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I believe that RLX rate for Nav or Tech trim is 52% and 0.0007. I still don’t see how it is competitive.
2 things. 1) the tsx tech has a higher sesidual and … How do I post the details of the 2 new TSX leases I just got (one for me, other for a friend)??? I’d love to share the details, thanks
1) Honda/Acura cars have lower residual for all Tech cars (vs Base)
2) You are welcome to post them here as comments for all to see. If you negotiated a car and want to send me pics and details about the deal. email them to thewall(at)ridewithg.com. THanks!
In general, why do they have different money factors for different models? Would it be possible to negotiate for the money factor on a TSX on a MDX? I would assume the bank has the same risk leasing regardless of the car model. Thanks!
Usually the rates are subsidized by the OEM’s, right? So the OEM decides each month how much they want to push sales of each model based on current market conditions. Some trims sell better than others, so they might need fewer incentives for the more popular trims.
At least that’s my guess. I certainly don’t know any of this from first hand experience, nor can I cite a source.
That sounds like a plausible scenario.
So knowing that Acura leases vehicles at .00043 is it possible to negotiate a .00150 money factor to that amount?
I don’t know, Even with all of the information about leasing available on the internet, there are many details i have to figure out. This being one of them. Can the dealer go under the base MF at all? I would guess not, but again, I have no real knowledge in this area.
Buying a car is so very confusing because the dealer is making money in so many places, but is also beholden to the OEM who is making money in several places too. In the end, all you can do is make an offer and be wiling to walk away (and try another dealer).
But the key is not to get to caught up on one detail like MF. There is also RV and most importantly the purchase price. So theoretically you might find a dealer willing to go below base MF (if that’s even allowed) but they would likely just make up the difference somewhere else in the deal. Some places will allow you to buy down the money factor with additional security deposits for example. So maybe they would give you the MF you want by shifting money away from your down payment and/or trade-in to fund the deposits.
I think it’s best to push no further than base MF…then concentrate elsewhere in the deal.
Yes I totally agree. I’ve already negotiated the PP and RV to the best I could get. The last part that I could negotiate was the MF. With a 750+ credit score, it seems paying roughly at 3.5% rate is too much when companies like Toyota are offering 0%/60mo on purchases. I was trying to see if the MF could be negotiated down or if it would just be insulting to ask the dealer for it.
Thanks for sharing your opinion.
I agree that over 3% in the current market is hard to swallow when you have good credit. But of course that 0% is just another form of discount from Toyota. My local credit union is currently offering 2.29% on 60mo auto loans, that’s a pretty good gauge on where the credit market is right now. Anything under that is being subsidized.
I DID negotiate the low .00043 MF on a 2013 TSX TECH. Not sure if the dealer had to go out of the norm to do it. I would suggest that anytime you want to lease a model with more features, you can press for any and all incentives. I was originally told by one dealership that the special MF could only be had on the “special edition”, but that clearly was not true.
I called 2 Acura dealers and they said that MF was non-negotiable and set straight from Acura.
.00043 is the listed base rate for the TSX so maybe they just gave you that?
Thanks for your input.
I’ve heard the opposite – RV is non-negotiable & dealers are allowed to mark-up MF.
Again, I SOOOO much wish I could ask an F&I guy from a dealership to clarify this.
I know MF can be marked up. I know some if not all OEM set a maximum allowable markup. When someone says “MF is negotiable” I assume they mean the markup is negotiable…I don’t believe the dealer can go below what the OEM sets as the base rate (since the OEM is the one buying down the rate). To further confuse tings, some dealers allow you to buy down the rate further with multiple security deposits.
I’m less certain about RV. My boss told me he negotiated the RV up when he leased. But I wonder if maybe dealers are allowed to mark down RVs, and he just got them to bring it back up to the max allowable???
This is how multiple dealers has explained to me that RV is set by Acura Financial Services and it is non-negotiable regardless of your credit score. However dealer are allow to mark up MF. I don’t know the max MF that individual dealer can mark-up. I’ve tier 1 credit and I pretty settle only on $500-$750 over invoice and base MF or I walk.
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After doing some more research, I think the idea of negotiating the RV might stem from pre-2009 days when third party leasing companies were more common…many of which set their own RVs.
