . . . ;) |
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| JeffK |
Dear SocalJD
You posted:
So you let the dealer keep $620 of the holdback, seems fair to me.
When I realized he was giving me part of his holdback (without any negotiation), I was afraid to ask for more! Maybe I could have done better, but when he was willing to hold the car until October 31, 2006 when my lease on the '03 runs out, I thought he deserved some of the holdback!
What color combo - are you trying something new ???
Nope, staying with the same silver/ebony combination! I do a lot of skiing and this color shows very little dirt on either the inside or the outside. Besides, I liked my '03 so much, I just decided to get the same thing all over again. This way I will be able to find it in the parking lot!
Does the 36mo work better than the 48mo lease ?
No actually the 42 month lease with a 49% residual was $15 per month cheaper. But with 42 months there is a chance of new brakes and/or tires that would eat up the savings. But the real reason is that I want the new MDX so I wanted to go shorter. Also while the car might be discounted in March when a 42 month lease would end, the residuals are higher at the beginning of the model year when a 36 month lease will run out, so when it comes time to replace my '06, I should be able to get into a new lease at the same price, but 6 months sooner. Also, I am no youngster and want to have as many new cars as I can over the next 10 to 15 years! (At least that is what my wife says I should do!)
I see that the wife's input was the kiss of death for the Pilot . . .
Actually, what she said was that she was going to get a sign for the Pilot and put it in the window. It would say:
"I know it is ugly, but I saved $30 a month over an MDX"
Believe it or not - this is the truth!
To make her feel good, I did not mention that:
1) The rebates on the '06 Pilot were reduced from $3,000 to $2,500;
2) The new '07 Pilots are in the dealers now, and that by the end of October, there will be no '06's left.
So an '07 Pilot would lease out for about the same as an '06 MDX and after looking at the Pilot are reading about the handling differences I just decided to stay with the MDX.
Thanks for the laughs!
JeffK |
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| SDTS |
Residual %'s and money factors never have expiration dates. Honda can change them at any time they desire. They only have "starting dates" unless they are a "special lease", which there are no special leases in California anyways.
That is why I was curious as to how they were guaranteeing you this lease almost two months from now. I would never be able to do the deal with that guarantee. Wish I could...I get a lot of people in your spot that would LOVE to have that type of arrangement. |
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| JeffK |
Suggest you check with your sales manager.
The new rates are effective as of 9/6 and are good through 10/31.
This is normal. Money factor and residuals are normally for 60 days. What did change is that the rebate of $2,500 is now also for 60 days, when before it was only for 30 days.
BTW, I made the deal now as my dealer is getting in the last of the '06 within the next 3 weeks.
Starting with October he is getting in '07.
He has only one silver/ebony which I leased.
JeffK |
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| one4gatr |
quote:
Originally posted by JeffK
No, the residual is a percentage of the MSRP, not the negotiated price.
The MSRP is $37,740, 53% is 20,002. The residual or "buy back" is $20,002.
Thanks for reading my prior posts! Hope this clarifies.
JeffK
I think so... let me rephrase it... the residuals are based upon actual MSRP's not negotiated price... But your payments are based upon the difference between residual and actual negotiated amount (i think). So in your case the spread is roughly $11132 over 36 months at whatever money factor/rate plus taxes?
I am anywhere close here? |
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| SDTS |
JeffK-
Please..we have made great strides......I have told you I am a Sales Manager. Our rates DO NOT HAVE EXPIRATION DATES. they have beginning dates and they actually change more on a monthly basis than a bi monthly basis. If you have a fax machine, I will happily fax you copies of our rate sheets and you can see for yourself that they do not have expiration dates, only beginning dates The only programs they have that have expiration dates are special programs. Hopefully, for your sake, the rate sheets are different in the East Coast and this dealer will be able to honor this contract of yours not starting till OCt 31st.
Your deal you made is EXTREMELY unordinary. The fact that this dealer is willing to sit on your car for this long when they could have easily sold it to someone else in that time frame, surely makes it sound as though your loyalty to them is veryimportant to them and special. I don't think you could find a dealer around these parts that would even consider it. |
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| JeffK |
Actually, I believe the deal they gave me, tissue, less rebate plus part of the holdback is for everyone. I am not special.
What helped me personally was writing the lease as of October 31 instead of September 30.
This is a "drive and sign" deal, so all I paid (I put this down yesterday) is first month, license plates, etc., total $633.
