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Discussion Starter #1
I have never leased a car. I have called just about every dealer in So. Cal and have gotten relatively the same qote. Then I contacted this online place called generalcar..

The dealerships want about 2500 down and 450ish a month for a 48 month lease. This other place wants the same down and 460 a month for a 36.... but get this: The guy told me that the residual after 2 years on the base model is 24k. If my calculations are correct, if I buy (pay the 250 early cancel fee) after two years, the base cost me 37500ish. That is below MSRP and I have 2 years to pay for it!!!

Here's the rub: They want to deliver the car to me from their wherehouse. This scares me. I told them, the dealership down the street has the car, can't I just get it? I was told yes, but the rates would be different because they would want MSRP for it. Then he told me that the reason they can do this is because they buy the cars in bulk and get a discount.... this sounds impossible.

Any thoughts? He said it comes with the standard warrenty valid at the dealership of my choice and that they are all certified/new etc etc etc. :confused:
 

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Sounds like someone is hiding something somewhere.

Go to the bank and finance it or get a line of credit from the bank.
That way you know exactly what you are paying and for what.
Plus, a cash sale to the dealer, means some freebies for you or more negociating power.
 

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murray said:
I have never leased a car. I have called just about every dealer in So. Cal and have gotten relatively the same qote. Then I contacted this online place called generalcar..

The dealerships want about 2500 down and 450ish a month for a 48 month lease. This other place wants the same down and 460 a month for a 36.... but get this: The guy told me that the residual after 2 years on the base model is 24k. If my calculations are correct, if I buy (pay the 250 early cancel fee) after two years, the base cost me 37500ish. That is below MSRP and I have 2 years to pay for it!!!

Here's the rub: They want to deliver the car to me from their wherehouse. This scares me. I told them, the dealership down the street has the car, can't I just get it? I was told yes, but the rates would be different because they would want MSRP for it. Then he told me that the reason they can do this is because they buy the cars in bulk and get a discount.... this sounds impossible.

Any thoughts? He said it comes with the standard warrenty valid at the dealership of my choice and that they are all certified/new etc etc etc. :confused:
Generally, leases dont make good "financial sense" to an individual. They are a plus often for a corporation as they are quicker and easier to write off than a buy is. The lease makes sense to an individual if they are cash flow poor (lease payments are lower, but you don't get any equity build up) OR if you want to avoid the risk of what the vehicle will be worth when the lease is over, or you would be selling your vehicle. In other words, under the lease you are immunized against lousy resale value, which shouldn't be a problem for the mdx. Also watch out on a lease for the mileage allowance,you could get womped if you go over. I have had manufacturer leases and third party, both were fine, but i used chase manhattan for my lexus, and mercedes credit for my ml320, not any fly by nighters. Happy shopping!
 

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doesn't add up . . .

MSRP for a base is 35,200 - why would you want to end up paying over 37,700 ? that's the MSRP for a Touring ? Also, consider that when you cancel your lease, if you finance the residual, it is considered a used car and the rates and terms are not as attractive. Unless you have a compelling reason to lease, (tax write-off, company car, car allowance) you are probably better served in purchasing outright.
 

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Discussion Starter #5
I just figured with tax, it was under MSRP. I thought leases made sense for depriciating assets...
 

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Lease

Murray,

Remember that you will also probably be paying monthly sales tax on the amount of your monthly lease payment. You'll need to figure that in.

Edepa is right about leases not usually making financial sense for individuals. Unless you figure you want to trade vechicles every 3-4 years and will pay about $500 a month for the rest of your life anyway, then you can lease and not have to hassle with trade-ins, new car haggling, etc.

I have been leasing for about 15 years, but my wife and I own our own Company. We can fully write off as an expense the monthly lease payments. This means that we are using "before tax" dollars for the leases. It kind of like getting a discount. This situation is not available to an individual, that I am aware of.

There are some lease vs. buy calculators some place I have seen on the Internet. Probably at Edmunds, autoweb, or some place like that. Look up one of them and run the numbers through. It will give you a realistic look at both situations.
 

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Discussion Starter #7
Thanks for the info. The price was after tax. It's actually a little higher then my local dealer offered, but the durration is shorter. Financially speaking, heres my input:

I don't agree that leases only make sense for cash flow poor individuals. When you factor in the depreciation of the dollar, keeping your payments low up front, and having a large bulk at the end means you are spending less, because that large bulk depriciates. Not only that, but you have a choice at the end, which in my opinion, is nice. If you add up the total purchase price between financing and leasing, they are right about even. With a lease, I have the future value of money working for me.

Now, the best way to buy is obviously to walk in there and drop 40g's on them and drive home, but, I can't do that... yet. Maybe 2005?
 

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murray said:
Thanks for the info. The price was after tax. It's actually a little higher then my local dealer offered, but the durration is shorter. Financially speaking, heres my input:

I don't agree that leases only make sense for cash flow poor individuals. When you factor in the depreciation of the dollar, keeping your payments low up front, and having a large bulk at the end means you are spending less, because that large bulk depriciates. Not only that, but you have a choice at the end, which in my opinion, is nice. If you add up the total purchase price between financing and leasing, they are right about even. With a lease, I have the future value of money working for me.

Now, the best way to buy is obviously to walk in there and drop 40g's on them and drive home, but, I can't do that... yet. Maybe 2005?
Well, you may disagree, but i've worked the numbers, using discounted cash flow methods, etc. The difference may not be huge, you'd have to use your own cost of capital for instance...and you may not want to have the risk of the value at end of the period....then leases are good. lots of luck to you!
 

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Discussion Starter #9
actually, your right. I just used the 10 bond rate as my COC, and it works out a little better if I buy... don't know why I was under the other impression. I save around 600. This is using the 5.65 rate I was offered online.
 

