Honda Pilot EX Lease (Hot or Not?)

[FZR22]

Hello everyone. Got the following quote, would love to hear your thoughts...

Honda Pilot Ex (No Leather, Navigation, or DVD)
- $1000 Drive off (includes 1st month payment, taxes, DMV fees)
- $323 monthly payment, including tax
- 36 Month term
- 12,000 miles per year alloted

Thank you much in advance.

[JaQnAbOx]

12000 is kinda low but i guess that depends on how often you drive

[FZR22]

I know. But neither one of us drive a lot by any means. Probably under 10K/year...

[JaQnAbOx]

i guess you can do the math for it 323 x 36 months, +1000 = 12628$ find see what the average price of this car is after 3 yrs (ie. a 2003 pitot with 36000 miles). and see if the car depreciates that much in 3 yrs. and compare what you would be paying for the next 3 yrs versus how much the car is worth. sorry that may sound a bit confusing, but it sounded good in my head =)

[bachviet]

That's not a bad deal at all. Most likely the car is going to depreciate that much in 3 years.

[attgig]

http://www.edmunds.com/new/2006/honda/pilot/100645214/cto.html

according to edmunds, the pilot's expected depreciation over 3 years is ~10k if you factor in financing, then it'll get over that 12k-ish.

[FZR22]

i guess you can do the math for it 323 x 36 months, +1000 = 12628$ find see what the average price of this car is after 3 yrs (ie. a 2003 pitot with 36000 miles). and see if the car depreciates that much in 3 yrs. and compare what you would be paying for the next 3 yrs versus how much the car is worth. sorry that may sound a bit confusing, but it sounded good in my head =)

Hmm. I think you lost me somewhere there towards the end JaQnAbOx...

The average price for a 2003 Pilot EX with 36,000 miles is between $22,850 and $25,695. The cap cost or selling price of the model I'm contemplating is roughly $31K.

So it seems the total cost of the lease ($12,628) would be bit higher then the amount that the car will depreciate over the next 3 years...Not such a hot deal anymore???

[Mike_N_Ike]

... The cap cost or selling price of the model I'm contemplating is roughly $34K...
Why so much?

The MSRP for a Pilot EX (w/o leather, nav, or dvd) should be in the 30K neighborhood...

[FZR22]

Why so much?

The MSRP for a Pilot EX (w/o leather, nav, or dvd) should be between 29K and 31K - depending on whether you wanted 4wd or not...

Oops. You're right. I was looking at the wrong specs. Sorry. Should be about $31K...

However, should I not apply taxes/fees and such to the $31K?

[Mike_N_Ike]

However, should I not apply taxes/fees and such to the $31K?
No. On a lease, you only pay tax on the payments...so you don't want to figure it in with the capitalized cost.



It's tough to say whether it's a good deal without knowing all of the specs...but as an estimate, consider this...

IF you payed MSRP for the car - lets say the 4WD EX - it would be $31,295.
IF they had a mediocre residual and money factor...lets say 58% and .002
...
That would make the residual equal $18,151, and the depreciation equal $13,144. If you do the math, this comes out to a monthly payment of $464 plus tax. Even if the $323 payment you mentioned doesn't include tax, it's still a hell of a lot cheaper than that.


The only way I can see to get a payment of $323 plus tax, you'd have to have a cap cost of somewhere near 28K, a residual of 60% and a money factor rate of roughly .0018. Not a bad deal by any means, considering the Edmunds TMV on this car is over $29K. If the $323 includes tax....I'd take it and run.

[FZR22]

No. On a lease, you only pay tax on the payments...so you don't want to figure it in with the capitalized cost.



It's tough to say whether it's a good deal without knowing all of the specs...but as an estimate, consider this...

IF you payed MSRP for the car - lets say the 4WD EX - it would be $31,295.
IF they had a mediocre residual and money factor...lets say 58% and .002
...
That would make the residual equal $18,151, and the depreciation equal $13,144. If you do the math, this comes out to a monthly payment of $464 plus tax. Even if the $323 payment you mentioned doesn't include tax, it's still a hell of a lot cheaper than that.


To get a payment of 323 plus tax, you'd have to have a cap cost of somewhere near 28K, a residual of 60% and a money factor rate of roughly .0018. Not a bad deal by any means, considering the Edmunds TMV on this car is over $29K. If the $323 includes tax....I'd take it and run.

Thank you Mike_N_Ike. Looking at my original post, I failed to mention one thing: the $323/month INCLUDES tax.

[Mike_N_Ike]

Thank you Mike_N_Ike. Looking at my original post, I failed to mention the one thing that the $323/month INCLUDES tax.
Sounds like a good deal bro :thumb:

[FZR22]

Sounds like a good deal bro :thumb:

Thanks again. If it's not too much trouble, could you show how you got the $464 per month? I can't seem to make it work...

[Mike_N_Ike]

Thanks again. If it's not too much trouble, could you show how you got the $464 per month? I can't seem to make it work...
A lease payment is made up of two parts - the depreciation and the interest.

To get the depreciation, you take the capitalized cost, subtract the residual, and divide by the number of the months in the lease. In the case I made up, it would be ($31,295 - $18,151) / 36, which equals $365.11.

To get the interest, you take the cap cost, add the residual, and multiply by the money factor (it's strange to do it this way, I know). In this case, it would be ($31,295 + $18,151) * .002, which equals $98.89.

By adding $365.11 and $98.89, you get a monthly payment of $464. Since the tax isn't included in the capitalized cost, it would be $464 plus tax per month.


What I was saying, was that to get a payment of $323, I used:
a cap. cost of $28,000 (over $1,000 less than the Edmunds.com "true market value" for this car),
a residual of 60% (not bad by any means),
and a money factor of .0018 (translates to roughly 4.3% APR)

I don't know if this is exactly how they structured it or not, but it's a good deal either way. If the selling price is a little bit higher, then the money factor must be lower or what not. And this calculation was based on $323 PLUS tax. At $323 INCLUDING tax, it is an even better deal.

[FZR22]

A lease payment is made up of two parts - the depreciation and the interest.

To get the depreciation, you take the capitalized cost, subtract the residual, and divide by the number of the months in the lease. In the case I made up, it would be ($31,295 - $18,151) / 36, which equals $365.11.

To get the interest, you take the cap cost, add the residual, and multiply by the money factor (it's strange to do it this way, I know). In this case, it would be ($31,295 + $18,151) * .002, which equals $98.89.

By adding $365.11 and $98.89, you get a monthly payment of $464. Since the tax isn't included in the capitalized cost, it would be $464 plus tax per month.


What I was saying, was that to get a payment of $323, I used:
a cap. cost of $28,000 (over $1,000 less than the Edmunds.com "true market value" for this car),
a residual of 60% (not bad by any means),
and a money factor of .0018 (translates to roughly 4.3% APR)

I don't know if this is exactly how they structured it or not, but it's a good deal either way. If the selling price is a little bit higher, then the money factor must be lower or what not. And this calculation was based on $323 PLUS tax. At $323 INCLUDING tax, it is an even better deal.

Awesome. Nice of you to go thru that...Thanks bunch Mike_N_Ike...