Would a good target price be the same with purchasing or leasing? For example In the marketplace I see 2020 Acura MDX with Msrp of 48k and selling price of 34k. Would 34k be a good target price for purchase?
Thanks
No, it won’t. Incentives may be different on finance vs lease. What will be the same is discount before incentives, which should be the target.
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Acura offers two different lease programs on the mdx with vastly different mf/incentive structures. You need to know which is which if you’re going to be looking at post-incentive selling prices. The two programs are generally several thousands of dollars apart on the post incentive selling price.
Thanks for the explanation!
would you please speak to that a bit
Sure.
Acura typically offers two different lease programs on their vehicles. One is at the full fat MF (usually around .00225) with a large direct to dealer incentive. On the mdx lately, this has been in the $7-9k range, depending on region/trim/etc. They also tend to offer a subvened MF options (usually in the .00060 range) with a much lower direct to dealer incentive ($3-5k). Typically, the lease cost is almost identical with either program. The amount of incentive increase is offset by the higher MF or vice versa, so if you’re payment shopping, it doesn’t really matter.
It comes into play in 2 ways; if you’re trying to cross shop post-incentive selling prices or if you’re leasing to immediately purchase.
If you try to compare post-incentive selling prices between two deals and they’re using different programs, one may have a selling price that is thousands cheaper but a higher total lease cost.
Likewise, if you’re trying to purchase, but want to take advantage of the larger lease incentives, you’d want the high incentive/high mf option since you’re going to buy it out before realizing the impact of the higher MF .
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Sounds like this is really for places with SalesTax on purchase. so the post sales price is less you save on the matching taxes.
As mllcb42 points out, Acura has two different lease programs. To go on further and answer your initial question, no it would not be the same as purchasing. The ‘sale price’ for a lease you see advertised, no dealer will be able to get you that through finance.
For a base model AWD(MSRP 48k as your example), they give 7500 off for a lease and 5500 off for finance.
Acura also gives additional money for conquest or loyalty incentives, as well as military and college grad.
For a lease on a base, yes $34k would be a good goal. (assuming you qualify for loyalty, if not, 35500), for a finance, anything around $38k would also be a good goal. There’s other things like dealer money, which a dealership may or may not have available, so I would say give yourself a buffer of 1000 over what I said.
TLDR. Lease 34-35k, finance 38-39k, if you don’t have loyalty/conquest, add 1500. That will give you a very good / great price depending on your market.
I haven’t been able to sort out any rhyme or reason as to when it gets used. I agree that in somewhere like Texas, one would definitely want the higher MF/higher incentive option.
I’m not sure I can actually come up with any scenario where the customer would prefer the low mf/low incentive option.
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As a dealer, you much prefer the high incentive/high MF option. Allows you to put on the appearance of a large discount, you can hold sticker or over allow on a trade and Joe Blow customer thinks he’s getting a great deal!
So the consumer prefers it and the dealer prefers it. The taxman in a few states doesn’t… but seems like generally high mf/high incentives should be in everyone’s best interest. Other than that whole risk of someone buying the lease out early/otherwise terminating the lease early.
Thank you for your valuable information!
Okay this is going to require some study time