| genemish |
just got off the phone with my dealer.. here's the newest residual factor for a 2002 MDX Touring+Navi..
36mo/12K = 62%
39mo/12K = 61%
42mo/12K = 61%
15K miles = -2% from above.
Remember, these residuals are for Touring + Navi, which means Base or Base + Navi or Base + Touring is higher by at least 2-5%.. |
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| davegood |
| Did your dealer quote you any AHFC money factors (rates)? |
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| genemish |
| no, i will find that out from AHFC once I am approved.. |
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| davegood |
| I know that this is impacted by credit rating, but was your dealer able to give you a high and low end range? ex. 4.5% - 8.0% depending upon credit score. |
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| genemish |
no, i didn't bother asking.. but I will let you know everything soon..
I know my credit is somewhere around 700... so is my wife's.. |
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| GCK |
Genemish: Would be interested in knowing what rate you get ... and also are the rates different for purchase vs lease?
Just Curious: Why Lease? |
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| genemish |
"wHy LeAsE?"
here's fresh off the Acura.com site..
--
Since a lease requires less money up front and has a smaller monthly payment, it frees up your cash and credit for other uses. Investment-oriented people choose to lease if they have more productive alternate investments for their cash.
-- |
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| genemish |
| Got approved by AHFC for the lease.. current interest rate is 5.88% which is the money factor of 0.00245.. That's not bad.. hopefully it will be lower in November when the rate cuts kick in.. |
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| davegood |
I would mention that the leasecompare website has a slightly lower interest rate, and why can't they match it?
I know it's not like a mortgage where you lock in the rate today, but I would think that they could at least match deal available from other, non subsidized competitors...
Everything in a lease has some negotiation leeway on it (except the cap cost in the case of the MDX -- pretty much MSRP), but the residual %, the interest rate, the mileage excess mileage charge, are all open to negotiation. Most people just accept all of these numbers, but they shouldn't. |
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| genemish |
yes, I know.. but once I get *MY* Vin # - I will start negotiating.. By that time (2 weeks from now), leasecompare will have REAL residuals and Money Factors for the 2002.. also hopefully some other banks will have those numbers...
but 5.88% is still pretty good. |
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| davegood |
Yep -- 5.88 is still a great place to start, and I think that you can be pretty safe to assume that it won't go any higher than that.
Good luck - and please post the rate and residual you finally end up with. What term, mileage are you planning on, and what does AHFC charge for excess mileage if you know. |
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| gokings55 |
Here's an article I recently ran across: http://motortrend.com/bl/ican_mt/buying_leasing_f.html[/URL]
Basically it comes to the conclusion that buying is cheaper than leasing. However, I am sincerely interested in hearing responses as to why some of you prefer to lease: Such as what types of investments are you saving your cash for. |
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| GCK |
In the example at motortrend, he assumed that the residual is higher when you buy the car. In my case, I leased a Mitsubishi Montero Sport, my residual is 18,500 ... but the Market value is $12,800 .. In this case, Leasing wins.
I guess the bottom line is that if you buy a Honda or a Toyota, the residual is in line with the market value. For other second tier manufacturers, there is a risk. |
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| davegood |
One excellent reason for leasing is one that most people don't think about -- unreliable residual amounts. This is not as much of an issue with the MDX, as Hondas typically hold their value pretty consistently.
I've even got a perfect example:
My current car, a 1999 Jeep Grand Cherokee stickered for somewhere in the mid 30s. Of course, even though it was the first year after the redesign, there was plenty of room in the negotiations to get down to invoice or slightly below. Now, jump forward only 3 years. The Explorer has been redesigned, the highlander has come out, as have a fair number of other competitors. The bottom has fallen out of the market for used grand cherokees -- Why would you pay 22,500 (my listed residual) for a three year old one when you can buy a brand new one for probably 28? The trade in value is probably 16,500, and the private label sale maybe a thousand more. Even dealerships selling fully detailed and dealer added waranteed ones aren't getting 22 for them. It is so extreme that my leasing company keeps increasing the amount they will take off of the residual if I just buy the thing -- first 1,400 off, then 1,900, then 2,400 last month -- who knows where they'll be by January.
