Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 07-31-2015, 01:18 PM   #21
Thinks s/he gets paid by the post
Big_Hitter's Avatar
 
Join Date: May 2013
Location: In the fairway
Posts: 4,099
Quote:
Originally Posted by pb4uski View Post
The last time, I was at the dealership, wrote out a check for what I thought was a reasonable out-the-door price and handed it to the salesman and told him i would sign it if we had a deal, otherwise I was going home. That's the car I currently drive.
man I can't wait to do that next time I buy a new car - may be a while tho
__________________

__________________
Swing hard, look up
Big_Hitter is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-31-2015, 01:21 PM   #22
Thinks s/he gets paid by the post
Big_Hitter's Avatar
 
Join Date: May 2013
Location: In the fairway
Posts: 4,099
Internet quote:


"The MSRP price is $49,555. I could offer an agressive price
of $46,500 if you were interested in doing business today."


I bet I could squeeze a few more grand out of him - that's his beginning offer
__________________

__________________
Swing hard, look up
Big_Hitter is offline   Reply With Quote
Old 07-31-2015, 01:45 PM   #23
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,284
Quote:
Originally Posted by pb4uski View Post
Agreed.... I focus on an out-the-door price as well. My favorite "ploy" is to write the dealer out a check for what I am willing to pay out-the-door and watch them cringe.

One time, we were at an impasse on price so I wrote a check for my last offer plus 1/3 of the difference between us and dropped it off at the dealership on my way to work with instructions to either call me and let me know when to pick up the car or to rip up the check and mail it back to me. I got a call about 1/2 hour after I arrived at work asking when I wanted to pick up the car.

Another time, with a different dealer, I got a ripped up check back in the mail a couple days later.

The last time, I was at the dealership, wrote out a check for what I thought was a reasonable out-the-door price and handed it to the salesman and told him i would sign it if we had a deal, otherwise I was going home. That's the car I currently drive.

As you mentioned, it sometimes works and sometimes does not...


I had a coworker who did this with cash (back in the early 80s).... he said he laid out $100 bills across the salesman's desk.... said the salesman looked at the money... then piled it up and handed it back to him... he said he bought a different car somewhere else....
__________________
Texas Proud is online now   Reply With Quote
Old 07-31-2015, 01:55 PM   #24
Thinks s/he gets paid by the post
 
Join Date: Nov 2006
Posts: 2,268
Quote:
Originally Posted by Big_Hitter View Post
Internet quote:


"The MSRP price is $49,555. I could offer an agressive price
of $46,500 if you were interested in doing business today."


I bet I could squeeze a few more grand out of him - that's his beginning offer
You said you could get it for $40,000. I said Edmunds true market price is $46,218. Looks like my price is a lot more realistic. No way you're getting a few grand lower. A few hundred sure. You might even get him down to $45,500. I'd be shocked if he would sell it lower than that.

I also got 3 years of free maintenance thrown in.
__________________
utrecht is offline   Reply With Quote
Old 07-31-2015, 01:58 PM   #25
Thinks s/he gets paid by the post
Big_Hitter's Avatar
 
Join Date: May 2013
Location: In the fairway
Posts: 4,099
Quote:
Originally Posted by utrecht View Post
You said you could get it for $40,000. I said Edmunds true market price is $46,218. Looks like my price is a lot more realistic. No way you're getting a few grand lower. A few hundred sure. You might even get him down to $45,500. I'd be shocked if he would sell it lower than that.

I also got 3 years of free maintenance thrown in.
I just handed him a check for $42K and walked away. I'll keep you posted...
__________________
Swing hard, look up
Big_Hitter is offline   Reply With Quote
Old 07-31-2015, 03:13 PM   #26
Thinks s/he gets paid by the post
tryan's Avatar
 
Join Date: Mar 2005
Posts: 2,449
... the mileage restriction is the killer. A leased vehicle would be sitting in my driveway by Nov. I would need a junker to drive at the end of the year.
__________________
FIRE'd since 2005
tryan is offline   Reply With Quote
Old 07-31-2015, 03:26 PM   #27
Thinks s/he gets paid by the post
 
