Honda Civic and Toyota Corolla represent the bread and butter in North America’s automotive industry. While consumer satisfaction rates high for both maker’s entry level 4 door sedan, as to the $ bottom line for the dealer, at the time of sale, profit margins are low. And frankly. your friendly local Honda and Toyota dealership, often owned by the same dealership group, hope to move you up into a premium vehicle with greater features and bottom-line priced add- ons. While prospects shop for bargains, sales people will point them to this vehicle.
Looking to the market a majority of entry-level cars and trucks are purchased
That’s O.K., car salesman tend to steer prospects into low interest, long-term purchases. That’s business, and most consumers have a fairly good idea as to how the auto-sales game works. Car dealers must generate a profit to stay in business. And, by accepting your low Blue Book trade-in valued used car, then applying the proceeds of that trade-in to an often option-rich, extended warranty, inclusive purchase deal, Dealers generate a reasonable return on another wise low profit margins entry-level car sale.
Show me the money
So, with Honda advertising 2015 Honda CVT LX @ $149 per month, (36 month closed end lease) and Toyota offering Corolla S + for $179 per month, (24 month closed end lease) for less than a 6 inch sandwich meal deal at Subway, or 2 premium cups of coffee at your local Barista, how does the #1 and #2 selling brands in North America do it?
More importantly: How much car does one get for $6 per day, are there any hidden cost, can I qualify and is leasing financially advantageous over purchasing?
Cash on hand, trade-in, and miles driven per year
For most consumers when comparing a rather entry-level Civic CVT LX or Toyota Corolla S+, it will come down to brand loyalty, mom and dad’s opinion, color choices, or perceived aesthetic value. Both vehicles offer “good value,” exceptional fuel economy, reasonable comfort, safety and performance.
While Corolla features a bit more legroom for rear seat passengers, Honda Civic presents a bit more horsepower, and a more-refined grown up exterior styling. I found Civic’s ride and interior noise level to be the winner here, while appreciating the Corolla S for its rim design, dashboard monitor balance and utility.
I personally prefer the front end design of the Honda Civic over the Baleen Whale grin of the Corolla, but that’s a personal thing; and has little to nothing to do with the overall appeal and operation of the car. Both makers offer exceptional lease terms on arguably the highest residual valued compact sedans in the industry.
So what’s the hook?
However when looking to a “short-term” lease, Toyota offers a 24 month deal on Corolla, Honda doesn’t. But that’s just a very small part of lease consideration, when sometimes “less is more!” Many buyers appreciate the flexibility of a short term lease. In a perfect (low mileage) world, one can walk away from their current ride after 24 month unscathed. Note that “low mileage” notation.
When leasing a vehicle, both Honda and Toyota will ding you 15 cents per mile driven over the allotted 12,000 miles per year. I’ve yet to meet a lessee that has stayed within the mileage allotment. An additional 500 miles per month over the term of a 24 month lease will cost you $1800. And, 36 months= $2700, unless you purchase your vehicle at the end of lease; which is counter to why most consumers lease to begin with. Note: You may adjust the annual mileage allotment when structuring a lease, caution advised.
Honda/ $2499, Toyota/ $2128 + Sale Tax, Licence and dealership Fees
One can anticipating parting with $3,000 + dollars on either maker’s lease deal. Honda does offer a “ Zero Due” at lease signing, ($220 per month for 35 months) but you’ll be responsible for DMV, sales tax and dealership fees, if any. Honda doesn't offer a 24 month lease, that we can identify, anyway.
We discover the hook!
Toyota may have an added enticement here by including “Toyota Care” in their 24 month lease deal; offering free roadside assist, and basic safety check, oil change and tire rotation and reliable rid, all for approximately 15% out of pocket and $179.00 per month.
What Honda Civic offers is a bit more visual refinement, horsepower, torque, quiet, road stability and lower monthly lease payment, but you have to sign on for 35 months to get it. It’s a toss of the coin as to the end of lease value.
For those wishing to purchase their ride at the end of lease term, Toyota will charge you an additional $1446.00 to purchase the Corolla, over what Honda will charge for the Civic, but the Corolla will be a model year newer. Twisty, isn’t it?
So, knowing that when the smoke clears, Civic and Corolla pencils out to be near par, it’s important to look to the standard and added features of the offered vehicles, weigh the budgetary monthly payment against the returned joy and comfort of car ownership.
Drive both offerings,ask your Honda dealer to match Toyota’s service offer and then make a qualified decision as to offering fits your personal needs. This competition’s too close to call for Torque News.
* Photo courtesy of Richmond Toyota