I went to my local Honda dealer to check out a 2WD Prologue Touring lease. Their first offer for a 24-month lease with zero down was $865 a month… almost $21,000 total. After doing some research on this forum, I found a $6,999 lease deal at Lester Glenn Honda. I sent it to my local dealer since they claim they match advertised prices. They just got back to me, agreeing to match the deal, with an extra $1,030 for tax, tags, and title, making it a total of $8,030 for a one-pay lease. This covers 10k miles per year and includes gap coverage, so please don’t tell me a one-pay lease is a bad idea because I’d lose everything if the car is totaled. They also provide a loaner car when needed, which is a big plus. I asked for a 36-month one-pay quote, but I haven’t heard back yet. This will be my company car, meaning the lease payments are a tax deduction. It also comes with $750 in EVgo charging credits, and I have $24k in equity in my current car, which I’ll put into a dividend fund.
A lot of people think a lease is a total loss if the car gets wrecked, but that’s not true. Insurance pays the value of the vehicle (ACV) whether you lease, finance, or own it outright. If the ACV is higher than what you owe, you get the difference. If it’s lower, gap insurance covers it.
It doesn’t mean a one-pay lease is risk-free, but you won’t lose everything on day one if the car is totaled.
@Gavin
Prepaying a lease isn’t the same as putting money down. It’s just paying the lease upfront, and from an accounting perspective, it’s considered ‘unearned rent’ spread across the lease term. If the car gets totaled, the unused portion is refunded. A lot of people mix this up.
@Hart
Yeah, exactly. People assume it’s the same thing.
You’re misunderstanding how gap coverage works. If you total the car in the first week, your money is gone along with the vehicle. The only way you’d get any money back is if the at-fault party’s insurance reimburses you or you have a replacement policy. Gap insurance just makes sure you don’t owe extra money to the leasing company—it doesn’t pay you anything.
One-pay leases are good if you have extra cash and want some tax benefits, but they come with risks. If there was no risk, they wouldn’t be cheaper than a standard lease.
@Fallon
That’s not how it works. The unused portion is refunded.
Hart said:
@Fallon
That’s not how it works. The unused portion is refunded.
People don’t realize that Honda’s one-pay lease refunds the unused portion, unlike putting a big down payment on a regular lease.
@Nico
Yep, a lot of people confuse putting money down on a lease with prepaying a lease.
Hart said:
@Fallon
That’s not how it works. The unused portion is refunded.
Let’s break this down with an example (these are just rough numbers):
- Residual: $25k
- Total cost: $35k
- Taxes: $2k
- Lease cost: $10k
- You prepay $12k
If the car gets totaled in a week and the ACV is $28k, after everything is settled, you might get the tax money back at most. If the ACV is $23k, gap covers the $2k difference, but you’re not getting any money back.
@Fallon
I hear you, but that’s not correct.
It is correct. Gap insurance never gives money back. It only covers negative equity. You’re misunderstanding how it works.
It is correct. Gap insurance never gives money back. It only covers negative equity. You’re misunderstanding how it works.
Gap insurance covers the difference between the car’s value and what’s owed—it protects the lender, not me. But if I didn’t have gap, I’d be on the hook for the difference. One-pay leases don’t lower the car’s capitalized cost, so my money isn’t just gone if the car is totaled. The payments are held in escrow and refunded if not used. I understand how gap works, and I think you do too, but I don’t think you understand how a one-pay lease is structured.
@Hart
I do understand how one-pay leases work, but I haven’t seen anything in Honda’s one-pay terms that guarantees a prorated refund. So it really comes down to how the lease is structured.
@Fallon
For the 24-month lease, it comes out to $291 per month for the Touring AWD. That’s $39 more per month than your EX AWD on a 36-month lease. They’re supposed to send me the 36-month numbers soon, and I expect those to be a little better. Either way…