Honda is normally not a big spender when it comes to incentive programs. That changed when it started its “The Really Big Thing Sales Event,” which will run until May 3rd. The deals are quite good: no money down and no security deposit required on all Honda car and truck leases. Certain vehicles will also have either 0.9 or 1.9 percent APR financing options.
Honda’s goal is to provide consumers “a favorable money factor” while making a profitable cost reduction payout. Spokesman Jon Fizsimmons stated that the automaker already has high residual values, so they are not financing the residual values of their cars.
The company is spending an estimated $204 million on the incentive program. This is lower than their Japanese competitor, Toyota, who is spending about $395 million in April. Both companies’ programs cost significantly less than American companies Ford and GM.
While it seems like Honda is recklessly spending when compared to their record, the cost is actually less than it seems. The lowering cost of money and a used car market that is better than previous years make the actual money spent up from significantly lower for the company. The program could have ill effects though, as reducing the price of a new Honda below the level of a used Honda could drive their current value down.