Negotiated a deal to get $500 a month for a Honda Civic hatchback no down payment. Payments includes all fees such as taxes and doc fees.
However they’re doing a residual of 66%, so if I do end up buying this car it will cost me about 36k. Am I stupid if I sign this?
Not willing to buy at the moment.
MSRP 27900
Markup:2k (I removed this though or will do)
Protection Package (mandatory): 2.6k
Doc fees: 1k
Taxable: 700
GATAVT:950
Non Tax fees: 320
MF: Not shared
Thanks for the response!
What would be a realistic price to then go for in a lease for the payments + residual? I’m fairly new to leases but my assumption is that it will be higher than MSRP, but 36k does feel a little much.
This is only the first Honda dealership, and after negotiating for a while I placed a refundable deposit to hold the car, but I will probably go to another Honda dealership after Thanksgiving. They’re arguing that I also have no auto credit but I do have a good normal credit score and proof of income via an offer letter. Still unsure how to approach this.
Full disclosure: I’ve never leased myself, but I’ve been reading the forum for several yrs.
I’m not quite sure what you’re asking.
That’s not what the monthly payment is based on. If you’re unfamiliar w/ how leases are structured, then I would recommend you read through Leasing 101.
Even w/ a good credit score, if you don’t have a history of making car/home payments and need proof of income from a letter, you’re probably not going to be offered the lowest MF.
I would first try to determine what a realistic discount is and then use the lease calculator to determine what your target effectively monthly is. And then you can e-mail or call dealerships. There is no reason to go into the dealership to negotiate.
Or see if there is highly-rated broker who works w/ your area.
Thanks for the response. Will do a little more research but things are a fair bit complicated.
I’m not quite sure what you’re asking.
Regarding this part, I was just concerned about total overall amount to own the vehicle after the lease, and whether 36k is appropriate since I’d be paying 18k in lease payments then 18k for the residual which would probably also have to be financed.
I will call other Honda dealerships instead and move forward from there, this will probably save me the hassle of having to drive down.
Although having no credit and not requiring to commit to purchasing it, 500$ a month with no upfront fees seems reasonable, and something I can easily afford. All I’m asking for is a sanity check, to just know if I’m overpaying for a Honda Civic or not. Thank you for your help!
Leasing to buy means you’re paying an acq fee upfront, rent charge over the life of the lease and then the APR of a used car loan at the end. It will be more than the 36k considering you’ll finance the lease-end purchase.
Financing on day one with a new car loan will save you a ton of money.
The main reason I’m leasing it initially is due to my visa status. I’m authorized to stay for here about 3 years for work on a student visa, beyond that however is not guaranteed, so then if I finance it I’d have to do it in 3 years then sell it, or sell it before I pay it off. I’m planning to buy it however if I can manage to extend my work authorization.
I understand financing would be much cheaper overall but if there is a large chance I’m not staying after 3 years, wouldn’t the lease be a cheaper and easier option?
For the other comments, I wanted to respond and say the protection package is unremovable, and they were completely stern on that as it was installed on the vehicle.
Can’t you just sell it then before you leave in 3 years? Honda civics are highly in demand so it should not be difficult and should save you quite a bit of money relative to leasing.
I would look for another dealer without the protection package, I mean this is a lot of money here, we are talking about 10% of the cars MSRP
MSRP on these are around $28K - even if you finance around $30K by rolling in most of taxes and dealer fee - with Honda’s promotional rate of 4.9% for 60 months - your payment should be around $560. Assuming you can qualify for Honda financing, I’d be inclined to pay enough down to reach your $500 target on a purchase and later sell to Carvana or virtually any dealer (3 year old Honda’s are easy to sell) if you leave the country. These cars are not rare - with a little persistence you should be able to get some level of discount and no markup on the interest rate. Good luck!
I think I’ll just follow y’alls advice and buy it, financing it instead would make it cheaper if I intend to keep it and Honda has a good residual rate, I can sell it off if I can’t keep it since it has a decent equity.
