I’m working on a deal with a local Acura dealer, one of the few who seems to have an inventory of these vehicles remaining. The vehicle I’ve selected has been on their lot for over 400 days but only has 28 miles (so the salesperson says - haven’t visited yet).
The salesman’s current offer is a long way from worthy of posting to this forum. When it gets closer to acceptable, I’ll post back to this thread and ask for feedback. But I would like to ask two quick questions, if I may.
I’m doing a one-pay lease. The way I understand the finance charge calculation for a one-pay, it should be 2 * Months * MF * Residual. They’ve quoted a number that’s WAY higher than that. Is my formula wrong?
The dealer has “kindly” offered $1,154 off sticker as the starting point, before the $8,950 incentives. He’s going to go a lot lower than that if he wants me to take the car. I believe I saw a deal from last month that said they got the cost down to $34k and June incentives are higher.
Anyone remember what May incentives on these cars were, so I can compare?
I have no idea what the AFS reduction is for one pay. Is there even one?? Monthly rent charge is (Net Cap + RV) * MF, so multiple that number by your term. Net cap has to include everything you’re not paying up front including all fees and tax on incentives.
I can promise you that no one has ever gotten $10k off a TLX excluding incentives, that’s absurd. You can search on here and the edmunds forum for historical info.
The $34k was with incentives. The question was what the incentives were last month. I understand they’re more this month, but I don’t know how much more. If I knew that, I would know how much further below $34k I should push with this month’s incentives.
With a one-pay lease, I’m paying literally everything except the residual value and the end-of-lease fee up-front. There shouldn’t be finance charge on the EOL fee because that’s not due until EOL, so I should only pay financing on the residual. That’s what I believe anyway. I could be wrong. I’ve done research but, but (foolishly) haven’t gotten this detailed on any previous lease.
Invoice is generally 6% back of MSRP on Acuras so I would at least push for that, which would probably be another $1,500 or so. I’ve seen some go below invoice either with the use of discretionary flex cash (when available) or simply to move a unit.
@chrishs2000 I believe there is a discount for one-pay but don’t know what it is offhand. Edmunds would have it though if OP wants to confirm.
MSRP: $45,765
Discount: $3,815 (it has been on the lot > 400 days, taking a flyer)
Incentives: $8,950
Cap Cost: $33,000
36/12k
50% residual ($22,833)
MF: .00145 (3.48%, but that’s Acura)
Finance Charge: $2,389
Depreciation: $10,118
Acq. Fee: $595
Dealer Doc Fee: $220
Bunch of small fees, totaled: $48
Sales Tax on Fees & Depreciation: $657
Total DAS (one-pay lease): $14,027
Guess we’ll see what he says. The only real negotiating point seems to be dealer participation. How bad does the owner want a car that he’s held for about 15 months off his lot?
Not sure that 400 day makes sense. It was delivered to them in March of 2018? That’s a bit early for a new year model. See what’s the manufacturer date is.
Well, it’s a one-pay so I’m not paying finance charges on the depreciation and all the other stuff, just the residual, plus the MF is a little lower, so it gets easier to be closer to that.
But he’s at the equivalent of around $480, which I’m not doing, either.
And THC gets an education in one-pay leases. Apparently the leasing companies charge the MF against the whole selling price of the vehicle. Put $0 down or one-pay or anything in-between, you’re still paying the MF against the same dollar value. The only differences are convenience (not worth it) and lower MF (usually not worth the one-pay; MSD’s seem better).
So, yes, I will never get a new $45k TLX for $390 / month.@vader5 is right on the money.
Yeah, I was just surprised that they charge interest / financing on cash they already have, which is what they are effectively doing with that calc. I have since learned they’ll let you pay up to 25% of the Gross Cap Cost as a Cap Cost Reduction, for which they do not charge financing, so there’s that, at least.
AFS is completely insane on their rates for one-pay. I was quoted a one-pay MF from 2 different dealers: .00135 and .00145, 3.2% and 3.5%, respectively. In contrast, Honda Finance is closer to or under 1% on Accords, and I’ve read that some luxury brands use 0.4% for one-pay (though I haven’t researched them yet to be certain).
Down payments are a big no-no around here, but given the ridiculous MF, it starts to look attractive in risk vs. reward.
I’m assuming then that the AFS one-pay reduction is 0.008, since base MF is 0.00215. Second dealer must have marked it up. Every captive has a different MF reduction for one-pay. Honda Finance uses different MF for every model, wheras AFS uses the same MF across the board.
Given the huge incentives and the terrible MF, might be a good lease-to-buy refinance candidate if you really like the car/
I agree. The down-payment as CCR almost makes sense on an Acura because of the crazy MF, but then… why? I don’t see any path that lands at or under 1% on a TLX. It’s not that great of a car that it should get such a premium. And I’ve been burned by enough cars, even Honda, that I’m firmly in the “lease it first” camp. Flipping a lease straight to a buy isn’t on my radar.
Now I have this new freedom / opportunity in front of me to lease something for 3 years, going as nice as I can and as cheap as I can, wherever the deals take me. And I have between 2 and 4 months before I absolutely have to make a move so I can be patient.
I’m glad I found this forum and I’m grateful for the wisdom shared here!
IMO the lease to buy decision depends primarily on the initial depreciation. If you’re going to carry positive equity throughout the term, I don’t see a downside (and it would give more flexibility than a screaming lease deal but where you’re upside down throughout the term); the warranty is there for a reason. But you’d have to research what these things book for slightly used.
TLX’s were <1% cars a couple years ago at the end of the 2016MY but we haven’t seen it since IIRC. They had a good amount of lease cash dumped on them and MF was much lower.
@chrishs2000 You’re right on lease to buy from a financial perspective, obviously.
I’ve had cars - leased and bought - that had such a brutal history of problems that I was deeply happy to return the ones I leased and unfathomably crushed by the ones I owned and had to take a beating to get out of. There’s more to the car decision for me than just the purchase / depreciation / RV numbers.
Ultimately, I want to be that crazy geezer who’s driving his 198,000th mile in his favorite car. The start of that process, based on my last 36 years of car buying, will be a lease. Someday, I’ll find the right one.
It’s good to know that AFS had their heads screwed on straight at one time. Maybe they’ll get back there again someday.
