OK....sure you're right....but in this context it doesn't apply. Someone with a lot of money invested doesn't consider leasing instead of purchasing so that they can buy 3 more shares of XYZ!

Yeah

 

The minute you look at a car as an investment (unless we are talking vintage Ferrari etc...) your in trouble.

And if someone is scrutinizing the lease vs buy dilemma down to the last penny, that person should buy and buy an affordable car.

 

Wow this deal is very good $300 month for a 36 month lease.

Honda is subsidizing this big time. I would jump on this right away. Must be trying to clear out the 05's before the 06's come in.

Now you mention fee's, what fees are you referring to, on top of the $299 payment , the only additional thing should be the taxes.

Let me answer your questions from your initial post
1. Usually residuals on our cars at the 36 month point are around 57%, this does fluctuate.
Residuals are not negotiable, but the sales prices is, your main goal is to make the difference between the sales price and residual as small as possible, therefore reducing your payment.
2. I have not recently seen looked into leasing, but I would assume money factors are in the 5% to 7% range (after converting from money factor to rate. money factor is basically the interest rate on the lease. just multiply the money factor by 2400 to get the effective interest rate)
3. never heard of a bank fee, sounds like dealer crap, have it waived, ask them to show you what its for, otherwise tell them you are not paying it. Sounds like another dealer fee they are trying to get away with.
4. Never never negotiate monthly payment, those finance managers can manipulate the numbers to make the monthly payment you want, and before you know it , you have a 10 year lease!!! LOL. Always work price. The best way to negotiate a lease is as follows. Go to the dealer, inform them you are buying the car, you have your own financing, and work the price. Once you have gotten the car to the absolute lowest price you possibly feel you can get, bring up that you saw the honda finance lease deal and that you want to take advantage of that, make sure you wrote the price down you negotiated, and then have them calculate the lease based on this.
5. Only hidden costs you will have are the over mileage charges. There should be no hidden charges, dont get the aftermarket warranty, dealers will try to sell you this, but remember your lease will end at the same time they factory warranty ends. Also dont opt for any crap like scotch guard, paint protection and rust protection.
6. Just sign the thing once you negotiated a price you feel is good.

 

To put this lease into perspective.

I did a balloon loan, which is basically a lease, but under my name and not the lease company (ie honda finance)

I put $6000 down, payment was $240 a month, paid $30000 for my 03 s2000 back in 03, and the residual was $16000, but this was for a 5 year residual, basically a 5 year lease.

My best estimate is that the residual they have for your car is around $19500 after 3 years, but they are subsidizing the lease.

If I did not have an s2000 right now, I would jump on this.

 

Checked out the lease on honda's site.

Starting sales price for this lease is $29333.76. Thats a pretty good price to begin with. The residual is $19862. I was pretty close.
I doubt you will be able to negotiate the price much lower than that.

Overall this is a very very very sweet deal
12 k miles a year.
36 months.

down pay is higher than $2499, its actually $3693 after its all said and done.

that includes first month, security deposit (that you get back), and some acquisition fee.

if you can afford $299 a month and are able to put the $3693, i would say do it.

 

I think this is one of the best lease deals available. Here are a few details.

Residual is calculated off the full MSRP (including destination charge). In this case the residual is 59%, which is 33,665*.59 = $19,862.35. The selling price (cap cost) of the vehicle ends up being $29,332.76, which is the price after they deduct your $2500 down. That means the real price is $31,832.76 which is not bad for a price with no negotiation at all. Definitely negotiate on the price first, I would try to get this price down another $1000. The money factor in this case appears to be .00075, which is about 1.9%. I haven't seen a money factor this low in quite some time. This is what makes the lease a good deal, the money factor. Your lease payment of $299 can be broken into a principal payment and an interest payment. The principal payment is the (cap cost - residual)/term or (29,332.76-19,862.35)/36 = $263.07. The interest payment is (cap cost + residual) * mf or (29,332.76+19862.35)*.00075 = $36.90. So, the total payment is $299.96. A typical money factor is around 6%, which equals .0025. If you did the exact same lease and changed the money factor the payment would increase by $87 a month. You will pay sales tax on the payment, so where I am at in Florida that is an extra 7% on the $299 per month.

If you just want to compare in terms of dollars invested. This lease requires $3694 + 35*$299 = $14,159 invested over three years and you would have the option to buy for $19,862.35. If you bought the car for the same $29,332.76 (which means you put $2500 down) and you financed at 5.75% for 72 months, the payment would be $482.67, so after $2500 down and 36*482.67 you are into the s2000 for $19876.12 and you still owe 36 more payments which is $17376.12 (you would actually only owe $15,900 if you had the money to pay off after 36 months). So, you have spent over 5K more to own it over the same 36 months and it would cost you 4k less to buy it if you wrote a check for the balance after 36 months. So, the lease is actually better by 1k. That changes according to how much money costs you, can you do better than 5.75% for 72 months? You have to compare it with what you would actually do if you were going to purchase the car.

Obviously, the best deal is to whip out $31,872.76 and buy it but a lease with a very good money factor is not a bad option for people that can stay within the mileage limits and take good care of their cars.

 

Read this:
http://www.leaseguide.com/lease08.htm

 

This is a great deal. I finance cars for living and that payment is not something we could match today.

AHFC is starting at dealer cost (or close to it), bumping the residual value 10 points over the ALG published 36 month residual and has a very thin money factor. The dealer will not make much on this deal.

I don't think anyone has mentioned turn-in fees on leases. A lot of contracts have a turn in fee (about $200). Also there is all sorts of things that you can be charged for. Honda paint is notoriously thin, so rock chips are going to happen and you will have to pay for that.

 

Good point on the paint, but my last lease with honda, they did not charge me for this, it was considered normal wear and tear. How could they charge you for honda's own shortcoming. Now nevertheless I am sure you will have some dealers that will try to charge you for it. But generally if you are turning around and leasing another vehicle from the same dealer, they will forgive most things, even mileage.

 

Thanks again for all of your help. My last question is- There's that AHFC upfront acquisition fee, which the dealer says is $595 (if I remember correctly). Is this something that can be waived, for someone with good credit for example? Can it be reduced? Or is it something that's pretty much non-negotiable? Thanks again.