Join Date: Nov 2006
Posts: 2,268
Quote:
Originally Posted by tryan View Post
... the mileage restriction is the killer. A leased vehicle would be sitting in my driveway by Nov. I would need a junker to drive at the end of the year.
A lot of people would go WAY over 10,000 miles. If you would not go over 10,000 until Nov, you could get a 12,000 mile lease. It would cost a bit more, but when comparing it to buying, it still might be about the same since the car would be worth less with more miles on it if you had bought it.
__________________
utrecht is offline   Reply With Quote
Old 07-31-2015, 03:30 PM   #28
Thinks s/he gets paid by the post
 
Join Date: Oct 2008
Location: Naples
Posts: 2,161
I've leased my last five vehicles and will continue to do so. There are no big dollar calculations that go on in my decision making process. I figure the sales tax savings as I am in Florida also. My current car is a 2013 Prius V that gets 41 MPG. Even at 12000 miles/yr that fuel economy saves me $20/month at $2.50/gal. I figure that as part of my monthly payment. This was about a $32000 car. I told the dealer up front that I wanted no money out of pocket. So I'm driving this car for 36 months for $340/ month (including the $20 is in the mpg savings).

I will never drive a vehicle out of the bumper-to-bumper warranty period. Right now that's 36 months/36K miles. That's all we drive so I can do a lease, stay within the warranty period, no tires, no batteries, all oil changes, tire rotations covered, no repairs, no out of pocket costs. I keep the car spotless, do all the service on time, keep the records together and the dealer knows I'll be back with a great vehicle to turn in. I've already received an email from him telling me they are willing to do the switch early if I want to (still a year to go on this lease). Everything considered, I'm a leaser for life.
__________________
JOHNNIE36 is offline   Reply With Quote
Old 07-31-2015, 04:05 PM   #29
Thinks s/he gets paid by the post
DFW_M5's Avatar
 
Join Date: Sep 2003
Posts: 4,982
One other thing to be careful about when leasing, in some jurisdictions you might end up owing annual personal property tax. This can catch many people off guard and the amount may not be trivial.
__________________
Doing things today that others won't, to do things tomorrow that others can't. Of course I'm referring to workouts, not robbing banks.
DFW_M5 is offline   Reply With Quote
Old 07-31-2015, 04:58 PM   #30
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,035
Don't overthink this. Salesman get higher compensation for the lease, which means the margins are way higher, Which means it inefficient for the consumer, all things equal.




Sent from my iPhone using Early Retirement Forum
__________________
dallas27 is offline   Reply With Quote
Old 07-31-2015, 05:37 PM   #31
Thinks s/he gets paid by the post
 
Join Date: Nov 2006
Posts: 2,268
Quote:
Originally Posted by dallas27 View Post
Don't overthink this. Salesman get higher compensation for the lease, which means the margins are way higher, Which means it inefficient for the consumer, all things equal.




Sent from my iPhone using Early Retirement Forum
Or...they know they will make money twice. Once when the car is leased and again when they get the car back and sell it as a lease return. If they sell the new car outright, the odds are much lower they will get a well kept low mileage vehicle back to sell again.
__________________
utrecht is offline   Reply With Quote
Old 07-31-2015, 05:44 PM   #32
Recycles dryer sheets
 
Join Date: Jul 2015
Posts: 134
Quote:
Originally Posted by utrecht View Post
I dont know all the answers, not being in the car business, but I could ask the same question about buying a car. How do they make money selling it at invoice or a few bucs over invoice? I'm sure there's rebates from the manufacturer for volume selling or whatever.
There is a great episode of This American Life where they follow a car dealership for a month. One of the main points was that if the dealership can hit the manufacturer's (somewhat arbitrary) quota for the month, they will make a profit. If not, they don't. I highly recommend giving it a listen here. My conclusion is to always by a car near the end of the month. Those guys are doing crazy things to hit the quota.
__________________
clobber is offline   Reply With Quote
Old 07-31-2015, 06:29 PM   #33
Thinks s/he gets paid by the post
 
Join Date: Mar 2015
Location: Winnipeg
Posts: 1,315
Quote:
Originally Posted by JOHNNIE36 View Post
Everything considered, I'm a leaser for life.
That's exactly why leases exist...they hook some people for life and have them convinced that it's a good deal to repeatedly pay 40% for the first 3 years of a product with a 12 - 15 year life span.
__________________
Music Lover is online now   Reply With Quote
Old 07-31-2015, 07:07 PM   #34
Recycles dryer sheets
 
Join Date: Feb 2007
Posts: 94
NEVER put more than the minimum down on a lease. Ever.

