Deal Check: 2020 MDX FWD Tech Package SoCal

Wondering how this deal looks to you all. Actually looking to purchase so the MF is jacked up to raise the dealer discount. I plan to buyout after a minimum number of payments to negate the high money factor. Maybe up to 3. Just trying to take advantage of the lease cash. What do you guys think?

SoCal

2020 MDX FWD Technology Package 10/36
MSRP: $50,925
Discount before rebate: $12,725
Loyalty rebate: $1,500
Selling Price: $36,700
Doc: $85
Acquisition: $554.75
Taxes: $168.95
Residual: 52%, $26,481
MF: .00302

Cash down: $0
Monthly: $522 - all fees and taxes included in monthly. I plan to purchase with a much lower rate loan from my credit union after a minimum number of payments. I think it’s 2 or 3.

Sounds like a plan but that’s not all discount. There’s huge amounts of OEM-provided trunk money in there. It’s worth searching Edmunds forums and here to find out how much

There’s $8800 from the OEM.

I was able to get $13200 off before loyalty but for higher trim.

Oofff… That 7% apr is a killer, no matter how high the discount is for a outdated model

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You’re at 7.7% pre-incentive discount. That’s not enough for buy rate MF, much less a jacked up MF. I like the approach of conceding a jacked up MF for a larger discount if your intent is to purchase it, but right now, you’re not getting a larger discount.

I disagree. The strategy at play here seems to be to get the dealer to trade a larger discount for a significantly marked up MF because the intent is to buy out the lease. It’s just falling a bit short here because the discount isn’t there yet.

So what is that sweet spot of discount vs MF to make that buyout work

If I could trade a 50% discount for a 50% APR, I would. Mark that thing up as high as it’ll go.

When you buy out the lease, you’re paying the RV + the remaining depreciation from the contract rather than the RV + the remaining lease payments (at least that’s how the numbers work out on my current leases; one should always verify prior to entering into a lease with the intent to purchase). If I can decrease the remaining depreciation in trade for a higher rent charge, then the net buy out cost will be lower.

What discount above that 7.7% pre-incentive discount should I be shooting for? I’ve been dealing with about 5 dealers in the area and none of them have been willing to come anywhere close to that.

You’ll want to check other shared deals on MDXs, but I seem to recall seeing quite a few at over 10% off pre-incentive. Assuming buy rate MF is the acura standard of .00215 with loyalty (definitely verify this with edmunds), you’ve got a almost .0009 MF mark up going on. That’s equivalent to about a 5% of MSRP discount. So with everything normalized, you’re sitting at about 3% pre-incentive discount currently.

Thank you for all your responses. Confirmed on Edmonds.com that the Acura standard is .00215 with $8600 incentive.

If I purchase the car after 3 payments, aren’t I only paying that high MF markup on those three payments? So the difference between .00215 and .00302 on three payments works out to be $522-$462 = $60 x 3 = $180. Or am I wrong about that? Are you saying I’ll be paying that high MF for the entire 3 years, or $60 x 36 = $2160? According to the discussion in this thread it sounds like I won’t. Just trying to make sure.

.00215 MF

.00302 MF

There’s two ways to look at this… There’s the actual realized cost difference to you, which is the $180 (if you buy it out), and there’s the value in the marked up mf to the dealer. To evaluate the deal and baseline it against other deals, you need to normalize for buy rate MF. That mf mark up has a value to the dealer that is significantly higher than $180. Every .0002 of mf mark up us roughly equivalent to a 1% discount difference in total lease cost.

With your suggestion @mllcb42 I did some more inquiries and have the following offer with another dealer. The MF is still high, but I got another $775 off MSRP. Thank you for your input.

2020 MDX FWD Technology Package 10/36
MSRP: $50,925
Discount before rebate: $13,500
Loyalty rebate: $1,500
Selling Price: $35,925
Doc: $85
Acquisition: $554.75
Taxes: $168.95
Residual: 52%, $26,481
MF: .00302

Cash down: $0
Monthly: $495

Calculator Link

What does Edmunds list as buy rate MF?

They say it’s .00215. As you said, .0009 MF mark up.

Out of curiosity, how are you approaching the dealer in the context of the marked up mf? Are you sharing with them your intent to purchase the lease out?