What should I do, finance or lease my new Honda? Many things should be considered when deciding how you will pay for your new car. Often times leasing, instead of financing, fits better in the monthly budget with a lower payment.
Leasing actually gives you more options and flexibility in the long term compared with conventional financing.
With Conventional Financing you accept all the risk of the depreciation over time. In a Lease the leasing company predetermines a value of the vehicle at the end of the lease. This value is referred to has the residual value.
When the residual value exceeds the market value at the end of the lease, you can walk away from the vehicle with out responsibility for the negative equity. Do to the excellent resale value of Honda vehicles; it is likely that the market value is greater than the residual value of the vehicle.
You control the equity when the market value exceeds the residual value of the leased vehicle. You can trade the vehicle using the equity to reduce the cost of your next vehicle choice. You could also buy the vehicle at the below market residual value.
Many people think that leasing is not for them because they plan to keep the car for 5 or more years. The reality is that less than 20% of customers who get a 5 year loan keep the vehicle long enough to pay off the loan.
Leases can be structured around your driving regardless how many miles you intend to drive, up to a total of 100,000 miles. The fact is that there is a depreciation cost associated with mileage that we all pay for regardless of the type of finance you choose. Leasing provides a way to plan the cost of depreciation pay as you go. A properly structured lease actually works better for someone who knows they will be putting a lot of miles on a vehicle.
Not all lease companies are the same. With Honda Financial, leases also include a $1,500 Excessive wear and tear waiver, which should be more than cover most drivers. Door dings, scratches, upholstery tears are always accounted for and deducted from the value of your trade in on a vehicle with conventional financed.
Jackson Honda shoppers will find all current Honda Lease Specials going on now by clicking here: Honda Current Lease Specials.