I have been reading the Leasehackr forum for a couple weeks now. I’m currently in the process of leasing for the first time. I have never bought a vehicle since I began driving at 16 and have always been fortunate enough to accept hand-me-down vehicles.
Now, 8 years later there are no hand-me-down vehicles and it’s time to find a vehicle. The 2003 Ford Taurus I drive needs a repair that’s not justifiable based on it’s value. I’ve been in the shopping process for over a month now.
I started out wanting to finance a new vehicle for a couple weeks, then I decided to finance a used fleet vehicle for week or two (friend is employed at Enterprise dealership). Then for the past couple of weeks I have decided on leasing (not a dealer influenced decision).
I’ve always thought leasing was a bad financial decision. However, after researching and weighing it out I believe leasing is a great decision for me. With the decision change has also come with a larger selection of vehicles as well as a larger budget.
Though I’m wondering, how do you stay in budget on a lease? Example, I figured that I could afford monthly payments of $355 on a 72 month loan. This means I can afford a $23,500 vehicle including tax, title and registration. It would be the max I would feel comfortable with.
Since shopping in the lease mindset, the price of the vehicles that I like have also increased. Now I’m looking at $27K Honda Civic with all the bells and whistles. I imagine the lease payments will be somewhere in the neighborhood of the $300’s.
I’m a 24 year old who is a banker at a financial institution that brings in $30K a year before bonus and tax. I don’t want to get in the young mindset and shell out more than I can afford giving me the guilty conscience that is making me feel financially irresponsible.
I want to pull the trigger and start looking for a deal before the month ends but what I explained above is keeping me from doing so. I wouldn’t feel guilty if it was a $200-$250 payment. I’m unsure if I should start looking for a deal now or if I need more time? What do you all suggest at this point?
I’m curious here on how many of the Leasehackrs here stay within their budget while still getting the items on the vehicle they want? The Leasehackrs deals advertised here are great, but aren’t you like me and want the Honda Sensing, Technology Package, Navigation and Leather Seats?
Disclosure: I know to contract dealerships via email, etc., etc., etc. I’ve done nothing but eat, sleep, work and study leasing.
Don’t be overwhelmed, just make some base line decisions about what you can afford, and what you cannot. No sense going into debt over a car.
The Civic is a good choice though, and I’m looking at one myself right now. Probably just the EX-T. Personally I can live without leather, and GPS. It has pretty much everything else I need. I was quoted $259/mo with tax in NYS, no money down ($97 dmv fees). Pretty good, and exactly (to within $1.39) of what I got using the calculator here. I think a $300 Civic payment is possible on the Touring with the sensing option. From what I’ve read, the Honda Sensing feature is very overactive. I’d like it, but don’t need it.
At age 24, you don’t want too much debt, so finding an affordable lease deal makes sense to me. Depends on a host of other factors too, like how much debt you have now. But don’t lease sleep over it! Find what you like, but can afford, life is a series of compromises sometimes. But the Civic is a very nice car at any price, and if you don’t have to have every bell and whistle, I’ll bet you’ll be quite happy with it at a price that won’t break the bank.
My advice would be to find the best price on the size vehicle you need. The great thing about leasing is you will only be driving it 2-3 years, so if you don’t like it, you can pick something else next time. After the first month or two, it stops being a new car and reverts to just a tool to get you to where you are going. If you can get a Civic for a fair payment, then sure, but I bet you can get a different car that does basically the same thing for much less right now, such as a Cruze, Cruze Limited, Malibu Limited, Sentra, etc…
Speaking of good payment, an excellent rule of thumb is take 1% of the MSRP, that should be your target for a monthly payment with nothing down or maybe just first month’s payment down. So, a $25,000 MSRP car, your target lease payment with $0 down would be $250.
By all means, before you sign, run the numbers here so the “experts” can weigh in. You might find a great deal that others may want to replicate!
