Checking with the forum world if this is a good deal on the 2020 Civic Ex Hatchback. My lease is up on my 2017 Honda Civic EX-T sedan that this dealer is taking in after appraising it today.
Year, Make, Model, and Trim: 2020 Civic EX Hatchback
MSRP: $25,205
Dealer Price: $23,905
Monthly Payment: $ 339.32
Drive-Off Amount: $ 806.43 (License, Fee, Tax)
Months: 36
Annual Mileage:12k
MF:0.00085
Residual: 61% & $15,375.05
Incentives/Discount: Dealer said they could discount $1300 off
Trade Allow: $13,000
Trade Payoff: $13,296
Net Cap Cost: $25,286
Region: SoCal, 91344
I asked Edmunds for the current MF/Incentives:
.00085 and 61%
$500 incentive
Am I getting a good deal? This is my second car leasing with Honda, but in comparison to my last contract this car is about $70+ more monthly.
TLDR: What is a good PRE-INCENTIVE discount on a Honda?
Welcome to LH. You are in for a treat - negotiating a good deal in this market is tough. I can tell you have done your homework - that will pay off for you. I can help you focus on ONE KEY variable in your deal - how to lock-in a good pre-incentive discount.
You current offer is at a 3.2% pre-incentive - that is very poor. I don’t have experience negotiating Civics so I don’t have a solid target for you. I don’t think you will find many Civic deals on this site to use as a reference. Spend a little time searching here (let me know if you find some good figures). If you can’t settle on a good pre-incentive target, I would work towards 10-11%.
People have had success going to Carvanna and Vroom to flip their old leased car for some positive equity. Go get offers from them - the process is very easy. Most times they will beat your dealers offer.
Does Honda offer a loyalty rebate. You have a Honda now, Honda should reward your loyalty.
You have $495 if aftermarket add-ons. If you want them fine, if not tell the dealer you don’t want them. At a minimum negotiate a much lower price that $495.
Good luck.
P.S. If the concepts of pre-incentive discount and direct-to-dealer incentives are unfamiliar to you, ask a question on this post. It is important you understand these concepts to lock in a good deal.
I like where @Traderx is going with his suggestion. Attached is a calculator that describes the deal he is proposing with one tweak - I like to pay inception fees at signing when the MF translates to +2% to avoid sales tax on inception and low return on liquid cash.
Key point:
You want to negotiate an +11% pre-incentive discount plus you want the $500 honda-to-dealer cash. To be clear, you build your offer price by taking MSRP minus your pre-incentive discount target minus $500 honda-to-dealer cash.
Thank you all for your great amount of feedback and knowledge.
I have tried both Carvana & Vroom for a appraisal, but the dealer is offering the most amount. This vehicle had been in an accident (rear bumper replaced) and they used the CarFax to state that this car does not have as much equity.
I have reached back out to fight for a lower selling price on this vehicle and what incentives are being added.
I’m confused. If your lease is ending, why are you letting the dealer roll $296 in on a trade instead of just letting HFS have it back? HFS waives the dispo fee when you lease another Honda. So it’s literally just lighting $296 plus rent charge plus tax on fire.
I am over my mileage by 8K, the cost of returning it to HFS was the reason I chose to have the dealer take it in. Plus it has some wear and tear that they were bypassing. I also fought back on rolling that $296 into the trade, however the used sales manager wasn’t the best to work with yesterday. He stated that the carfax showing the one accident would make it “hard to resell”. But I know that’s bull****
Carvana: $12,400
Vroom: $12,600
Dealer: $13,000
I see that they are hitting me hard with the price of the new vehicle. I have seen posts about this similar vehicle coming in at $21-22K. I just let the sales rep know that we need to discuss the incentives not mentioned and the selling price.
It’s now clear to see why you want to trade in your leased car.
But a few observations:
They only incentive I would discuss with your dealer is potential loyalty cash. This should be an easy yes or no. You can also get this info from edmunds as well. NO need to discuss the $500 Honda-to-Dealer lease cash. The discussion serves no purpose. You can assume the dealer already reflected the $500 in your offer. You want the dealer to give you a bigger discount out of his pocket. So focus on getting 11%+ pre-incentive plus $500. Give the dealer your offer price - no need to discuss “I want 11% plus I want $500 dealer cash”. Discuss one total discount #.
The dealer is giving you $400 more than Vroom. Nice, plus lease and drop off in one place - convenient. Give the dealer credit and raise your asking price $400.
