Negotiating a lease

Does Honda allow you to negotiate the purchase price of the car in a lease?

 

Does Honda allow you to negotiate the purchase price of the car in a lease?
Of course. Except when it's a manufactuer sponsored lease.





U.S.A. "Go West Young Men..."

Mexico "El Norte Hombre..."

 

One would be well advise to negotiate the purchase price, then
mention your trade if you have one, then determine which is the
best method that will enable your budget to provide for you to
acquire or use that vehicle.



mike hunt

 

This is excellent advice!

The monthly lease payment is derived from the Principle
(Capitalization Amount), Interest Rate (money factor), Term in Months
and Residual.

The dealer makes more money with a higher Principle, higher Interest
Rate, longer Term or lower Residual. You can mathemaically lower the
monthly payment with a longer term. This is the most common scam when
the dealer "works with you to get you the payment you need".

Most dealers won't even admit there is an Interest Rate. You have to
trust them that they are giving you a fair deal. Trusting a dealer is
their highest profit item.

You are paying Interest on the full financed value of the car for the
time you lease it. The statement that "you only pay for the part of
the car you use" has to be taken with a grain of salt.

Happy Leasing,
Roadie Roger

 

You also pay sales tax on the full amount. That is true if you
purchase as well, but leasing limits the length of time you will have
the car thus ensuring another tax payment in three years (or
whatever.) If you decide you want to purchase the vehicle at lease
end, you will have to pay sales tax again on the same vehicle. At
least that is the way it works in Illinois.

 

Wow...more infinite wisdom!

Good thing I read this...I was ready to lease 6 Honda S2000 for $2400 a
month.

Thanks Mike...I'm "well advised" now!

 

Hear hear!

A lease, from a technical standpoint, is really nothing but a loan with
a balloon payment and a contract with the lessor that he'll take the car
back to fulfill the balloon payment.

Of course, the lessor will demand the car back in perfect condition and
within the allowed mileage. That's the term of the contract. If it's
not in perfect condition or within the allowed mileage (see your
contract; a lease is a CONTRACT, and all terms are spelled out
completely), you'll pay for the damages or miles that are above and
beyond what the contract allows for.

A lease is really very simple. However, one point that no one
understands: from a LEGAL standpoint, a lease is COMPLETELY DIFFERENT
than a loan contract. Consumer lending is a very mature arena, and is
covered by many, many laws that restrict the lenders from pulling funny
stuff. These laws have come about over the last 50 or so years of
people buying cars and homes.

But leasing is LEGALLY a different ball game, and the protections
afforded a consumer under the lending laws don't apply. Therefore, the
lessor can pull all sorts of fast ones on the lessee, and unless the
lessee reads the contract, the lessor will win every time. And it'll
all be legal.

Most people don't bother to read their contracts, so they get screwed.
Then they come to the newsgroups and start asking questions, as if we
have copies of their contract in hand or something and can talk about
their situations.

 

While it is true one pays the interest on the purchase price of
the lease vehicle, one does NOT pay the full amount of interest
on the purchase price. The interest due on a lease is no
different than on a finance contract, in respect to the total
interest paid. If one had a two year finance contract and pay
the contract off in one year rather than two, the last years
interest is not payable. The same applied to a lease. In other
words it IS true you pay only the depreciated value of the lease,
plus the interest on that amount, but calculate on the full
amount paid by the leasor to acquire the vehicle. I.E. On a two
year lease if the capitol cost of the lease is 20K the LEV is
13k. You pay 7k plus the interest calculate on 20K for two
years, not on 7k plus the interest calculate on 7K for two
years. Consumer loan laws would not apply, any more than they
would to the rent of an apartment. One should never buy a leased
vehicle at the end of a lease, period!!! If you do you negate
ALL of the advantages of leasing and pay more for the privilege.



mike hunt

 

In some states, like Pa, one pays only the sales tax on the
amount of each monthly lease payment, as it comes due. In Pa it
is 9%, as opposed to the normally 6% sales tax rate that one
would pay on the full or trade price if they purchased the
vehicle. They get by the Pa flat tax provision of the
Constitution by calling it a 'use' tax under the states 'Sales
and Use Tax' law.



mike hunt