[cbondhonda]

Some food for thought to those interested in "Purchasing" compared to "Leaseing" a Honda.....


Say you buy a car for 23,000.00 OTD and you finance for 60 months(5 Years)
460 a month x 60 months = 27,600 total paid buy term end.
and you dont get gap, your car isnt Positive Equity tradeable for 3 1/2 to 4 years. So you are basically "Stuck" in this car for at least 3 1/2 to 4 years depending.

For the same 23,000.00 car ....you could lease it for 3 years at 12k miles a year and pay around 375 or so a month.
375 x 36 = 13,500.00 total paid over 3 years.

At this point you have the following options:
1) Trade in the car for a new one and pick up payments where you left off with NOTHING down

2) Give the car back to the dealer with no money owed and go buy something else...maybe even have some positive equity to use for a new car!!!

3) Finance the remaining amount of you car and finish buying it
(Gauranteed value of car is = 14,500 and you have 14,100 left over.)

So you pay 400 a month for 3 more years and its yours
Which means you paid 13,500 + 14,400 over 6 years for your car
Which = 27,900 over the course of the term.

Gap is included! also... You have a 1500.00 "Mulligan" for minor incidents up to 499.00 per incident for the 1500.00 total-(which means it is fixed with nothing out of pocket) and you have the option of changing out cars within 3 years without ANYTHING out of your pocket owed.

So you drive a lot of milage....ok no problem.

If you go to KBB and do a trade value on your car thats say an 06 si with 15k miles at good value.....then you do the same at 20k miles.
15k - Good - Trade Value = 16,855.00
20k - Good - Trade Value = 15,980.00
5k miles = 875.00 less trade value which is .17 cents per mile

Honda only charges .10 to .15 cents per mile if you go over the amount agreed to in a contract Lease...5k miles x .15 = 750.00 (125.00 less than Trade Depriciation)

So if you are buying, you will pay more in depreciation on milage than if you leased it and paid a fee per mile you went over.

With this info, especially for those of us who like to have a new car every 3 or 4 years...and dont like putting a lot of money down...and like having a low monthly payment....why would you want to "buy" and be liable for everything when you can lease and pay less-trade early-and have options??

Keep in mind too....only 19% of all people who purchase a car actually make it thru the full term of the loan before trading the vehicle in. So that means 81% of people who "buy" cars never really bought...they just leased it with none of the benefits and paid more per month!!!

Chris