Real-world residual: 2014 MDX Tech/Ent - Page 2 - Acura MDX Forum : Acura MDX SUV Forums
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Originally Posted by Newbie08 View Post
I don't understand leasing a vehicle for private use. If it is used on business maybe. I always purchase car with cash, saving for next one. After 4-5 years, I am ready to trade in the old one for new paying difference with cash. When I was working I had
company car for almost 40 years, more than 10 different vehicles. Leasing costs more than purchasing I believe.
If it's not too personal,with interest rates so low and the stock market doing so well. Why would you invest in a car,which you know is losing money instead of the market which could post big gains?


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Originally Posted by lindros2 View Post
To put a nail in this coffin of a thread, residual values have been consistent.

I will say it again - the market value of the vehicles has changed.

It's not "trade value 29k but I owe 25k VERSUS 29k but I owe 31k".

The fact is - just using my 2011 MDX as a reference case - that throughout most of the term of the lease (after the first couple months), I could have sold/traded it to the dealer (both "dealer" to be clear) for more than I owed.

Same with RDX, RL's, TL's, and TSX's.

Not on this one.

And honestly, I wouldn't want to buy one either.

Hello Pathfinder (yesterday). Bye bye MDX (in a couple months).
Sorry,but I have to chime in. If you could have sold the car at a profit after a few months,then Acura finance is pricing it wrong. They are not in the business of letting you make money. But nothing is going to stop you from blaming Acura. Just like people who like large tax refunds. There are better things to do with the money then give it to the government. But you aren't going to change their mind.

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Originally Posted by elvisfan View Post
Sorry,but I have to chime in. If you could have sold the car at a profit after a few months,then Acura finance is pricing it wrong. They are not in the business of letting you make money. But nothing is going to stop you from blaming Acura. Just like people who like large tax refunds. There are better things to do with the money then give it to the government. But you aren't going to change their mind.
Yeah, I can make no sense of what he says.

What does this mean?
"It's not "trade value 29k but I owe 25k VERSUS 29k but I owe 31k".

I think he's saying he owes $31K and trade-in is $29K. That's not terribly bad. If trade-in is $29K that means he could privately sell it for over $31K. My quick survey of 2014 Tech MDX's show them selling in the $35-40K range privately.

Perhaps his dealer is just low-balling him. I also don't know when he says "residuals are the same" if he means residual percentage or residual amount.

Maybe his $38K previous Acura had a residual of $25K and now his $45K has a residual of $25K as well, not apples to apples.

I give up, I have no dog in this fight, but I look at the resale value of 2014 and 2015 models and they're pretty strong compared to other models. Maybe previous Acuras were just horribly managed by Honda Financial Services and he struck gold 7 times, who knows, he won't share any factual comparisons of past and present...

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Originally Posted by elvisfan View Post
If it's not too personal,with interest rates so low and the stock market doing so well. Why would you invest in a car,which you know is losing money instead of the market which could post big gains?
It's not quite that simple. I've found I can regularly get better interest rates from my credit union than the money factor offered by the auto maker's finance arm. The exception is cars that are oversupplied and there are huge incentives on, but even December 2016 MDX has the most aggressive MF from Acura at .00060, I can still beat that on my own financing.

Also, in Texas (and some other states), when you trade-in a car, you get the value of the trade against the purchase price as a tax incentive. E.G. If you buy a $50K car and trade-in a $30K car, you only pay sales tax on $20K. Unfortunately, in Texas when you lease a car, you have to pay taxes on the entire car value and not the rental/lease portion, so this raises payments significantly.

As far as investing, we're talking about a not so huge difference between lease payment and finance payment.

Maybe you lease for $620 / month but you can finance for $770 / month, so it's only $150 difference. You own the equity and after three years you've only got two years til you own the car, versus with lease, you continue to extend $620 / month and never have a sell-able asset (whether depreciating or not).

Almost every smart financial person I know says the traditional purchase is the wiser choice over leasing. Exceptions are when it's a business purchase or in rare cases where the lease deals are just ridiculously good.

Most people I know that lease choose to do so for one of the following reasons:
1. Want new cars often and don't want to hassle with selling it themselves

2. They have limited cash flow and want to maximize their payment, getting them the best car they can afford for a fixed payment (short sighted investment planning)

3. They saw some TV commercial and it sounded so cheap

90+% of the people I know that lease have no idea how the lease works, and many times they're getting absolutely trolled by the dealer. Trapped by the "what payment would you like and we'll make it happen."

SOLD - 2016 Acura MDX (Graphite Luster) - SH-AWD, Advance
2016 Volvo XC90 R-Design (Passion Red) - Polestar, Convenience, 4C Air Suspension, Bowers & Wilkins, CarPlay
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I lease Acuras and, I too, have been able to trade out of the leases early and have equity to boot. I have not tried to do this, yet, with a gen 3 MDX. Yes, residuals have been consistent. Did you try multiple Acura dealers for trade? Maybe this particular dealer was not interested?

As to the Pathfinder, how do you like the CVT? I drove it and was not a fan.