In any case, I don't own it, and I'm glad, because I would be the one making up the brutal hit in selling price if I wanted to unload it.
Something else that makes no sense is why Motortrend uses a higher residual value on the purchase price calculation than it does on the lease price -- I couldn't figure that out, unless they feel that owners take better care of their cars than lessors.
And a final point / another example (sorry for the length here), my previous car to the Jeep was a VW GTI VR6 -- the residual on that was 8,000. I was able to TRADE it (not sell it, TRADE it) for 9,600. The extra $$$ I could just put in my pocket.
So to sum up, if the car turns out to be worth nothing, you're covered, and if it holds it's value better than expected, you can still take advantage of the upside.
Just my opinion. btw, our other car (Audi A6) we just bought as we will probably hold it longer. We may need a car bigger than the MDX in three years. |
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| davegood |
I see that GCK beat me to the response with his shorter explanation. Another good example is the Big Mitsubishi Montero -- that Consumer Reports recall has absolutely killed the residual amount.
Although not likely with the MDX, anything's possible. |
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| Duane Phillips |
| The residuals we have for the 2002 are good only until the end of Oct. If you add a .00010 to the money factor you can waive the security deposit. Hopefully the residuals will improve on Nov. 1. Maybe the money factor also. Take care. |
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| genemish |
quote:
Originally posted by Duane Phillips
The residuals we have for the 2002 are good only until the end of Oct. If you add a .00010 to the money factor you can waive the security deposit. Hopefully the residuals will improve on Nov. 1. Maybe the money factor also. Take care.
wow, didn't know that.. how much is security deposit without the above option??
also, is this a trick the dealer doesn't want me to know about? and if so, what other ones are there ?? please speak up..
thanks |
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| bstoeffler |
| I think it was mentioned a few months ago in some previous threads. Security deposit is equal to the monthly payment rounded UP to the nearest $25. For example, a monthly of $565 requires a $575 security deposit. |
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| genemish |
Ok,
thanks for the info..
Question.. how negotiable is the Money Factor and Residual %? Can I quote other banks on same vehicle and expect a match ?
Thanks
Gene |
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| jetjock |
| I have an order in for 2002 silver/touring/nav. Expect delivery in early Dec. Dealer is Goodson Acura in Dallas. AHFC has a lease program in effect till end of November - no sales tax on leases. |
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| genemish |
quote:
Originally posted by jetjock
I have an order in for 2002 silver/touring/nav. Expect delivery in early Dec. Dealer is Goodson Acura in Dallas. AHFC has a lease program in effect till end of November - no sales tax on leases.
wow.. didn't know that.. can someone explain how sales tax is calculated on a lease and is it different in each state? I know how to calculate the monthly payments via price, months, residual and money factor - and I figured to add NY sales tax on top of that... so that will be waived??? |
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| Duane Phillips |
| The sales tax will depend on what state or even county you live in. But you take the base payment and times by the sales tax rate. 577.28 x 7.8% sales tax = 622.30. The money factor is set by AHFC and can't be negoiated, same as the residuals. Also the money factor times 2400 gives you an approx. APR. .00245 + .00010 ( no security deposit) = .00255x 2400 = 6.12%. |
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| GCK |
| If I am not mistaken, JetJock is referring to sales tax which states charge on the total value of the vehicle - for both leases and purchases. I believe Texas and Illinois are the two states. Texas repealed this rule. This means that they pay tax only on the part they use, not on the entire value of the vehicle. |
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| RGWomack |
| No tax in Oregon, Washington is based on your monthly payment. We get a buy rate from AHFC to the dealers the only negotiation is if the dealer is packing the payment with a little higher money factor over the buy rate. Residual is what it is, but does vary with different lenders as does the money factor. |
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| texrb |
GCK,
Texas does charge sales tax on the entire value of the vehicle, less trade in, at the time of sale or lease. Then if you buy the vehicle at the end of the lease, you pay sales tax again on the residual value - since you don't own it. The state SHOULD only charge tax on the value you lease, but they don't.
