Help me understand this Honda Lease

[GoLowDrew]

LEASE 2009 Odyssey Touring36 Months Term12,000 Annual Mileage $824.76 *Lease Summary: Required Refundable Security Deposit $825.00, 1st Monthly Payment $824.76, Capitalized Cost Reduction $0.00 to equal an estimate total of $1,649.76 due at lease signing MSPR 41,600****************************************************The below are not eact numbers but rounded off.Leasing is to pay for the portion of the car you are using.I would have paid them $30,000 in 3 years.That would mean, the residual value should be about $10,000.Question:Why is Honda making me pay 3/4 of the price up front in the lease?True, we don't know what the market conditions will be 3 years from now. But I think we all know a top-line Honda mini-van will be worth MORE than $10,000. Maybe even $20,000.My current Accord lease works like this:MSRP $24,000Down $2000Monthly $320Residual $13,000In 3 years I paid them $11,000 + $2K down = 1/2 of the car.KBB trade would value the car at $13,000. Dealer will turn around and sell it at $15,000. These numbers make sense.But I don't see how the Honda Odyssey lease make any sense at all.

[prathman]

If it doesn't look good to you, then don't do it.Neither of those leases look very good to me. On the Honda you paid about $13.5K for a car that might have cost around $22K new. For that you got 3 years use and 36 Kmiles while most Accords probably go for at least 10 years and 150 Kmiles pretty much trouble free and well beyond that albeit possibly with some significant repair costs. So you're paying over 60% of the cost for less than 30% of the usage - but that's the expected penalty for wanting to always have a new car.As to the minivan, I expect part of the problem is uncertainty in the market. Credit in general is tight at the moment, so the lenders don't want to take any risks. One risk is that gas prices go way up again and that in 3 years everyone will be trading in their relatively inefficient minivans and other large vehicles for the new plug-in hybrids and whatever other alternatives are out by then. That would greatly lower the resale value and leave the leasing companies in a bad situation. There's also less competition in the leasing market now as several of the players have dropped out of it.

[NibCrom]

Don't lease at all. You pay a bunch of money and then you don't even have a car at the end of it.

[Whelan]

Well you would always be paying more in the long run for the lease. And personally who cares about residual if you are not planning on purchasing the car.I worked for Acura so I know how the Honda leasing works. And given the economy I am not surprised they changed the terms to make them get more money up front.Also, for me at the end of the day, regardless of interest and whatever else there are two factors. Your term length, and your payment. Get both of those in your sights and your done. That is all I asked. I got my Matrix for $343 a month at 66 months. Done deal I wanted under $350 and that is with the GAP coverage.You should go take a peak at the Toyota Sienna. And if you are set on a mini-van, maybe you don't need a Touring. My brother has a 2007 Odyssey EX with DVD entertainment but no leather and power everything (doors, etc.). He pays WAY less than $800 a month for his lease.

[harryyiii]

You didn't include interest on the vehicle in your evaluation. Your lease payment includes the reduction in value, and interest on the remaining value on the vehicle.

[ColonelPanic]

$824/month? That's the highest lease payment I think I've ever heard! What would it be to buy the thing outright?It is a bad time to lease indeed... Doesn't surprise me, they've lost their butts having to deal with the influx of off lease trucks and SUV's that overnight ended up being worth 50 cents on the dollar when the customer's lease was up. If I were in that situation, I'd go buy a cheaper van if the Honda is going to be too expensive. I'm a cheapskate so I would go buy one of those Kia Sedonas that they advertise all the time for less than $20k.

[ou.grizzly]

Quote, originally posted by ColonelPanic »$824/month? That's the highest lease payment I think I've ever heard! What would it be to buy the thing outright?It is a bad time to lease indeed... Doesn't surprise me, they've lost their butts having to deal with the influx of off lease trucks and SUV's that overnight ended up being worth 50 cents on the dollar when the customer's lease was up. If I were in that situation, I'd go buy a cheaper van if the Honda is going to be too expensive. I'm a cheapskate so I would go buy one of those Kia Sedonas that they advertise all the time for less than $20k. A few things need to be pointed out:1. Honda does not have a real "Truck" as the Ridge Line actually gets decent fuel mileage and still seem to hold re-sale value. Same goes for the Pilot.2. Kia may have a minivan, but the only company out of the Big Three that currently stilly produce a minivan is Chrysler as Ford and GMC no longer do that. Only other options out there are Toyota, Nissan, and maybe another. I do agree, that does seem like a lot. I thought Toyota had 0% down on their remaining 2008's until September 30th. May want to look into that.

[zionzr2]

I havent even paid that much a month on Rent even with insurance. Yikes Thats a High Payment.

[jake75]

The "capital cost reduction" of -0- indicates to me that they are "selling" you the vehcile at full MSRP.I have recently seen local ads for Honda advertising "employee" pricing. One specifically advertised an Odyssey with a MSRP of $29,xxx for $23,xxx. I don't remember the exact prices. I suspect the high payment is in part related to the fact that loaded vehicles have a lower relative residual than the more basic version. The residual after 3 years on a $41,000 Odyssey might be 45% of MSRP while the more basic model might be 55-60% of MSRP. [The Kia Sedonia has been advertised for less than $20,000.]