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Honda S2000, Car Leasing, Convertible
#128 of 270 Re: CarMan, am I doing this right? [accelerator]
May 10, 2007 (2:23 am)
Hi accelerator. Yes, the first thing that you should do on a vehicle that you are interested in leasing is negotiate an attractive selling price.
Vehicles' residual values are based upon their full MSRPs, including the destination charge and any factory installed options. I am not sure if Honda Finance allows the dealer-installed options to be residualized.
The capitalized cost for your lease is whatever price you negotiate. If I was in the market for an S2000 right now, I personally would shoot for a price of around dealer invoice minus the $2,000 dealer cash as you mentioned in your post, but there is no guarantee that you will be able to get hat price.
General Motors is no longer offering leases on 2006 models. If you want to lease an '06 Pontiac Grand Prix, you will have to do so through an independent bank. I have to tell you though that this late in the model year the residual values of leftover 2006 models have dropped so much that they probably are going to be unreasonably expensive to lease.
Prices Paid Forum
#129 of 270 Re: New lease offer up at Honda [cantwait_s2k]
May 10, 2007 (2:33 am)
Hi cantwait_s2k. Technically, consumers only need a credit score of 710 or better to qualify for Honda Finance's top aka "Super Preferred" credit tier. Having said this, I'm not sure how your limited credit history and limited residence in the United States will have an impact upon your approval for this tier. I suspect that there is a decent chance that you would be approved for the "Super Preferred" tier, but I cannot guarantee that you would be.
When the dealer told you that a special lease program on this car would not benefit you they were incorrect. When Honda offers special lease money factors on a vehicle, it provides lower than normal rates for all credit tiers, not just its top one. While you might not qualify for the lowest available lease money factor if Honda introduced a special lease program on the S2000, you would qualify for a factor that is better than what you would normally have to pay. Of course, there is no guarantee that Honda will introduce a special lease program on the S2000 in the near future. Its current program is scheduled to run through July 2nd.
You never mentioned the selling price or MSRP of the car that you are interested in leasing. These are important numbers for you as a consumer to know for two reasons. First, the selling prices of leased vehicles can be negotiated, just as if you were paying cash for them. Without knowing this car's selling price in relation to its MSRP you don't know how much of a discount you are getting on it. The second reason is that one needs the selling price and MSRP, including the destination charge, of a vehicle to calculate its lease payment. I would be more than happy to give you my opinion on the deal that you were quoted if you let me know what these numbers are.
Prices Paid Forum
#130 of 270 Re: New lease offer up at Honda [Car_man]
May 10, 2007 (5:18 am)
This is just a thought I wanted to post here but with a car with the reliability and quality of the S2000, do you see any problems with a 48 month lease? I know you should not lease a vehicle longer than the warranty covers.
Your thoughts? Thanks.
#131 of 270 Re: CarMan, am I doing this right? [accelerator]
May 10, 2007 (8:15 am)
They can lease it to you as a used car. They show the retail value (what the lease will be based on - like the MSRP of a new lease car) at $28,875. In my ZIP with a 730 FICO they show a lease with a residual of $17,091, MF of 0.00290 (6.96%), and a payment of $496 + taxes per month with nothing but first payment and TTL due at signing.
If I put in a new 07 with a selling price of $30,500 (conservative) it comes up with $18,468 0.00258 $485 - so for less money you could lease the 07. Payments would go lover the lower you get the price. $454 a month if you could get the price down to $29,500.
#132 of 270 Re: New lease offer up at Honda [accelerator]
May 10, 2007 (8:21 am)
I would not do it. The 36 month lease is normally the sweet spot in the leasing curve. The 24 month normally has too little time to overcome the rapid initial depreciation. The 48 month saves a little each month, but normally not that much. I checked the 3rd party lease offer on a new S2000 and the difference is just $45 per month, or about 10% of the monthly payment. I would suggest that if an extra $45 a month is a deal breaker on a $450 per month lease, that you probably do not need to be leasing this car at this time.
#133 of 270 Re: New lease offer up at Honda [Car_man]
May 10, 2007 (11:52 am)
Sorry for being a broken record here..
Using my handy-dandy little lease calculator, I come up with the same monthly payment, but what I'm still a little confused about is what to figure in for misc. fees. I know with financing, you have the doc fee, title fee, inventory tax, license fee, and sales tax. On a $25k car, that adds up to $1845 so the amount being financed is $26,845 (assuming no trade). From this, I can figure what monthly payment would be and I'd be accurate +/- $15 depending on when the first payment would be due.