Side note: A huge benefit of leasing is that you, the customer, is protected against CARFAX dings that would show on the report. Accidents, etc., that show on CARFAX are not held against the customer at lease turn in. The leasing company absorbs the loss..as long as the car is repaired properly. It happened to my sister-in-law's Accord that her hubby wrecked and had repaired. Though the dealer did not want it in trade, she dropped the keys on a lease turn in and walked away from the negative equity because CARFAX showed the car was in a wreck.

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Originally Posted by BrianV View Post
It's not quite that simple. I've found I can regularly get better interest rates from my credit union than the money factor offered by the auto maker's finance arm. The exception is cars that are oversupplied and there are huge incentives on, but even December 2016 MDX has the most aggressive MF from Acura at .00060, I can still beat that on my own financing.

Also, in Texas (and some other states), when you trade-in a car, you get the value of the trade against the purchase price as a tax incentive. E.G. If you buy a $50K car and trade-in a $30K car, you only pay sales tax on $20K. Unfortunately, in Texas when you lease a car, you have to pay taxes on the entire car value and not the rental/lease portion, so this raises payments significantly.

As far as investing, we're talking about a not so huge difference between lease payment and finance payment.

Maybe you lease for $620 / month but you can finance for $770 / month, so it's only $150 difference. You own the equity and after three years you've only got two years til you own the car, versus with lease, you continue to extend $620 / month and never have a sell-able asset (whether depreciating or not).

Almost every smart financial person I know says the traditional purchase is the wiser choice over leasing. Exceptions are when it's a business purchase or in rare cases where the lease deals are just ridiculously good.

Most people I know that lease choose to do so for one of the following reasons:
1. Want new cars often and don't want to hassle with selling it themselves

2. They have limited cash flow and want to maximize their payment, getting them the best car they can afford for a fixed payment (short sighted investment planning)

3. They saw some TV commercial and it sounded so cheap

90+% of the people I know that lease have no idea how the lease works, and many times they're getting absolutely trolled by the dealer. Trapped by the "what payment would you like and we'll make it happen."
You quoted me,but that wasn't my question at all. My question was why would he pay cash for a car when interest rates are so low. You could finance at low rates and invest that money and probably make much more. My question had nothing to do with finance vs lease. Sorry,I wrote the original post wrong.

2014 MDX,TECH. CHERRY AWD Gone.
2017 MDX, ADV SP HYBRID. MODERN STEEL.

Last edited by elvisfan; 01-01-2016 at 04:07 PM. Reason: Wrote the original post wrong.
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Originally Posted by elvisfan View Post
You quoted me,but that wasn't my question at all. My question was why would he pay cash for a car when interest rates are so low. You could finance at low rates and invest that money and probably make much more. My question had nothing to do with finance vs lease. Sorry,I wrote the original post wrong.
Sorry I misunderstood as buying vs leasing and the small difference in saved cash... That said, I agree with you 100%, at 1.3% APR, it doesn't make sense for me to pay cash for the car even though I could.

SOLD - 2016 Acura MDX (Graphite Luster) - SH-AWD, Advance
2016 Volvo XC90 R-Design (Passion Red) - Polestar, Convenience, 4C Air Suspension, Bowers & Wilkins, CarPlay
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at 1.3% APR, it doesn't make sense for me to pay cash for the car even though I could.
But it's often not a straight equation. If the 'out the door price' is the same whether you pay cash or pay the 1.3% then one can make a decision based on the simple math but if they're willing to knock more off the price of the vehicle if the 1.3% offer doesn't entice a higher sale price, then it may make more sense to pay cash. Some of the deals are straight up where they say you can either choose the low percentage 'or' take some cash off the deal. Obviously, the manufacturer/dealer could invest their money and make more than 1.3% as well so the difference in money comes from somewhere.
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But it's often not a straight equation. If the 'out the door price' is the same whether you pay cash or pay the 1.3% then one can make a decision based on the simple math but if they're willing to knock more off the price of the vehicle if the 1.3% offer doesn't entice a higher sale price, then it may make more sense to pay cash. Some of the deals are straight up where they say you can either choose the low percentage 'or' take some cash off the deal. Obviously, the manufacturer/dealer could invest their money and make more than 1.3% as well so the difference in money comes from somewhere.
I'm not talking dealer incentives. Those dealer incentives would make a difference. However,with interest rates so low,even if they are offering zero percent,its not costing them that much. $40000 invested in the market 5 years ago could be worth $60,000 now. Minus $2000 in interest for a 5 year loan at 2%. So you have $$60000-$42000 for the loan. $18,000 plus the car. Or pay cash and you have just the car after 5 years. It's a no brainer for me.

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One of the biggest advantage of leasing is to remove residual risk.

Not only the risk but the 10-20% difference between the trade-in price and retail price.

If the residual is more than the market value then you came out ahead.

If the residual is less than the market value you overpaid on the lease and have to go through the hassle of buying and reselling; very few dealers will give you credit for the difference.

Buying and reselling can be hard due to the sales tax issue.

That being said there are companies like Vroom, Carvana or Shift which can help recover some of the value since they will buy direct.

The one case to keep in mind is high residual with high MF; in that case you pay more for interest in the lease payment. Ideally you want high residual and low MF for the lowest lease payment.

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