there is still interest involved in a lease; if you put money down you are essentially "borrowing" less and paying less interest, thus you end up less $ out-of-pocket overall.

 

what if you want to get out of the lease? how do you go about this

 

I got the lease after negotiating the car at invoice. My payment ended up being $273 (that includes state tax, which Honda does not compute in their $299 numbers).

This is a very good lease deal -- the money factor is 0.00073.

Craig

 

You don't. You either pay off your remaining payments and give the car back, get someone to take over the lease from you, or sell the car yourself and pay off the remaining payments and buyout.

Or try one of these:
http://www.SwapaLease.com
http://www.leasetrader.com

 

Is this hard to do?

 

Craig, can you take a moment to explain "money factor"? I try to look at things from as many angles as possible, and need this one explained to me. Thanks.

 

another name for interest (.00073 = ~ 1.752%) - not a bad deal.

 

Yeah, it's basically what the leasing company charges you to "finance" the lease, so it's equivalent to an interest charge. The effective APR = 2400 * MF.

A good place to read/learn about leasing is here:

http://www.leaseguide.com/lease01.htm

Keep reading through page 13 or so. Using the info they laid out, I made up an Excel spreadsheet that really helped me understand how leasing works, and how it compares to financing/buying. It was quite illuminating. While negotiating the car, I compared my spreadsheet to what the Honda dealer was coming up with (the sales manager was cool and he let me look at Honda's lease calculator that he uses). Once I understood their assumptions, and put sales tax up front (required in VA) my numbers matched their numbers.

If anyone wants the spreadsheet, I can put it online.

Craig

 

I would like to look at your spreadsheet - still debating lease vs buy at this point.

 

I'm not sure you understand what people are trying to tell you.

Sure the payment will be lower but the risk isn't worth the reward.

You must have put a huge downpayment on your lease.