Reality Check - your current salary is modest. Your best bet at this point in life is to buy a vehicle. A new subcompact such as a Civic, Corolla, Sentra, 3 at the lowest trim level. You get great reliability, low maintenance costs and the latest safety features (air bags, stability systems and crash worthiness). Shop thru the internet, take the cash rebates and finance with a credit union (like Pen Fed). Then 10 years from now shop for your next car as lease or buy - your life situation will probably be much different.
I think buying new would be the worst thing. Stuck in debt with a depreciating asset. A cheap lease (less than $200 per month) or driving a $1,000 beater for a few months seems like a better idea to me. Perhaps you could take over a lease on Swap a lease to get your feet wet on making car payments?
So before I reply, I appreciate the responses I have received. I was offered a $259/mo lease including tax for 36 months and 12k miles a year via text. It’s for 2016 Honda Civic EX-T. Should I check with the other dealers also? He had my number from when I test drove it and offered an est. I can get the full figures if I should.
I can afford a higher payment, but I wouldn’t go into debt. I currently have no debt, I have excellent credit with a 772 TransUnion. I contribute 15% to 401k including employer contribution. I also have 8 months of living expenses, of course this number would need to almost triple if I were to lease.
I was also quoted a 259/mo no down payment with IN tax. This is for the same Civic as you, EX-T w/ sunroof.
[quote=“adamcar, post:3, topic:1208, full:true”]My advice would be to find the best price on the size vehicle you need. The great thing about leasing is you will only be driving it 2-3 years, so if you don’t like it, you can pick something else next time. After the first month or two, it stops being a new car and reverts to just a tool to get you to where you are going. If you can get a Civic for a fair payment, then sure, but I bet you can get a different car that does basically the same thing for much less right now, such as a Cruze, Cruze Limited, Malibu Limited, Sentra, etc…
Speaking of good payment, an excellent rule of thumb is take 1% of the MSRP, that should be your target for a monthly payment with nothing down or maybe just first month’s payment down. So, a $25,000 MSRP car, your target lease payment with $0 down would be $250.
By all means, before you sign, run the numbers here so the “experts” can weigh in. You might find a great deal that others may want to replicate![/quote]
The Chevy Cruze and Nissan Sentra doesn’t seem attractive (looks wise) to me. I like the Chevy Sonic (hatchback only), but don’t believe it would fit golf clubs in the back without pushing the seats down. The Malibu Limited doesn’t have the technology. I don’t mean to shoot down your suggestions, please don’t be offended. I appreciate this.
If I were to buy a Civic LX for example, I would be paying $20,615. Add on 7% tax, $1,443.05 and it brings it to $22,058.05. Then $15 for Titling, $21.35 for Registration and $496.60 for Excise Fees at the BMV brings it to $532.95 for a total of $22,588. I actually bank with PenFed and got their best financing for a 72/mo loan. With this I would be paying 2.74% at $341/mo.
I’ll quote specifically, “Then 10 years from now shop for your next car as a lease or buy- your life situation will be much different.” This is the point of leasing that I like best. 10 years from now I hope to have a two or three kids by that time, I’ll need an SUV of which one or two of them are old enough to climb in and out of the thing. Heck, maybe I’ll be single. Who knows, but I feel like for any age that leasing at this age is probably the best option.
Also, insurance is expensive for a 24 y/o. I will be paying $145/mo for full coverage that satisfies the agreement. $145+$344=$489 is much more expensive purchasing than $145+$259=$404 to lease. Speaking of leasing, the best piece of mind is that if I total the vehicle, then I won’t be underwater in a loan unlike a lease.
I could understand if you believe I’m leasing for a higher amount than I should, I can understand your argument. Though I don’t believe purchasing is a great idea for me. Then again, maybe I’m trying to put lipstick on a pig and I don’t even realize it.
Leasetrader doesn’t have any great deals. Just search Indianapolis in the section and you’ll find a 2014 Ford Focus SE with a $300 payment. Swapalease is not user friendly and I can’t search by location so I didn’t bother looking. I have a $500 beater, but it requires me to barrow a relatives vehicle for when she is not using it. It’s to the point where it’s effecting my social life as I can’t see friends.
