Is it better to buy or lease a car? The Globe and Mail #southern #finance

#honda canada finance


Is it better to buy or lease a car? Add to.


Take the Honda Civic LX ($17,740). Honda Canada is offering current Honda Finance Lease customers owners a $500 “pull-ahead” (Stackable Lease Maturity Cash) to sweeten a new deal, and it can be combined with a $500 cash bonus (Consumer Incentive Dollars), and lease support of 1 per cent, which would reduce the 48-month lease rate offer reported by to .99 per cent.

So what’s all that mean in hard dollars, in monthly payments? The number is $194.09 a month with no down payment, not including taxes and the $1,495 freight charge. But you’ll need to do all the parts of the deal to get that payment. That is, nail down the two $500 rebates that drive down the capital cost to $16,740. Make sure you also get Honda’s own posted $8,515.20 residual rate, which reduces the amount amortized to $8,224.80.

You see, the payment calculator on Honda Canada’s website does not factor in the two $500 offers and the posted interest rate I found there for 48 months is 1.99 per cent. The figure quoted in a pricing report details Honda Canada’s Lease Maturity Support offer, which as we said, effectively reduces your rate to a very tidy .99 per cent.

A sub-$200 monthly payment on a new Civic is pretty attractive for anyone on a tight monthly budget. The problem is, after four years of making that payment, you’ll still need to come up with the $8,515.20 lease buyout, or sign up for a new lease and more monthly payments.

As Eric Evarts writes at “The head-turning lease deals that grab attention in print, radio, and television advertising this time of year tend to be heavily subsidized, enabling very low lease payments.” However, he continues, “What the ads don’t tell you, of course, is that after years of making these low payments, covering the most expensive years of a car’s life, you still don’t own a car…But, the better deal long-term is to buy a reliable car and hold on to it.”

If you can afford it, of course – afford the monthly payment – then buying is a better deal than leasing over time. You will without question get the best long-term deal if you do your research, run the numbers and negotiate hard with your dealer. Obviously, however, at some point the dealer will reach a bottom line offer below which he or she simply cannot go and remain in business.

Ah, buying. If you choose to purchase that very Civic LX for which we ran the leasing numbers, Honda Canada has a $1,500 discount for cash buyers only. That will take the purchase price down to $16,240. Check with your dealer to see if you can combine the $1,500 with another $500 in Consumer Incentive Dollars. However, should you finance, you can deal for that $500 Consumer Incentive and take advantage of Honda Canada’s .99 per cent finance rate for up to three years.

Deals has also noticed that Volkswagen Canada has updated a rich offer on the 2012 Passat 3.6L DSG Highline. A $4,500 cash incentive on cash purchases can be combined with the $500 Volksfest incentive. Both factory-to-dealer rebates are set to expire Oct. 31. If you finance, VW Canada has 0.0 per cent on offer for up to 60 months.

Toyota is continuing to push the Tundra Crewmax SR5 pickup with an $8,000 discount to cash buyers and it’s due to expire at the end of the month, also. And while the $5,000 factory-to-dealer rebate on the Infiniti FX35 Premium was officially set to expire Oct. 1, we’d suggest following up with your dealer on this one; something similar, identical or even better surely is in play.

As per usual, Deals of the Week obtained pricing information from among other sources. Consult your dealer for all the details.

2012 Honda Civic LX auto:

Freight, dealer prep, air conditioning tax: $1,595

Dealer discount (estimated): $600

Taxable subtotal: $21,135

Total price with 13 per cent HST: $23,882.55

Factory rebate: $1,500 (Non-stackable Trading Dollars factory-to-dealer rebate)

Factory rebate. $500 (Consumer Incentive Dollars factory-to-customer rebate)

2012 Volkswagen Passat 3.6L DSG Highline

Freight, dealer prep and air conditioning tax: $1,465

Dealer discount (estimated): $1,250

Factory discount. $4,500 (Dealer Cash factory-to-dealer rebate)

Factory discount: $500 (Volksfest factory-to-dealer rebate)

Taxable subtotal: $32,690

Total price with 13 per cent HST: $36,939.70

2012 Infiniti FX35 Premium AWD

Freight, dealer prep, AC tax: $2,095

Dealer discount (estimated): $1,000

Factory discount: $5,000 (Non-stackable Trading Dollars factory-to-dealer rebate)

Taxable subtotal: $49,445

Total price with 13 per cent HST: $55,872.55

2012 Toyota Tundra AWD Crewmax SR5

MSRP: $42,425 · Freight, dealer prep, AC tax: $1,735

Dealer discount (estimated): $1,250

Taxable subtotal: $42,910

Total price with 13 per cent HST: $48,488.30

Factory discount: $8,000 (Non-stackable Cash Discount factory-to-consumer rebate)

Pricing information source: Calculations based on Ontario customers. Please note that while the information above is accurate at the time of publication, incentives are given at the discretion of individual dealers, and may be changed or discontinued at any time. Dealer discounts are negotiated with the customer on a case-by-case basis.

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