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Acura MDX Prices Paid and Buying Experience

12875 messages,  Last post on May 23, 2013 at 7:44 AM

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What is this discussion about? Acura MDX, Car Buying, SUV

Messages Page 1241 of 1288

#12396 of 12875 Re: 2013 MDX TECH [zuluwarrior] by habitat1

Dec 02, 2012 (12:14 am)

Replying to: zuluwarrior (Dec 01, 2012 7:04 pm)
Acura financial is now offering .9 percent for 60 months. Despite Edmunds
saying it is for College Grad program, it's for everyone.
I instead opted for 3.25 percent from my credit union for 72 months.
 
Sorry, but that doesn't get an "A" for financial prudence from Professor Habitat.. Not sure how much you financed, but using $35,000 just as an example:
 
(1) Acura 60/0.9% = $596,78/mo = $35,805 in total payments ($805 interest)
(2) Credit Union 72/3.25% = $535.70/mo = $38,571 total payments ($3,570 interest)
 
In this example, the credit union choice costs $2,765 more in interest over the life of the loan. Over 4 times as much interest expense as the Acura loan. If you trade the vehicle after 3-4 years, the difference will be even greater in percentage terms because the shorter term Acura loan amortizes faster than your longer term credit union loan.
 
Its none of my business what you do with your money. But it still pains me a bit to see someone trade a perfectly fine 4 year old MDX with only 18k miles to essentially spend another $18k on top of the trade to get a tech package and extra do-dads. And then go for a 6 year loan that will cost them close to another $3k. This looks like a bit like wheel in a hamster cage to me. But the good news is that I'm not a professor, so my grade doesn't count. And if you are happy with your new MDX and the monthly payment, I guess that's all that matters.

#12397 of 12875 Re: 2013 MDX TECH [habitat1] by zuluwarrior

Dec 02, 2012 (8:12 pm)

Replying to: habitat1 (Dec 02, 2012 12:14 am)
You went to all that trouble to write that?
 
You might have also thought to write that the payment on the Acura
financed deal would be almost 60 bucks higher than the 3.25 percent
at my credit union. My wife pays the Acura payment and wanted
to stay at 488 a month instead of going to 545 just to have more
equity at trade in time and save a paltry 1200 or so in interest
(I use the number 1200, because we keep our vehicles 3 or 4 years,
not 5 or 6 which would have been required to realize the full impact
of your interest example.
 
Since I had 7700 in equity plus 3000 plus down this time plus a 5300 plus dollar discount, I really don't think I'm hurting. I have a helluva lot
of equity.
 
Having said all that, mind your own business........

#12398 of 12875 Re: 2013 MDX TECH [zuluwarrior] by billy3554

Dec 03, 2012 (4:55 am)

Replying to: zuluwarrior (Dec 02, 2012 8:12 pm)
Have to agree with habitat1 on this one. Accepting a 3.25% rate when a .9% rate is available just to lower a payment by a few bucks does not seem fiscally prudent, particularly for someone buying a $40K or more vehicle.
 
As an alternative, you could have taken some of the money used as a down payment to offset the monthly payment. For example, taking $3,000 off the down payment, and putting it aside, would increase a sixty month payment by about $50 or so. However, a portion of the $3,000 put aside could then be added to each month's payment, over the thirty six months you keep the vehicle. You would then essentially keep the $488 payment while still enjoying the .9% rate.
 
Of course, if you only keep a vehicle for three years, a lease would likely lower the payment even more.

#12399 of 12875 Re: 2013 MDX TECH [zuluwarrior] by habitat1

Dec 03, 2012 (6:14 am)

Replying to: zuluwarrior (Dec 02, 2012 8:12 pm)
Sorry, but when you post on a public forum, you kind of lose the "mind your own business" as a credible rebuttal. But point taken and and be assured that I really don't care how you pee away your own money, I just want to set the math record straight for anyone else that happens to be looking.
 
You've financed roughly $31,900 to get to payment options of $543.92 (0.9%/60) vs. $488.25 (3.25%/72). Difference of $55.67
In 42 months, your wife will saved $2,338 in payments, but....
She will have paid $2,657 in interest, vs. $666 on the Acura loan.
That's a $1,991 difference, not $1,200, and...
in 42 months, you will still owe $14,050 to your credit union vs. $9,721 on the Acura loan.
That's $4,329 in additional equity you/she WON'T have. for your next trade for a 2016 MDX with a techno do-dad double plus package.
 