Hey no offense! I am just a cheap GM guy, that’s all! They throw so much cash on the hood (incentives), that I can not break away from them! Honda and Toyota is much more straightforward.
Also, make sure the Honda lease includes GAP coverage, or get it since you are putting $0 down. I know GM includes it, not sure about others.
I think at that age and that income, low payment not specific equipment should be the main objective. You’re not going to get a “hotter girl” or whatever because your car has a navi. Cars in that price range take u from A to B and that’s how you should look at it. Get into a 24 mo lease on anything new u can lease cheap and see where that takes you. 2 yrs go by so fast. Cruze or Malibu i think would be ideal. You’ll learn how to handle the payment and the cars are nice enough even without all the bells and whistles. Also go shop insurance, you might find cheaper insurance.
Though we don’t have specific number breakdown of the offer, the offer you received on the Civic doesn’t seem that good. Definitely contact other dealers in the area and make them compete. Also, you can negotiate free services (e.g. 5k, 10k, 15k, 20k, etc. service maintenance) if the dealer/manufacturer doesn’t already provide free service for the duration of your lease.
Update. I asked the dealer to email me the numbers for the lease. He didn’t show any resistance with this. I will contact other Honda dealers. Should I tell the other dealers what I’m offered or should I let them compete without it?
Thank you everyone, for your help this far.
I love GM also, more so than Honda in fact. However, the Chevy Malibu comes with less features for the same monthly payment compared to the Honda Civic. This is impart due to the Malibu being Mid-size vehicle while the Civic is a Compact.
As for the GAP insurance, I will be sure this is included.
Isn’t a 24 month lease more expensive than a 36 month lease?
Thank you for sharing. I will negotiate this into the costs of the lease!
@IFtkkdx428
in general 24 mo leases are more expensive however sometimes they run a special program for 24 mo which come out better than 36 mo or are very close to where it doesn’t make sense to keep the car for 36 mo. You will have to find out from the particular brand you’re shopping.
I want the lowest possible payment. Many times this will be 36 months, but sometimes the residual difference will make the 24 month lease lower, especially when there is a lot of incentives.
A few extra bucks per month for the 24 is still a much lower total cost than 36 months you are locked into.
You will likely not go over the bumper to bumper warranty in only 24 months.
If you want to lock a low payment in for 3 years instead of 2, that is certainly understandable.
Okay everyone, I have two deals as follows. Still reaching out to a few other dealers. Now the second one reached out to me via text. He had my phone number because I did have to test drive it and offered to run the numbers. The text before he told me $259 a month. But here he says, “First Payment Due.” The first one looks better, I need your opinion. Still reaching out to others of course.
1.) “Our best everyday price on the Civic Sedan 4dr CVT EX-T is $21,570.00. $0 due at signing with approved credit gives you a payment of $256.47 per month based on a 36 month/36K mile lease. The acquisition fee is $595 with a residual value of $14,742.40. The money factor is .00073 and MSRP is $23,035.00”
2.) "2016 Honda Civic EX-T/Modern Steel (color you want)
Sale Price - $21,563.00 ($250 under invoice)
Money Factor - .00083 (A Tier)
Residual Amount - $14,742.40
Annual Planned Mileage - 12,000
1st Payment Due - $286.52"
Very well. Should I have the lowest 36 month lease run the numbers for a 24 month lease and come back?
I completely understand. The 24 month lease makes sense. As I learn more, Honda doesn’t give much in the way of incentives for leasing.
Sounds like a good deal to me if it is truly $0 drive off. (Still more than I would want to pay at that salary, but that’s a separate discussion.) I’m also in Indy and could probably guess what dealership you’re at. However, I think you can get at least $2,000 off MSRP. Also, I thought the Honda MF was .00083, are you sure it’s .00073?
Don’t know what is the difference between the models, but this thread could be useful to you. http://forum.leasehackr.com/t/2016-honda-civic-ex-leased/3573
Hate to be the party pooper, but your 03 Taurus looks better than either of these
You end up paying closer to $10k in 3 year lease and have nothing, save the 10k and put it down on the house when the market turns, that would be a true banker’s approach imo.
