So many people lease because wow, what a great monthly. Local dealer has 2025 RL RTL for "only" $409 for 36 months. $3899 due at signing. That's another $109 per month so it's really $518 for 36 months. Oh, and TTL due at signing, $2800 tax if no trade, say $3000 but probably a bit more, another $84 monthly so $602 for 36 months. Oops, plus $225 doc fees, another $6 so the "only" $409 a month really costs $608 a month. Yeah, leasing is really a great thing.
The deception of leasing
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LDB415
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Leasing doesn't make sense for myself and my wife, at least in our situation & how we manage things - as well as 'the math'. Typically, when we buy, we 'hold onto' our vehicles for extended periods, usually 10+ years. Each person, family, etc., needs to evaluate their own circumstances, and do what makes the most sense for them. It may well be that when circumstances, costs, and convenience are all factored-in, leasing may well be the best alternative - in their case..
There are also other factors, such as 'buying new' vs. 'buying used'. Personally, I would rather buy a reputable, low-mileage used vehicle than a 'new' vehicle. However, since my 'better half' disagrees with that, I defer to her point of view in that regard - if for nothing more than her 'peace of mind' (as well as my mental health - LOL!).. However, these are totally different topics of discussion ('new vs. used', 'partner influence on decisions', 'peace of mind' and 'mental health' in these decisions, etc..).
There are also other factors, such as 'buying new' vs. 'buying used'. Personally, I would rather buy a reputable, low-mileage used vehicle than a 'new' vehicle. However, since my 'better half' disagrees with that, I defer to her point of view in that regard - if for nothing more than her 'peace of mind' (as well as my mental health - LOL!).. However, these are totally different topics of discussion ('new vs. used', 'partner influence on decisions', 'peace of mind' and 'mental health' in these decisions, etc..).
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There you go. Guys like me help out folks like you by taking some of the shine off a nice truck and making it affordable.
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You left out the most important part - LOL!
I haven't bought a 'used' vehicle since '72 (excluding 'collector' vehicles, of course - see my 'avatar')..
Before you lease a vehicle, you need to understand leasing and the calculations of Capital Cost, Money Factor, and Residual, and be aware of any incentives that might be offered. A dealer can play with the Capital Cost and Money Factor to their benefit. I have leased two Acura MDXs and, in both cases, Acura offered stronger dealer leasing incentives than were being offered for a purchase (Usually manufacturers will offer $$ leasing incentives vs lower interest rates for purchase). My plan in both cases was to exercise the purchase option for the residual value, in which case the total would have been cheaper than buying up front. However, when my 2017 lease was up Acura was offering even more dealer incentives for the 2020 model so I leased again. With the crazy increase in used car prices during the pandemic, in November 2022 I had $14,000 of equity in my 2020 MDX lease that I used in trading for my current 2020 GLS450.
As an example, currently on a 2025 Ridgeline Black Edition 36/12 lease the money factor is .00275 (6.6%) with a residual of 61% of MSRP, plus there is a $5,350 cash incentive. The process is to negotiate a purchase price without discussing leasing, then bring up leasing with the negotiated price as the Capital Cost. Then get to the Adjusted Capital Cost by applying any incentives. Also, don’t put any money down. Note that the dealer can apply a higher money factor than what the manufacturer is offering. You can get fleeced if you don’t know how leasing works.
As an example, currently on a 2025 Ridgeline Black Edition 36/12 lease the money factor is .00275 (6.6%) with a residual of 61% of MSRP, plus there is a $5,350 cash incentive. The process is to negotiate a purchase price without discussing leasing, then bring up leasing with the negotiated price as the Capital Cost. Then get to the Adjusted Capital Cost by applying any incentives. Also, don’t put any money down. Note that the dealer can apply a higher money factor than what the manufacturer is offering. You can get fleeced if you don’t know how leasing works.
Just curious where you find the $5,350 cash incentive from Honda?
Done it all. Outright cash purchase. 13% auto loan on my first car. 0% financing with incentives during the good old days a few years ago. Lots of modest rate financing in between.
Leasing is my choice right now. Peak driving age (60 something) and I want options of having a low maintenance cost fleet. People hauler, medium truck, and go anywhere Jeep. EV for the wife’s commute everyday.
We will be retiring in two years and all the leases expire then. Then we will see if we have a favorite based on current needs and negotiate buying it out. Or not and find another car or two ideal for retirement.
The initial leasing numbers are always fleecing. Unless you have a dealer ad in hand with a decent lease, they will always quote you double the payment to start. And even if you have the ad, they will bump up the advertised rate 50% saying it does not include sales tax and licensing and special protection package.
