Honda Car Finance offers financial services to Honda car buyers at low rates of interest both for the old and new cars. The financial services rendered by Honda rest on:
The nature of the product it is financing.
The needs of the respective customers.
Brief History
The American Honda Motor Co. happens to be the only authorized distributor of Honda motor vehicles in the United States. The American Honda Finance Corporation is an auxiliary of the American Honda Motor Co. The American Honda Motor Corporation is again a subsidiary of the Japanese Organization- Honda Motor Company.
The American Honda Finance Corporation started:
- Functioning from July 1980.
- Providing wholesale financing to the authorized Honda motorcycle dealers.
- Financing Honda power equipment in 1983.
Leadership Purchase Plan
To make automobile financing more elastic, the Leadership Purchase Plan has been introduced. In this plan the monthly down payments are small as compared to other automobile financing schemes. The monthly depreciation and the financial charges constitute the total monthly payment. The duration of this Plan ranges from 24 to 48 months. At the expiry of the first contract the buyer is free to buy a new car by returning the old after transferring ownership to Honda Financial services.
New Car Financing by Honda
The American Honda Finance Corporation finances both old and new cars. In the case of new cars, approximately, 70% of the purchases are financed. This will definitely attract any buyer planning for a Honda car unless stringent on paying in cash. One should take advantage of the various schemes offered by Honda on new cars if he aims at maximizing savings.
We may witness the financial incentives offered by Honda depending on different car models.
Low Interest Finance Terms of different car Models of Honda
| Model Name |
Low Interest Finance Terms
|
| Honda Accord |
2.9% (24 months)
|
| Honda Civic |
2.9% (24 months) |
| Honda Element |
3.9% (24 months), 4.9%( 36 and 48 months)
|
Here we see that the American Honda Finance Corporation has been a boon to Honda car buyers of America. But this organization is not free from criticisms.
Discrimination against African Americans and Hispanics in Auto Loans
The African Americans and Hispanics are victims of high mark up interest rates. When the car buyers opt for financing their car loans through auto dealers, the lender quotes the dealer a buy rate or the finance rate at which the buyer is sanctioned the car loan. But when the dealer quotes the buyer he makes a hike in this buying rate to a mark up rate and pockets the difference between the two.