As you have confirmed there is no expiration on either the money factor or residual.
I guess my dealer is confident that the money factor will not go up before 10/31 and as I posted, the residuals did in fact go down on 9/5, so it highly unlikely they will go down further.
Finally, they are getting in about 10 '06's through September. Thereafter, starting in October only '07's.
I guess their thinking is to have every '06 sold before the '07 arrive. They did not lose money on my sale, maybe made a little bit less. There only additional cost is the floor plan cost for a couple of weeks in October.
But they did take my deposit and they know the sale is done.
The old saying: "A bird in the hand is worth two in the bush".
Finally, the thinking on the East cost may be different than on the West coast. This would not be the first time.
If you remember, several months ago, you pointed out that on the used market, MDX's were bring 10 to 15% more on the West Coast than on the East Coast.
So I may have been in the right place at the right time.
JeffK |
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| JeffK |
Dear one4gatr
There are two components in every lease: Depreciation and interest.
The depreciation is the difference between the cap cost (negotiated price) and the residual or buy back.
In my case the depreciation is equal to the cap cost, $31,134 less the residual of $20,002, $11,132.
However I "rolled" into the lease the bank fee of $595 and the sales tax of $1604. This $2199 must be added to the depreciation amount, for total depreciation of $13,331.
So the depreciation, for 36 months is $370.30 per month.
Then I must also pay interest. Basically, take the cap cost, additions, and residual, add them to together, $53,335 and multiply by the money factor, .00283 to get the monthly interest component, $150.93.
Total payment $521.23
Suggest you go to : http://www.leaseguide.com/calc.htm
Plug in some numbers to see how things work.
Hope this clarifies.
JeffK |
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| SDTS |
I was talking about the "holding your lease till the 31st of October", not the price...even though it is a good price as well!!! :D
All good. I only asked the question because of the risk of Honda changing the rates or residuals before your lease begins. Perhaps, they are turning it in at the end of this month with your "2nd" payment starting at the end of October? that would make more sense in my "conservative risk" brain when I do car deals in fear of HOnda making a change....but each dealers risk factor is always different..and even the small profit they did make on your deal, there is still enough to cover any possible changesto rates or residuals based on history of changes if you refuse to resign or alter your end of the deal at all if any changes become necessary.
should also look at stuff before i open my mouth..the residual sheet do indeed say Good until October 31st. :D I went to look at how long the last residuals were good for when I saw it. :D they can still change them at any time as they have that right, but they do indeed say that and they hardly ever change the residuals before the program expires. It is the Money factors that do not have an expiration date. the current rates started on August 1st. However, if those rates do indeed change, they have 10 days to still submit a contract after the rate change as long as they have sent over your app for approval during the current rates available program....which I am sure they have. So if they do change, they could call you and tell you what is gong on. That would be a looooooong stretch to go from August 1st all the way to October 31st without changing the rates, but anything is possible!!!! :D
Again...congrats on your deal and your arrangement!!! the minor enhancements they have made to the 06 MDX in comparison to your old one are nice and noticable!!! Just the way the door sounds when it is open and closed is noticable!!! :D Enjoy our new X!!!!
It also does nto help that "Post Dating" a contract like that in California is illegal. I would kill to sell cars in a different state sometimes. Some of the laws they write just simply make no sense...like the post dating one.....but what you gonna do!?!?!?! |
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| JeffK |
Dear SDTS:
Glad you found that the residuals are good through 10/31.
The money factor, .00283 is not a bargain! IMHO, if anything, they will go down not up.
My credit application has been sent in, but that is a mere formality. In fact I gave them the letter from Honda credit saying I was pre approved and waiving the security deposit.
As I said, their only additional expense is several weeks of floor plan financing, which I suspect is not much.
BTW, I have excellent credit, and for example on my last lease of a BMW Z4, the approval was done in less than 15 minutes. Other approvals have taken about the same time or less.
I do not know about "post dating:: My contract provides for delivery on 10/31.
JeffK |
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| SDTS |
I could not agree more on the 2.83 not being a bargain!!!!! I hope you are right about it going down!!! They have done nothing but go up all year long. It still amazes me that they ended the special lease rates on the MDX. As a matter of fact, they no longer have ANY special lease rates right now!!!!! Othar than some states, Not California, have a special lease on a TL. We got the 2.9%...us and about 13 other states, all the otherones got the special lease..399 for 24 months. ....I think New York was one of them. I would have rather had the lease than the rate, but whatever!