You really do have to understand all the ins and outs and variables. Know the MF\residual and wow the sales staff by stating how much a 3k discount lowers the monthly payment.
Think I last bought a full set of decent all season truck tires in 2008. It being over $1000 back then was a sticker shock.
Got out of owning used cars two years ago after seeing how much mechanic rates and parts went up while overall repair quality went down.
So if you are a very informed renter and are willing to pay extra over the long run for predictable monthly bills with little maintenance costs, leasing is for you.
Leasing is my choice right now. Peak driving age (60 something) and I want options of having a low maintenance cost fleet. People hauler, medium truck, and go anywhere Jeep. EV for the wife’s commute everyday.
We will be retiring in two years and all the leases expire then. Then we will see if we have a favorite based on current needs and negotiate buying it out. Or not and find another car or two ideal for retirement.
The initial leasing numbers are always fleecing. Unless you have a dealer ad in hand with a decent lease, they will always quote you double the payment to start. And even if you have the ad, they will bump up the advertised rate 50% saying it does not include sales tax and licensing and special protection package.
You really do have to understand all the ins and outs and variables. Know the MF\residual and wow the sales staff by stating how much a 3k discount lowers the monthly payment.
Think I last bought a full set of decent all season truck tires in 2008. It being over $1000 back then was a sticker shock.
Got out of owning used cars two years ago after seeing how much mechanic rates and parts went up while overall repair quality went down.
So if you are a very informed renter and are willing to pay extra over the long run for predictable monthly bills with little maintenance costs, leasing is for you.
Edmunds in their forum section. In this instance it’s not a hidden dealer incentive.
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Leasing a new car as an offset to outright ownership maintenance costs on a vehicle under factory warranty makes no sense to me....
I don't see that ROI working out but haven't delved into it at length.
And I haven't seen much banter about the mileage limits; IIRC, if you exceed the contract limits the cost eats you alive.
I don't see that ROI working out but haven't delved into it at length.
And I haven't seen much banter about the mileage limits; IIRC, if you exceed the contract limits the cost eats you alive.
Since you are a renter and not the owner of the vehicle many things come into play that will drive up the cost of using it.
You are at the owners mercy when it comes to those things at the time the fleecing ends.
As far as the mileage, it is way cheaper to include them up front. For our Forester, it is $0.15 a mile over 36,000 (3yr lease). Also, we have never been charged for excess wear even with a ding here or there.
I for one get bored with a vehicle after a few years, so leasing keeps it interesting.
I for one get bored with a vehicle after a few years, so leasing keeps it interesting.
Leasing is for business people who pass their costs for leasing that vehicle to tax payers .
Re lease miles, Acura (and I presume Honda as well) for loyalty purposes lets you roll over unused miles into a new lease. When I went from a 17 to 20 MDX (I owned or leased five MDXs over a 20+ yr period as my daily driver) the rolled over unused miles let me go from a 10k annual miles lease to a 7,500 annual miles lease, which is a lower payment as the residual is higher with lower miles.
I have a buddy that thru his company has leased at least 8 MDXs that he puts a lot of miles on. However, the dealer can very profitably turn over used MDXs so even though he has a 36 month lease, the dealer will call him around 24 months or so with a great deal when they need to hit a new car sales incentive and put him in a new MDX lease with no charge for mile overages.
With me being an detailed financial guy, leasing is a mathematical calculation, with flexibility at the end of the lease depending on the value of the vehicle vs the residual value purchase price.
I have a buddy that thru his company has leased at least 8 MDXs that he puts a lot of miles on. However, the dealer can very profitably turn over used MDXs so even though he has a 36 month lease, the dealer will call him around 24 months or so with a great deal when they need to hit a new car sales incentive and put him in a new MDX lease with no charge for mile overages.
With me being an detailed financial guy, leasing is a mathematical calculation, with flexibility at the end of the lease depending on the value of the vehicle vs the residual value purchase price.
Not sure of your point. True a lease payment is a deductible expense for "business people", but if they own the vehicle they can deduct depreciation and interest costs, or take an IRS established per mile business deduction. Either way it has to be a valid expense in the operation of their business.
I would say that is on you to find out all the details so you know what you're getting into. My lease payment is $410/month after I put down $6K. The $6K covered the $2500 sales taxes, fees, registration etc. My deal included $4500 discount on my 2025 RTL.
Don't sign a contract if you don't like where it has ended up but also be realistic and include fees, taxes etc.
Some states like Texas, you pay tax on the full sale price. It sucks but it is what it is.
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