Also, using BMW as an example (note: info comes from 2009, policies might have changed). They offer a base MF, your credit score either allows you to lease or not…there is no credit score discount/markup. The dealer is allowed to markup the MF up to 0.0004 at their discretion. Any mention of credit score being a reason for the markup is a lie. In the case of BMW, if your lease is through BMW Financial, there is no reason you should pay more than base MF.
Note that most dealers have access to other leasing companies, so if you do have poor credit, you probably will wash out from the OEM subsidized financing and be quoted something much higher…and who knows how of that is from the lender and how much is a dealer markup.
Oh, I also wanted to link you to this regarding the declining usefulness of “invoice price” as it relates to car buying.
http://www.fightingchance.com/addon04.php?js=y
Buy a car with the least option possible. The option depreciation is not linear. The options depreciate more than the car. For honda/acura products that translates to a lower residual for a higher trim.
While this is generally true, it is not universally. I think the key is to avoid the top trim. In Acura’s case, they offer Base and Tech. The base trim is pretty popular because it has most of the popular “options.” But in the case of Volvo, their Base model is lacking a lot of what you find in the base of an Acura, and they offer a mid level (premier) and top level (premier plus). When I test drove an S60, the salesman told me the best RV% was with the Premier (mid level) package. I can see here on RWG that the mid level packages get better RVs than the top level for Volvo, but unfortunately there is no info on the base trims, so I can’t confirm this for certain. But logic would dictate that the most popular trims get the best RVs. Given two trims, this will normally be the bottom trim, given three, it will normally be the middle trim.
Anyway, devil is in the details, right?
IMHO.. I’d never lease an Acura without TECH unless you are a strict drive your exact mileage and turn in the car guy. Since many leasers like to trade out of one lease to another, having a TECH package makes it much more desirable on the open market.
In fact, a friend of mine who leases a new car every 6 months told me the key to leasing is getting a car that people will want at a price they will want to pay. He personally will not always shoot for minimum drive off in favor of good looking monthly payments.
Obviously, he still seeks low Sales Price and MF, but RV is only vital if you are set as to your end goal for the lease.
I recently negotiated 2 TSX TECH leases and in both cases to RV at the end of the lease will be $2-4K below market value, BUT they do differ by 3%for the same terms. So I think dealers can move the number (I’m sure they can’t go over or under certain pre-sets, but they have some tricks) . Perhaps that would be bad in many contexts, but since I will drive 4-6K miles over per year I’m very happy with it, as is my friend who I also got one for.
I think your personal preference is coloring your opinion on the value of high trim packages at lease end. RVs on the TECH package trims are lower because historically the banks have seen that the options don’t hold their value over time. Sure a high trim car is more desirable, but data shows people are only willing to pay so much for those features, and this differential decreases with used cars. The TECH package might lead to a quicker sale, but not at a price proportional to the initial investment put into the upgrade.
Is your friend leasing these cars for his employees in a business (and keeping them until lease end) or is he turning in a car every 6 months? The costs associated with this kind of behavior would be crazy (unless he is managing a fleet of vehicles).
you may be correct. I know that I feel good about the deal. Got a lower RV on the tech (which I like since again, I will exceed my mileage) and got a deeper discount over MSRP. And I get a car I will enjoy more. Perhaps there are times to stick with the base.
My friend only puts 8-12K miles on the cars in 12-14 months and aggressively negotiates his turn in and new leases, he claims he never pays a shortfall. I believe him, but there’s a possibility he’s hiding some truth… no way to be 100% sure I guess
I appreciate everyone’s input here. Before I signed my lease yesterday I called 3 other dealers to see if they could beat my quote and they all said the MF is straight from Acura and cannot be negotiated.
Some info for you. The TECH package apparently lowers the residual value on a car. I also think that TECH would help increase value, but the dealer told me that TECH depreciates quickly like with computer hardware as newer stuff comes out that is cheaper and better yearly. Truth to this? Who knows, but that’s what the dealer said and their RV reflects this. Since mine was a lease and I use my Galaxy S4 for navigation, the TECH pkg wasn’t a big deal for me.
My lease:
PP $32,435
RV $22,665
MF .0015
PMT $401 inc tax
Base RDX FWD in CA. 36m/10k
I don’t know if it’s the best deal, but I called 3 dealers before buying and told them, “beat this and I will buy a car right now” and no one could – only match.