In a forum where people try to figure out how to save a few hundred dollars by sharing information, I would submit that staying as far away from a higher rate, longer term loan on a vehicle that you are going to trade in 3-4 years is an absolute no-brainer way to save a couple of grand.
 
Pee away your car dollars as you wish. But please, just don't use do it with a home mortgage loan, as it appears a few million others have. And now expect prudent taxpayers to bail them out of foreclosure. At this point, it becomes everybody's business and my solution is to point in the direction of a nice homeless shelter.

#12400 of 12875 2012 MDX Base by vbosmiya

Dec 03, 2012 (10:01 am)

I am looking to buy 2012 MDX Base in Northern NJ area and looking to get an idea of prices paid so that when I walk in to the dealership, I have better understanding of pricing being offered. Also I wasn't sure if Acura offers balloon payment option given current 0.9% financing option and the last payment as balloon payment. Please share your experience if you were able to get the balloon payment option.
 
Thanks.

#12401 of 12875 Re: 2013 MDX TECH [billy3554] by zuluwarrior

Dec 03, 2012 (10:27 am)

Replying to: billy3554 (Dec 03, 2012 4:55 am)
All of this is true!!!!!!
 
To take it a step further, my visa card is offering 0% for 15 months, so I could have just written a check for the car from there and not paid any interest at all, but the downside would be having to pay it off in 15 months would have resulted in my wife having a payment of over 2K per month, but it certainly is a very viable option.
 
Ultimately it just comes down to a choice. Pay more per month to accelerate your equity but live with a higher payment. In my case keeping the payment under 500.00 was as much a psychological thing versus an actual need for my wife's peace of mind. As to setting the down payment aside in a lockbox for payment assistance, it certainly seems like a good idea, but in reality that 3K would be allocated to doctor's appointments and groceries instead.....and knowing that, I opt to put it in the car to get to the magic under 500 threshold.......
 
I can pay the car off any second I so choose which would REALLY accelerate equity, but for me, I can make my money grow more than 3.25 percent per year.
 
As to whether the advice here is warranted or welcome, I dunno.......maybe someone will benefit from your guy's number crunching, but I'm guessing anyone here could have figured all that out on their own and ultimately might have chosen what you suggest, or might choose what I did (lower payment for longer term at a higher rate).
 
This whole debate could have been eliminated though if Acura just decided
to do .9 for 72 months but it's not really my debate, I'll leave it to you guys to argue the finer points of. As for me, it was just a choice and I chose to give my wife the lower payment......

#12403 of 12875 Re: 2013 MDX TECH [zuluwarrior] by habitat1

Dec 03, 2012 (11:43 am)

Replying to: zuluwarrior (Dec 03, 2012 10:27 am)
I can make my money grow more than 3.25 percent per year.
 
Great, but can you make your money grow at 38.9% per year, because that's what this choice is costing you.
 
That $55.66 lower monthly payment saving you $2,338 in monthly payments over 42 months, will cost you $4,329 in lower equity in month 42. You would have to take each $55.66 in monthly payment savings and invest it at a return of 2.78% per month, compounded monthly to end up with the equivalent of the equity you won't have in the MDX. That's a 38.9% annual return.
 
Do the math if you don't believe me. First month's $55.66 savings turns into $171.13 in 42 months, second months turns into $166.51 in 41 months..... 41st months savings turns into $57.21 in 1 month. Add them all up and in 42 months, you have exactly $4,329 to offset the equity you don't have in the MDX.
 
Frankly, the reason I am belaboring this isn't really to chastise you, but to make the point that, while most people here are intelligent enough to figure out the math, I think a lot DON'T and as a result, make egregious errors in judgement based upon a lack of accurate and thorough analysis. Like on the basis of "I can make more than 3.25% on my money". That sounds simple enough. But doesn't take into account that by increasing your payment a measly $55 per month, you are saving 2.35% in interest rate (3.25 vs. 0.9 difference) on the entire $31,900 loan balance every month.
 