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sounds odd to me. why can't dealers play it straight rather than manipulating the customers?!?!

As far as the payment terms, you tell them what you want - not the other way around. If they don't listen to you, walk away.

My 2002 base with tow, flaps, and moonroof deflector cost me $525 with all taxes for 48 months - 0 down - 12K/year. Residual is around $20k, I think. (KBB will be higher than than, I predict). Hope that helps.

:D
 

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Hello:

I just looked at this thread.

If it is of any help to you guys...My lease is $493 inclusive of all taxes, 15K miles per year, 19.7k residual value (no fees for the buy-out) and $0 down.

My thinking is if the lease cost is within 1000$ of financing at the end (including but-out) then the cash flow advantage is worth it.
 

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another point . . .

to consider for leasing vs buying: if you purchase you will have the freedom to add accessories or aftermarket parts as you wish. If you lease, since you do not own the car, you are very limited to what you can do to the car - you could have genuine accessories installed by the dealer as part of the lease but will be charged full retail by the dealer. Just food for thought.
 

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Discussion Starter #15
Good point. I never thought about that. Maybe if I do lease, I should get all that stuff installed at purchase. Maybe that could be my negotiating tactic, since I have nothing else.

But guys, what do you think of that lease in the first post? I know leasing means you pay more if you buy the car, but look at that offer! Does that sound strange? 24k residual after 2 years??

I would have to pay a little over 37 TOTAL over 2 years.... how can this be? It is legit because he keeps contacting me to know if I want it. Just a little worried about the wharehouse thing.
 

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Murray,

- A 60% residual after 24mo doesn't sound unusual to me.

- Have you read the fine print on the lease contract re: getting out early? Usually the early-exit carries penalties. The more lenient leases allow early buyouts -- typically for the remaining monthly payments PLUS the ORIGINALLY calclulated residual at end-of-the-ORINGAL-term. For example, on a 48mo lease, after 2 yrs you'd pay your remaining 2 yrs of payments PLUS the 48mo residual. Leasing co's are not gonna let you get out without paying them the money you've contracted to pay them. I think you might be operating under the mistaken assumption that they'll let you buy it whenever you feel like it for whatever THAT DAY'S residual is. I haven't seen or heard of a lease like that.

- The warehouse thing sounds odd, maybe a yellow flag. Question: you don't mention what trim you're getting. Is this a TOURING by chance? Have you confirmed that it is a US model and not a converted Canadian model?

- FYI accessories may or may not be residualized. You could very well end up paying 100% for them if they're not.

- I call "BS" on the bulk purchasing on the X. Nobody has been able to do that since they were launched almost 2 yrs ago. Why would a dealer sell @ a discount to a 3rd party lessor when they can sell them off the truck at MSRP or higher?
 

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Discussion Starter #17
My thoughts exactly. The bulk thing is rediculous. The model is just base. I did ask if I had to pay the remaining payments with the residual, and he said there is a 250 early termination fee, and then you just pay the residual. Scary stuff. I really want to get this car, but I'm having all these options thrown at me.
 

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murray said:
I did ask if I had to pay the remaining payments with the residual, and he said there is a 250 early termination fee, and then you just pay the residual.
I can't believe that unless I see it in writing. I mean, seriously, why not do a 12 month lease, then? Make 1 payment, cancel and pay $250, then pay the residual @ 25% off MSRP.

No way. This sounds too good to be true. Therefore, it must be.

Seriously, I think you'd be better off going through AHFC for your lease. You *can* get cars from dealers, especially as the end of the model uear is coming up fast.
 

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Re: another point . . .

socalJD said:
to consider for leasing vs buying: if you purchase you will have the freedom to add accessories or aftermarket parts as you wish. If you lease, since you do not own the car, you are very limited to what you can do to the car - you could have genuine accessories installed by the dealer as part of the lease but will be charged full retail by the dealer. Just food for thought.
There are actually few limits on what you can do to a leased car; certainly no lender will be upset if you install factory accessories. But like any leashold improvement, your expense will not be reimbured when you give up possession at the end of the lease, so be sure that you love the "fender flares" enough to justify the cost for a 48 month experience (only running boards are residualized on AHFC leases). And nowhere is it required that you pay any more for accessories if you are leasing than if you are paying cash or financing. The capitalized cost in a lease is just as negotiable as the financed amount of a loan!

I strongly suggest you verify the origin of the car you are being offered. Aquire the VIN # and check with Acura customer service to verify it is a US car, and not a Canadian import. Verify it has not been previously registered and that its US warranty has not begun.

No lender I am aware of has a lease as customer friendly as American Honda Finance Corp, although some may offer a slightly lower monthly payment. When you figue AHFC has no disposition fee (which could be worth $8-$10/mnth), a $1500 damage waiver at lease end, free gap insurance, re-lease benefits for returning lease customers and very high MDX residuals, you have to ask your dealer why they would put you with anyone else.

Finally, no lease term is more missunderstood than "down". Try to focus on "how much do I have to pay on day-1", then you won't fall for the $0 down lease that cost you $1700 total-out-of-pocket.
 

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TheWorm said:

I can't believe that unless I see it in writing. I mean, seriously, why not do a 12 month lease, then? Make 1 payment, cancel and pay $250, then pay the residual @ 25% off MSRP.

No way. This sounds too good to be true. Therefore, it must be.

Seriously, I think you'd be better off going through AHFC for your lease. You *can* get cars from dealers, especially as the end of the model uear is coming up fast.
I agree with TheWorm. It just sounds too good to be true. I would be very skeptical since I am a strong believer that there is no free lunch!!

torchny
 
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