When I went to the dealer, he said my calculations were off but he would not necessarily say where or why and yet when others post their numbers on this forum, I'm able to able to come up with very near figures to what dwayne and Car_Man have posted (I work through all their examples). I'm so frustrated I'm having second thoughts about even getting the S (okay, not really, I want the car too much) but you know what I mean.
On a lease, do I still pay those fees I mentioned above? Car_Man posted in a different response to me about if $45 is too much that I might not want this car. While $45 wont break the bank, I just want to make sure I'm not getting rear-ended in the deal by the dealer sneaking in bogus fees.
I found a lease worksheet on edmunds site and another one on carbuyingtips.com which are very helpful but again, you have to know the fees they are inserting just because and which ones they are inserting so they can bump up the cost.
#134 of 270 Re: New lease offer up at Honda [accelerator]
May 10, 2007 (12:44 pm)
All those fees vary from dealer to dealer, city to city, and state to state - so it is hard/impossible for someone else to figure those for you.
In most states, sales tax is due on any cap cost reduction you make, then tax is added to the monthly payment - but some states figure it differently.
"Doc" fees, inventory tax, business tax, and those kinds of things are often added to deals and are (to me) just extra profit. So I usually ask for a price for the car w/destination and and dealer fees added - the no big surprises when signing the papers.
Title fees and tag vary and have to be paid or rolled into the lease.
The lease acquisition fee has to be paid or rolled into the lease. This is $595 for a Honda captive lease and varies with 3rd party banks.
A security deposit may be due, the is the amount of your monthly payment (including tax) rounded up to the nearest $25 or $50 increment. Again, this varies from bank to bank and has to be paid or rolled into the lease. At lease end you get this back when you turn in the car and no damage/problems are found - of if you buy the car of lease end. Honda, and others, may offer no security deposit leases to returning customers or in exchange for a slightly higher money factor (with Honda it is 0.0001). Normally, if you run the numbers you are better off paying the extra and not rolling the security deposit into the lease - but it all depends on the amount and how much MF is costs. Some lease banks offer a reduced MF if you pay more than one month's deposit at lease signing!
So you get the price for the car with destination and any dealer fees included, you add in the acq fee, the security deposit (if any), your taxes on the up front money (if any), the security deposit (if any), then the title and tags fees and that should be the cap cost for the lease. The residual and MF are what they are, and you run the numbers and get your payment - not including tax.
Any dealer not willing to explain the numbers to you is not one I would want to deal with - I don't think. Before I sign anything it has to come out to the penny with what I figure, if not then I have to see why not or I don't sign. One example is a "old stock" car with a slightly lower MSRP number - that results in a lower residual that you might get using the current MSRP.
I had dealer once give me a much higher number than I got using the MF and residual. When I called him on it he said "Oh I included our wheel and tire protection package. I do that in all my leases". Yeah right, all the ones where the buyer does not catch you adding hundreds in fluff money.
The $45 comment was mine - the way I figure it a 48 month lease VS a 36 month lease would save $45 a month plus taxes, which is not that much on a $450 or so per month lease. If the $45 extra on the 36 month is a deal breaker - just too much money - then I would not lease the car.
#135 of 270 Re: New lease offer up at Honda [dwynne]
May 10, 2007 (1:26 pm)
Thank you so much for outlining this. I was able to FINALLY arrive at a number much closer to what I have been quoted!
This was an excellent write up (too bad it cant be made a sticky).
Thanks again, Dennis! I don't feel so lost or overwhelmed now.
May 11, 2007 (1:30 pm)
I've heard from dealers that Honda more than likely wont offer the lease specials since they don't want them back due to their slow sales. Is that just a dealer's pitch to incourage me to do the current deal OR is there some truth to this statement?
I've got a deal on the table that I would be comfortable with doing but I'd be willing to wait three weeks to see next months incentive if there is a chance for the lease special.
#137 of 270 Re: Chances? [accelerator]
May 11, 2007 (1:54 pm)
That is a good point, but Mazda still did cheap leases on the RX-8 and they REALLY can't sell those. A dealer should be able to sell a used S for $20k or less off lease. Of course, the idea is the new lessee will love the car so much they will buy them off lease.
If you can get the car for close to invoice less $2,000 including deal fees, that is a hot deal. Either buy at that price, 3rd party lease, or Honda lease - whichever is the best deal. Over in the price paid forum, a dealer in CA is offering a new 07 S for $28,888 or something like that. For those kind of prices, it is hard to go wrong on any deal.
They may come back with cheap leases, but (like the current Accord deal) they are not likely to do incentive AND cheap lease on the same deal. When I checked, the cheap lease at invoice is better than the standard lease at $2k under invoice. But you don't KNOW for sure what they will do and spring is here