Why Lease a Honda?

cheapest car lease dealsHonda is one of the most “lease-friendly” car brands in the U.S.. If you are looking for a good car lease deal, you won’t go wrong with a Honda.

Why it that, you might ask? Why is Honda such a good brand to lease?

Let’s briefly list some of the reasons and then explain them.

1. High residual values

2. Low money factor (finance rate)

3. Frequent special limited-time lease deals

4. Lenient lease-end “wear and tear” policy

5. No lease-end disposition fee

6. Reasonable front-end acquisition fee

7. GAP protection is included in lease

Let’s explain:

1. High residual values – The Honda brand has legendary reliability. High reliability means high resale values. High resale values means high lease-end residual values. Finally, high residual values mean low monthly payments. The best “leasable” cars are those with the highest residual values.

2. Low money factor – Instead of APR interest rate, leases use “money factor” as an expression of lease finance rate. It’s a very small number, such as .0022 but can be converted to approximate APR interest rate by multiplying it by 2400. So, .0022 money factor would be equivalent to about 5.28% APR interest. Honda’s normal money factors are usually very low, in the 1.9%-3.9% APR equivalent range, and promotional deals often reduce the rate to near 0% (leases must have some finance rate, even if it’s almost zero). Low money factor means low monthly payments.

Of course, low rates are only available to customers with good credit scores . If you don’t know your current credit score and rating, you can get it easily and quickly online. What’s your FICO score? Find out now when you check your credit report for $1 at Experian.com!

3. Frequent special limited-time lease deals – Honda offers special lease deals every month. These are deals in which the company has discounted the lease price, lowered the money factor, and raised the residual value. All combined, these factors make for a very low monthly payment. The “catch” is that not all vehicle models and styles have the special deals. It’s usually the lower or middle tier styles. However, as we’ve already mentioned, even non-promotional Honda leases on other models and styles are nearly always good deals. You can check any lease deal you see advertised with this unique Lease Deal Calculator.

4. Lenient lease-end “wear and tear” policy – Lease finance companies always require customers to pay for excessive “wear and tear” on cars that are returned at lease-end. This means large scratches, dents, worn tires, accident damage, and damaged interior. Honda, unlike most other car companies, allows a $1500 “forgiveness” allowance. As long as the cost of repairing the damages or wear doesn’t exceed $1500, the customer pays nothing. Otherwise, the customer only pays the costs that exceed $1500.

5. No lease-end disposition fee – Nearly all lease finance companies charge a lease-end “disposition” fee that is an administrative cost associated with handling the returned vehicle. It’s usually about $350 and is sometimes charged even if the customer chooses to purchase the car at the end of the lease. Honda does not charge a disposition fee.

6. Reasonable front-end acquisition fee – All car leases have an “acquisition” fee which is a finance “origination” fee or “bank” fee. It is nearly always included in the overall cost of the lease, although some companies require it to be paid in cash at the time of lease signing. Honda charges a modest $595 and includes it into the cost of the lease. Other car lease companies often charge more.

7. GAP protection included in leaseGuaranteed Asset Protection (GAP) insurance is included at no extra charge in Honda leases. It protects lease customers if the vehicle is stolen or totaled in an accident during the lease. Although it has been traditionally included for free in car leases, some car companies have moved to charging an extra fee for GAP.

Summary

Honda is a very “lease-friendly” car company. It’s leases are nearly always excellent, often outstanding, deals. For automotive consumers who are interested in finding an affordable lease on a top-notch vehicle, they would do well to consider Honda.

P.S. This is not an advertisement or paid endorsement for Honda. We have to financial interest in Honda and provide this information as a service to our readers.

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