Honda Financing Deals

About Honda Financial Services

As an overall company, Honda doesn’t specialize in automobiles, rather, it specializes in engines. Honda aircraft, power equipment, boat engines, cars and motorcycles are sold all over the world and the company had $174 billion in assets at the end of March 2017.

Honda uses its financial arms as a tool to help customers buy its products, from automated lawn mowers to private jets.  

About Honda financing

America Honda Finance Corp. offers financing and leasing on new Honda and Acura vehicles, as well as Honda certified pre-owned vehicles. To qualify for Honda finance, you generally need at least a 610 credit score. To qualify for the best Honda financing deals, you usually need at  710 credit score, though America Honda Finance Corp. does take other factors into account such as the loan-to-value ratio on your new car and how much debt you have compared with your income. The more “financially healthy” you are, the more likely you are to get a great loan offer.

If you’re unsure what your credit score is, you can check your credit score for free here, try our auto payment calculator to see how a new car might fit into your budget and, if your credit isn’t so hot, read about how to get an auto loan with poor credit.

Financing directly through Honda

To apply to Honda financing through America Honda Finance Corp., you’ll need your Social Security number, savings and checking account numbers, employment information, the down payment you’ll give (if any) and the model of car you want. If you’re not sure which car you want, you could apply for a preapproval with Honda finance. In a preapproval, Honda lets you know based on your information if you qualify to finance with them and what your APR and loan term will likely be. You could get a firm loan offer once you tell them exactly which car you’d like.

The loan terms with Honda finance usually range from 24 to 72 months and can go up to 84 months, although such a long auto loan isn’t recommended.

Honda finance also offers the Leadership Purchase Plan, which is like a balloon loan, whereby you make small payments for a set term (24 to 48 months) and at the end of the contract, purchase, return or trade in the vehicle.

Rebates and incentives

Honda financing offers a few rebates on its vehicles and you can’t always combine them. The time periods when these Honda rebates and incentives are available and the vehicle models they apply for may change often, so be sure to look up whether they apply to the car you want. Here are the main types of rebates and incentives Honda offers, and their general requirements.

• College Grad Program: If you graduated in the last two years or will graduate in the next six months, you may be able to get a $500 grad rebate and defer payments up to 90 days when you finance or lease a new car from Honda Financial Services. You do have to be currently employed or show that you will be employed within 120 days of signing the contract.
• Military Appreciation: The $500 Honda military appreciation is for active U.S. military members, U.S. military ready reserve and retirees, U.S. military veterans within one year of separation from active service and their spouses. You can use it toward a new Honda lease or purchase with Honda Financial Services.
• Honda Loyalty Benefits: If you are a returning lease customer, Honda can provide a waiver on the turn-in fee and waive up to $1,000 on excessive wear and use or damage. Some dealerships sponsor loyalty rewards programs tied to vehicle service and maintenance as well.
• Special financing: For well-qualified buyers with a high credit rating (710+), there are often low APR financing specials, such as 0.9% APR for 60 months.

This is not an exhaustive list of requirements for Honda rebates and incentives. Visit the Honda website or a Honda dealer for more information.

Leasing

Honda’s lease program is called Honda Leadership Leasing. Its terms range from 24 to 60 months, with mileage limits from 12,000 to 15,000 annually. Like with most auto leasing, you do have options to purchase more miles at lease signing, but if you don’t use them, you won’t be refunded for them. If you’re unsure on whether leasing is right for you, check out this guide on leasing versus buying.

Honda also offers One-Pay Lease, in which you make a single payment for the entire lease term. This is usually a very large payment. When you lease, you’re not really renting a car; you’re buying a large chunk of its life at once and then financing it, or, in this case, paying for it in cash. The benefit of paying cash is that you’re not paying interest to finance, but you can only get that benefit if you can afford the large cash payment required in a one-pay lease.   

The exact amount you pay depends on the residual and the agreed-upon price of the car. The residual is the percentage of what the car will be worth at the end of the lease. For example, if the car you want to lease is priced at $20,000 and it will be worth $10,000 at the end of the lease, that means it will only be worth half of the current price, so the residual is 50%. To one-pay lease the car, you will pay 50% of the price, plus taxes and fees all upfront.

When the lease term ends, whether you did a one-pay lease or a regular lease, you can trade it in, return it or purchase it. If you trade it in, make sure you pay attention to any special offers going on at the time, which may involve multiple fee waivers.

Alternative options for Honda financing

If you’re looking for a new vehicle, don’t just apply to one lender. Consider a few lenders and compare offers to see which is the best for you, whether it’s the one with the lowest monthly payment or the one with the lowest APR.

You could get preapproved for an auto loan without knowing exactly which car you want. Being preapproved may give you an idea of the price range you should be shopping in for a vehicle, and it gives you greater strength to negotiate. For example, if the dealership salesperson tells you they can only get you a loan with a 5% APR and you have a 3% APR loan preapproval in your pocket, your decision becomes easier. Having a preapproved auto loan could save you money and help you walk into the dealership with more confidence.