Maybe I should set up an Edmund's Auto Loan business. Given the opportunity, I would have offered to pay you $65 per month to take the Acura loan in exchange for you giving me the additional equity you would have had in 42 months. You could have saved another $10 per month/ $420 total and I would have ended up with $4,329 on an investment of $2,757 over 42 months. That's a 28% annual rate of return for me. Heck, make it $75 that I'll pay you. That's still a 19.6% annual return for me. How about next time??
 
   

#12404 of 12875 Re: 2013 MDX TECH [habitat1] by vinnyny

Dec 03, 2012 (2:46 pm)

Replying to: habitat1 (Dec 03, 2012 11:43 am)
Dealers love nothing more than "Payment buyers"! (Except for old people with very fat wallets and presidents who give away "Cash for Clunkers").
 
Thank you for doing your analysis--it will certainly help some people who couldn't do the math themselves.

#12405 of 12875 Re: 2013 MDX TECH [habitat1] by zuluwarrior

Dec 03, 2012 (7:40 pm)

Replying to: habitat1 (Dec 03, 2012 11:43 am)
I wonder how many people are going to read this and actually be led to believe that you can twist a difference in annual percentage rate on a loan of 2.35 percent into a 28 percent annual rate of return, or 39, or 19 or whatever you spewed.......
 
What they won't see and what you haven't told them is that EQUITY has absolutely nothing to do with RETURN ON INVESTMENT. Equity is defined as the difference between what you owe on something and what you get for it, period!
 
In this case, the additional equity that I would have achieved after 5 years taking the Acura loan must be offset by the ADDITIONAL PAYMENT I HAD TO MAKE DURING THAT TIME, in this case, about 60 bucks a month or 60 months, or 3600 additional dollars, and you're trying to tell me that this 3600 dollars just appeared out of nowhere in the form of 40 percent interest paid to me???? Are you smoking mushrooms? The equity is offset by the additional payments made plus the interest savings, but the interest savings based on anyone's numbers will never ever exceed 2.35 percent per year. So there you go.........I forewent accelerated equity in exchange for a lower payment which is an offset, not a loss, not a gain......not a MAGICAL 40 percent return on investment......
 
Also, to state that dealers LOVE payment buyers, you're correct, but in this case the dealer lost because of this payment buyer, because I financed through my credit union, not through their lender who would have given them a little fee on the backside. Dealer didn't get to sell me any add ons either, no warranties, no credit life, no accident a health, no gap protection, no undercoating or glass etching, NOTHING! payment buyers love that crap.
 
Payment buyers also never seem to focus on one thing a time. I do......It's price first, then trade in, then interest rate, then payment, not the other way around. I'm convinced, I got a decent discount on this car, I had lots of equity in my other car (PAID FOR OUT OF MY POCKET IT DIDN'T APPEAR MAGICALLY VERSUS SOME OTHER INTEREST RATE......the equity was created by me! ) and then I created some more equity with a downpayment on this one to arrive at my wife's magic comfortable payment amount which was 489.00 a month, the same as the payment on her last one......
 
a 2.35 percent premium paid in annual percentage rate will NEVER morph into the magical "I Failed simple math" numbers that you are spewing
forth.
 
The return on investment for opting for the other loan would have never ever exceeded 2.35 percent per year and the additional equity created
by the one year shorter term would have come out of my pocket,
and that my friend is not return.......that's called the INVESTMENT!
 
I owe 32000.00 on a car that listed for 48000.00 2 days ago. I THINK I DID OK!!!!! I didn't buy on payment, I SELECTED a payment for myself and
was willing to pay the price for that payment.
 
As I've said, if someone else wanted to do the .9 percent rate, they
could certainly do so and their payment would be in the mid 500's
and yes, the equity would accelerate faster, but it would never accelerate faster without their 60 buck a month additional investment and that is the one thing you missed in your twisted alice in wonderland assessment.
 
I hope my illustration of the deal I made prior to all of this financial counseling helps someone else......I won't be posting anything else
unless Habitat tells me about a new Ponzi scheme that would have
resulted in my Acura sitting in my garage right now with a free and clear
title with no investment from me at all LOL
 
For those of you wanting to convert a .9 percent annual percentage rate into a 39 percent annual rate of return, check with habitat.....he will send you his pamphlet entitled "Hallucinogenic money advice and what it means to me".

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