If any come out, I will be sure to post for you so you can perhaps go get them to change your contract to a new one with the new program!!!! |
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| one4gatr |
quote:
Suggest you go to : http://www.leaseguide.com/calc.htm
Thanks Jeff I have been to the site before and the discussion fourums with Tarry is very helpful.
I just wanted to have the math staright in my head which I now do to make me a better shopper.
Thanks again. |
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| NSXBill |
Wow Jeff! I wish I could make that deal and have them hold the car until Jan 31st :D
Oh well, now what am I going to do?
BTW, what do you mean by "tissue?" |
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| JeffK |
Bill:
I was fortunate: As I posted, the price the dealer gave me was his price, no negotiation, which I accepted.
What made the deal was his willingness to write the lease to commence on October 31, when my present lease ends. This way I will not have any overlap on payments.
Tissue is dealer invoice.
Just read the review of the '07 in Autobytel. Sounds fantastic, but once again, have you ever read a bad review?????
I still feel more comfortable waiting 12 to 18 months with a new model. Let the prices stabilize and others suffer the teething pains of a brand new model.
That is why I opted for 36 months instead of 42 - in three years, if I still need an SUV, I will opt for the MDX, assuming nothing else in the meantime has come along that is better.
When leasing the best price is at the beginning of the model year when residuals are hightest.
Jeffk |
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| SDTS |
| I would bet that the new MDX %'s will be in the 60-64% range. Unfortunately, the money factors will still suck though. |
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| NSXBill |
quote:
Originally posted by JeffK
Bill:
I was fortunate......
That is why I opted for 36 months instead of 42 - ....
When leasing the best price is at the beginning of the model year when residuals are hightest.
Jeffk
If I lease on Jan 31, then I should shoot for 42 months to get closer to the model-year-end (July 31st)?
The beginning of model year has highest residual ==> good
But is likely to be harder to get a low cap cost ==> bad -- No? |
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| JeffK |
Bill:
You are correct: With time residuals decline, but towards the end of the model year there are bigger discounts, so one may offset the other, but not usually.
For example the monthly payments on the '06 MDX were less in February than now in September and that is with a cap cost below tissue and a $2500 rebate. These savings did not offset the decrease in the residual value.
As to money factor (interest rate) your guess is probably better than mine.
But also keep in mind, that there is a benefit to driving a 2006 for example from September/October rather than July. By July the model is already 9 to 10 months old - that is why the dealer must discount it.
Compare that to buying, the longer you wait the cheaper the car is - all other things being equal. But you do not have use of the car.
JeffK |
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| NSXBill |
Let me see if I can ask this a different way.
Lets assume I have to start my new lease on Jan 31st. If my goal is to try to have my next lease end at the most advantagous time to start yet another new lease, should I lease for 36 or 42 months, or some other period?
Bill |
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| JeffK |
Dear Bill:
I think the best time to start a new lease is the end of October.
The residuals are usually for 60 days. Normally they start in September and change every 60 days.
By October the car is usually out for 60 days, so dealers are willing to discount off of MSRP more in October than in September.
You also have the use of the car for 11 months, until the next September when the new model comes out.
However, this is only true when there is not a complete change in the model.
For example with the '07 MDX, this being a completely new car, dealers for at least the first 90 days will want to get full MSRP. Some dealers may even try to get more by adding things like paint protection, etc.
Depending on how "hot" the new model is, it may take 90 days or longer for the dealers to discount off of MSRP.
In my particular case, originally I was to get an '02 in July, but I was unable to get the color I wanted, so I waited for the '03's.
I then went for an '03 for delivery end of October.
The lease payments on the '03 in October were $28 per month less than an '02 in July, and the '03 had the new transmission and a few other upgrades!
Hope this clarifies.
JeffK |
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| DieselDan |
Thanx for the all the info jeffK
BTW do u have your PMs on? |
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| SDTS |
hey Jeff....call your dealer...your payment should go down. The money factors went from .00283 to .00280!!!!
:D Amazing that they would go through the effort to lower it a whole .00003....
Just in case, I am being a smart arse about this!!! :D |
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| DieselDan |
quote:
Originally posted by SDTS
hey Jeff....call your dealer...your payment should go down. The money factors went from .00283 to .00280!!!!
:D Amazing that they would go through the effort to lower it a whole .00003....
Just in case, I am being a smart arse about this!!! :D
yes a better deal :D
by the way SDTS clear your PMs :-) |
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