May 1997

Finishing First!

May 20, 1997 A Newsletter By Colin Sato Volume 1, Issue 3

As anybody who has shopped for a car recently knows, cars are getting pretty expensive. In order to combat these higher prices, dealers have been moving toward longer and longer financing terms. In the short history of the automobile (100 years or so), most of our purchases were cash. As cars increased in price, we turned to financing. First it was 3 years, then 4,5 and 6 year loans. Now, we seem to hear a lot about leasing. How can you decide when a lease works for you? When is it better to do an outright purchase?

Customers always ask me, what exactly am I paying for in a lease? To put it simply, your monthly payment covers the amount of the depreciation plus a small service fee. Here is another way to look at it: If the typical car can last 10 -15 years, and you sell it after your five year loan is complete, you PAID for 15 years, but only used five!

In a lease, you do not purchase the vehicle, instead you contract to use it for the first - and best - part of its life. You remember what it was like...things never break, wear and tear hasn't taken it's toll yet, and if something did happen, it's covered under warranty. The best part.

At the end of the lease period, you return the car with "normal wear and tear" and "within the mileage allowance" and there is only a small disposition fee, and your obligation is complete. "Normal wear and tear" can sound pretty ambiguous, but relax, you and I both know what is "normal." Door dings and small scratches are normal over the three or four years of the lease, a bumper dragging on the ground or a fender smashed in is not!

Regarding the mileage allowance: many people fear a lease because they have heard that you can only drive a certain amount, and there are severe penalties if you go over your limit. This is simply not true. Our leases are generally calculated on a 12,000 or 15,000 mile per year usage, and that seems to be enough for most of our customers. However if you go over your contracted amount the charge is only 15 cents a mile. Please remember the mileage cap only applies to cars returned to American Honda Finance Company. If you trade the car in, (to any dealer, but hopefully Pflueger Acura), sell it through the newspaper, or purchase it yourself, the mileage on your car is not important.

Each person has their own reasons for deciding to lease, but they all seem to fall into a few general categories.

	Less cash down: When you initiate a lease, there is usually less cash down at the start. This frees your money for other investments or uses. This can be advantageous for the person who can afford a monthly payment, but doesn't have the cash reserves for a substantial down payment.
	Lower monthly payment: If you finance for the same term (for example, 36 months) your monthly lease payments will be MUCH lower. This is because you are only contracting to use the car for the first three years. ( As opposed to buying 10-15 years)
	Drive a new car more often: Because the lease term is usually shorter than a conventional loan, you are able to get a new car more often. This means that you are always driving a car that is under warranty, which is more reliable thus giving you more peace of mind.
	Option to Buy: With an American Honda Preferred Luxury Lease, you have the option to purchase your vehicle at the end of your contract. There are no questions about how well the previous owner treated the car, whether the routine maintenance was done as required, or if it was involved in an accident. You could never be more sure about a pre-owned purchase.
	Gap Assurance: A standard component of an Acura Lease is Gap Assurance. This means that in the event of a total loss accident or theft of the vehicle you are not responsible for the difference between the Blue Book value and the amount that you may owe.

Of course, I understand a lease is not right for everyone - if you are the type of owner who keeps their car for 10 years or more, or might have a reason to terminate early (within one year or less) an outright purchase would probably be best.

As you can see there are many things to consider when deciding if a lease is right for you. I recommend a personal consultation to review your purchase options, we can take the time to evaluate your individual situation, and decide on a course of action that will work for you!

Please contact me at work 942-4555. Or via my VoiceStream Cellular/pager 255-1255. I am also on-line so you can e-mail me at 73522.1256@compuserve.com.

Thanks again for all your support.

Acura News

Acura has established a new class of Luxury Automobile. Acura Preferred Pre-Owned Vehicles. These are carefully screened pre-owned cars that meet the most stringent requirements in the industry. The factory has set specifications for these special cars that rival the mechanical and cosmetic standards for our new cars, virtually every system underhood, in the driveline and chassis is checked and serviced according to Acura guidelines. This careful screening assures these cars will meet and exceed your expectations for a used car.

When you see this logo on our pre-owned cars, you will know that you are looking at a special car.

To enhance the appeal of our Preferred cars, and perhaps to reinforce your confidence in the program, Acura has endowed these cars with the following additional benefits:

	You receive the balance of any remaining warranty from the initial "in service" date PLUS and additional 12 months or 12,000 miles, whichever comes first. Cars over 4 years old or with over 50,000 miles qualify for the full 12 month or 12,000 mile coverage.
	Customers have the option to extend the warranty with an Acura Care Preferred Plus Service Contract.
	Roadside assistance is provided for you during the entire time your car is under the Preferred warranty.
	Preferred Pre-Owned vehicles qualify for attractive leasing terms through American Honda Finance Corporation at the same rates as our new cars!

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