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DKgeo34

Leasing a car. Am I better off pre-applying for lease financing before going to the dealership?

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I have FICO scores between 754-802 (depending on the credit bureau). I know I’m getting a Honda (I’ve been very satisfied with my current Honda). I want to lease, but haven’t decided on the dealership or the model.

 

My current lease is from Honda Financial Services. When I went on their website, making sure I had no more lease payments left, I noticed you could apply for lease financing on their website. I don’t think it’s a full-fledged application. It basically pre-approves you.

 

My question: is it in my best interest to apply before going to the dealership(s)?The two dealerships I’m looking at are actual Honda dealerships, so they’d use Honda Financial Services anyway.

 

I don’t know if pre-applying will help or hurt me in terms of my lease rate. I’m not sure if dealers have the ability to negotiate lower rates or have some other power over it. Then again, I would think pre-applying would circumvent the infamous financial manager who always seems to have a reason why they have to increase your deal (down payment/monthly payment).

 

What’s your experience?

 

Thanks!

 

 

 

 

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IMHO applying online is a waste of time since you'll need to apply again at the dealership. also, a bigger down is a good thing for most consumers.

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Do not apply ahead of time as you will be locked into a specific dealership.  Go to the dealer(s) and make your best deal.  Once you have decided what and where you will buy the car, then worry about financing.  From what you post you'll qualify for tier A/1 rates so financing shouldn't be an issue

 

More importantly, you need to familiarize yourself with all the terms related to car leasing such as residual, money factor, etc.  Go to leasehackr or the edmunds leasing forum for the model you are choosing and find out what the residual and base or buy rate money factors are, as well as what most people are paying for that model and any available incentives.  Once you have all this info:

 

 - Negotiate the price (cap cost) of your selected vehicle.  Make sure you know if the price is inclusive of all incentives or not.  See how that compares to what other people are paying.  You don't need to grind every last dollar or try to beat everyone's deal, but don't be the lamb that gets slaughtered either.  Do not negotiate on payment amount.

 - Once you have negotiated your final price, the rest should all be math.  Make sure you are getting the buy rate on the MF, and ask to see it.  Invest in an app like leasematic and calculate the payment yourself to make sure you get the same figures.  DO NOT PUT ANY MONEY DOWN except for first payment/tax/reg.  You should never put money down on a lease because if you total it that money is gone.

- Since it is a lease you won't need anything like extended warranty, etc. so skip all the sales items in the F&I office.  

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29 minutes ago, CTSoxFan said:

Do not apply ahead of time as you will be locked into a specific dealership.  Go to the dealer(s) and make your best deal.  Once you have decided what and where you will buy the car, then worry about financing.  From what you post you'll qualify for tier A/1 rates so financing shouldn't be an issue

 

More importantly, you need to familiarize yourself with all the terms related to car leasing such as residual, money factor, etc.  Go to leasehackr or the edmunds leasing forum for the model you are choosing and find out what the residual and base or buy rate money factors are, as well as what most people are paying for that model and any available incentives.  Once you have all this info:

 

 - Negotiate the price (cap cost) of your selected vehicle.  Make sure you know if the price is inclusive of all incentives or not.  See how that compares to what other people are paying.  You don't need to grind every last dollar or try to beat everyone's deal, but don't be the lamb that gets slaughtered either.  Do not negotiate on payment amount.

 - Once you have negotiated your final price, the rest should all be math.  Make sure you are getting the buy rate on the MF, and ask to see it.  Invest in an app like leasematic and calculate the payment yourself to make sure you get the same figures.  DO NOT PUT ANY MONEY DOWN except for first payment/tax/reg.  You should never put money down on a lease because if you total it that money is gone.

- Since it is a lease you won't need anything like extended warranty, etc. so skip all the sales items in the F&I office.  

Agree 100%.

 

There are about 10 more ways to get screwed on an auto lease compared to a purchase, and a purchase with financing is already fraught with peril for the average consumer.  

 

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11 hours ago, DKgeo34 said:

I don’t know if pre-applying will help or hurt me in terms of my lease rate. I’m not sure if dealers have the ability to negotiate lower rates or have some other power over it. 

Almost every vehicle that qualifies for an American Honda Finance Company lease has a subvented rate.  No markup is allowed on subvention.

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2 hours ago, MarvBear said:

Almost every vehicle that qualifies for an American Honda Finance Company lease has a subvented rate.  No markup is allowed on subvention.

Marv - Are you talking about the residual or the money factor.  Would agree that residuals are set and non-negotiable/changeable.  Does AHFC not allow dealers to mark up the MF for profit?  Would definitely be outside of all my buying experiences across many brands...

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Marv - Are you talking about the residual or the money factor.  Would agree that residuals are set and non-negotiable/changeable.  Does AHFC not allow dealers to mark up the MF for profit?  Would definitely be outside of all my buying experiences across many brands...
Not if it is a subvented rate .

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And I was just referencing the money factor. You can only mark up if you use standard money factors.

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Run the numbers to determine the lease cost.  

 

This can be somewhat challenging as computing the cost of a lease is more difficult than the cost of a loan. 

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4 hours ago, purplegurl1920 said:

Bump


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why?

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