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Honda Financial Services Review

Dena Standley | January 05, 2024

Dena Standley
Legal Expert, Paralegal
Dena Standley, BA

Dena Standley is a seasoned paralegal with more than 20 years of experience in legal research and writing, having received a certification as a Legal Assistant/Paralegal from Southern Technical College.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: Honda Financial Services provides financing for leasing and purchasing Honda and Acura automobiles. APRs depend on an individual's credit score, the type of vehicle, and whether you are leasing or financing.

Honda has been manufacturing motorcycles and other vehicles since 1949. Over the years, it has earned a reputation for building durable and efficient cars. It is no wonder that many Americans are thrilled to own a Honda.

If you want to lease or finance a Honda or Acura vehicle, using Honda Financial Services, also known as American Honda Financial Corporation (AHFC), may make the most sense. The auto financing company works with authorized dealerships to enable consumers to own or use vehicles by providing in house financing.

Interested consumers may wonder which option is best—to lease or to finance. This article explores both possibilities. It will also explain the perks and downsides that come with either choice, and explore the pros and cons of Honda Financial Services.

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What is Honda Financial Services?

Honda Financial Services (HFS) pre-approves prospective clients for specific products. Pre-approved customers can then walk into the over 1,000 dealerships countrywide, knowing how much financing they qualify to receive, and the interest rate they will pay.

Most consumers, unless you have excellent credit, must make a down payment to purchase a Honda or Acura. You can then clear the balance over the loan term. HFS offers loan terms between 24-72 months.

Some states allow leasing customers to pay sales taxes as part of monthly installments. If this applies in your state, you may not have to pay any money down.

You can also buy or lease a certified pre-owned (CPO) Honda.

Here is why you may like Honda Financial Services

Honda Financial Services stands out as an auto loan provider for several reasons.

The buy or lease flexibility

It is almost impossible to get your bank to lease a car. They prefer traditional financing, where you eventually own the vehicle. But Honda lets you use a car for a time before turning it in. If you are considering leasing vs. buying, consult the table below that discusses the pros and cons of each.

Online pre-approval

HFS lets you apply pre-approval online. You can also download the application if you prefer to do it offline. You must provide personal details and describe your desired vehicle.

Lower interest rates

Every customer can see their Annual Percentage Rate (APR) on the front page of their contract.

HFS generally charges reasonable interest rates on its loans. However, interest rates for vehicles have climbed in recent years due to the domino effect of the Federal Reserve raising interest rates. As with most lenders, consumers with below-average credit scores, or those unable to make a down-payment, can expect higher APRs.

Some Honda dealerships also have periodic offers that may include a 0% APR. However, the 0% APR offers usually apply to those with excellent credit and often have several strings attached. Be sure and read the contract carefully before accepting a 0% APR.

Loyal customers get waivers

Customers who lease or buy another Honda or Acura within 30 days before or after the turn-in date can get up to $1,000 in waivers.

Leasing vs. financing a Honda or Acura

Businesses may prefer to lease rather than buy. For one, they get tax deductions on leased vehicles. Using a car at its prime makes sense because this can reduce repairs and maintenance needs. Conversely, an average consumer who typically keeps the same car for five or more years may prefer to pay off the loan and keep the car.

Remember that customers have a choice at the end of a lease term. They can return the car and terminate the lease or replace it with another. Honda Financial Services also allows leaseholders to purchase the vehicle if they feel it is a worthwhile investment.

The following table summarizes those differences.

Honda Leasing vs. Financing
Leasing Financing
Low or no upfront payment Typically higher down payment required
Annual mileage limit of 10,000 - 12,000 No mileage limit
You drive a new car often You eventually own the car
It's easier to upgrade to a new vehicle if your needs change You can customize the appearance of your car to your liking.
Businesses may receive tax deductions. You can trade in your car as a down payment when you decide to purchase again.
You can take a one-pay lease.

What are the cons of working with Honda Financial Services?

Consider some disadvantages of using Honda Financial Services.

  • You can only finance Honda and Acura automobiles.
  • Loan and lease terms vary with every dealership.
  • HFS reports to the major credit reporting bureaus. So late payments can ruin your score.

For consumers who choose to move forward with Honda Financial Services, choosing between leasing and financing is the next step. Your decision depends on your specific needs.

Financing makes the most sense if you typically keep a car for over five years. The more you pay the loan, the more equity you gain on the vehicle. However, a lease would work best if you prefer changing cars more often. You also enjoy driving new cars frequently.

Dispute errors on your credit report.

Fellow consumers have also left reviews that can further inform your decision.

What do consumers say about Honda Financial Services?

Many complaints on HFS Better Business Bureau (BBB) are about customer service and delays in releasing titles. Consumers feel they can never get issues solved when they call and often stay on hold for too long.

Here is one complaint from Honda Financial Services’ BBB profile:

"On 5/16/23, I elected to buy out my lease on a 2020 Pilot and wired the required funds and odometer statement. Funds were immediately credited, and after seven calls, I am still waiting on the title. I was promised on 6/16/23 that a two-day ***** would go out on 6/19/23. As of today's conversation, it won't go out for several more days."

Honda Financial Services has received more than 800 complaints in the past three years. Incompetence, rudeness, and a slow response time for customer service seem to be recurring themes. Another complaint states:

“I paid Honda Finance $21,740.20 in July 2022 to purchase my lease. I have not received the title to my car. I have called and spoken to at least a dozen people over the last ten months, trying to resolve this. No one has fixed the problem. No one calls me back. I have received another person's title twice, which indicates some error on their end.”

Understanding your contract

It's best to read your contract carefully before signing, whether leasing or buying a vehicle. Doing so opens your eyes to the fine print, preparing you for unexpected turns. It is easy to get carried away in the excitement of a new vehicle. However, take your time with the contract, and seek an explanation for any terms that you do not understand.

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