What was just repealed in Texas is personal property tax on leases - not sales tax. |
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| nanisworld |
As my husband and I have our own business and the accountant tells us that as a lease you can write off the monthly payment (car is used for business purposes) on the business, whereas if it was purchased I'd only get mileage, no "wear and tear" or the ability to write off repair costs.
Also, in NJ, If i remember correctly from our last lease, you don't pay sales tax on the lease, only on the "buy out" amount if you choose to keep the vehicle. |
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| genemish |
quote:
Originally posted by nanisworld
As my husband and I have our own business and the accountant tells us that as a lease you can write off the monthly payment (car is used for business purposes) on the business, whereas if it was purchased I'd only get mileage, no "wear and tear" or the ability to write off repair costs.
Also, in NJ, If i remember correctly from our last lease, you don't pay sales tax on the lease, only on the "buy out" amount if you choose to keep the vehicle.
Unless the car is leased in the name of the business - you can NOT write the lease payment.. You can however, always write off the miles @ I believe 34.5 c/m.. - so enough miles per month will equal the lease payment..
I have called IRS about this as I own a business as well.. |
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| texrb |
genemish,
I believe if you are using the leased vehicle for business use and are not reimbursed by your employer you can use form 2106 to write off unreimbursed business use expenses including the lease payment - based on the % you use for business.
Disclaimer time :) For anyone reading this - remember this is my opinion - I am not a CPA or IRS employee, so my opinion may not be accurate.
I know you can write off either the miles or expenses for purchased vehicles as well as depreciation, You can't do both. |
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| bz2yx9 |
quote:
Originally posted by texrb
GCK,
Texas does charge sales tax on the entire value of the vehicle, less trade in, at the time of sale or lease. Then if you buy the vehicle at the end of the lease, you pay sales tax again on the residual value - since you don't own it. The state SHOULD only charge tax on the value you lease, but they don't.
What was just repealed in Texas is personal property tax on leases - not sales tax.
There is a lot of confusion about the property tax issue in Texas, but the above post is absolutely correct. It should be noted that each city has the option to charge the property tax. To date, no city has opted to do that, but they have until January 2002 to change their minds. The repeal of the law also affects any car leased January 2, 2001 and after. If you leased before that - well, tough luck until your lease ends - you're paying the property tax.
Concerning sales taxes in Texas, some leasing companies will offer tax credits. Instead of paying full sales tax on the full value of the car, you typically pay 1.2% tax on the full value of the car. This helps quite a bit and brings the lease financing more in line with what you can get in other states. However, it's generally hit or miss on whether they are offered at any particular time or on any particular model. Also, the manufacturer's finance company will often use tax credits to help push sales of new cars. Finally one very important note: Tax credits do not cost the dealer anything. If you're negotiating on price, don't let them use the credits to make you think you're getting a good discount... |
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| GCK |
Texrb:
Thanks for correcting me. Wow! Texas is a real rip off for folks who want to lease. It is absolutely ridiculus to charge sales tax twice on the same thing. |
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| davegood |
Roger,
So could you provide us with the current 'non-padded' money factors / rates that you see from AHFC. I know that they probably vary by credit rating, but just assume that everyone here is an upstanding borrower..... |
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| texrb |
GCK,
Yes it is a rip off. I don't take issue with charging sales tax on the value of the lease portion like most states do when they tax the payment each month, but to pay tax on the entire vehicle price up front is fraudulant because you haven't "purchased" the entire value of the vehicle at that point.
I do understand that since you don't "own" the vehicle during the lease (the leasing company does) that sales tax would apply if & when you buy it at the end of the lease - just as if you bought any other car. It's the entire tax upfront that is wrong in my opinion. |
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