If you wreck that car driving it out of the dealership, the $4500 is gone.

Roll as much as possible into the payment. Put the $4500 into a bank account and draw down from it to make the payment lower.
__________________
ikonomore is offline   Reply With Quote
Old 07-31-2015, 07:52 PM   #35
Recycles dryer sheets
 
Join Date: Oct 2011
Posts: 406
I took a different route. Bought a 1 year old Acura AWD TL that had about 6500 miles on it. Got a 7 yr bumper-to-bumper including door dings and wind shield chips. Paid about $33500 out the door for a car that was originally about $43000 with a shorter warranty.

From now until 2021 I just pay for gas, oil, etc.

The ability to use manufacturers own web sites to search lightly used inventory coming off leases is incredibly powerful. Gives a good sense of regional inventory and price ranges all in one place.
__________________
Luck is when Preparation meets Opportunity.
Closet_Gamer is offline   Reply With Quote
Old 07-31-2015, 08:37 PM   #36
Thinks s/he gets paid by the post
 
Join Date: Nov 2006
Posts: 2,268
Quote:
Originally Posted by ikonomore View Post
NEVER put more than the minimum down on a lease. Ever.

If you wreck that car driving it out of the dealership, the $4500 is gone.

Roll as much as possible into the payment. Put the $4500 into a bank account and draw down from it to make the payment lower.
If you wreck the car driving out of the dealership you're going to be upside down no matter if you bought or leased or how much you put down.

You're statement is the same as saying never pay cash for a car.
__________________
utrecht is offline   Reply With Quote
Old 07-31-2015, 08:50 PM   #37
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,284
Quote:
Originally Posted by clobber View Post
There is a great episode of This American Life where they follow a car dealership for a month. One of the main points was that if the dealership can hit the manufacturer's (somewhat arbitrary) quota for the month, they will make a profit. If not, they don't. I highly recommend giving it a listen here. My conclusion is to always by a car near the end of the month. Those guys are doing crazy things to hit the quota.

LOL.... this was back in 85, but I knew a guy who got a significant discount to buy a car just because of this....

He had 'purchased' the car... and was going to come back the next day to sign the paperwork... something happened and he had to miss that and went the next day, which was another month.... well, his financing fell through... they tried to get him to put more money down, but he refused and was just going to not buy.... well, they dropped the price by almost $2,000.... and this was on a $15K car that he already had a good deal on...

When we asked the salesman at another time when we went in for service, he said that it was the car that made the quota.... and the date of his sale was a few days earlier and there was no other car they could get into the prior month... so they just discounted the car until his credit went through and he could buy the car.... dated 3 days earlier....
__________________
Texas Proud is online now   Reply With Quote
Old 07-31-2015, 08:54 PM   #38
Thinks s/he gets paid by the post
nash031's Avatar
 
Join Date: Jun 2013
Location: Coronado
Posts: 1,488
Quote:
Originally Posted by Music Lover View Post
That's exactly why leases exist...they hook some people for life and have them convinced that it's a good deal to repeatedly pay 40% for the first 3 years of a product with a 12 - 15 year life span.
Some people want to drive a new car every 3 years and can afford to and will still retire plenty early. There are a lot of people with a lot of different means out there, and sometimes carrying a $750/mo lease payment for eternity along with everything else is still LBYM.

It's LB***Y***M not LBSomeoneElse'sM.
__________________
"So we beat to our own drummer in the sun;
We ask for nobody's permission to run.
I just wanna live in a world like that;
Now I'm gonna live in a world like that!" - World Like That, O.A.R.
nash031 is offline   Reply With Quote
Old 07-31-2015, 08:59 PM   #39
Recycles dryer sheets
 
Join Date: Jul 2015
Posts: 134
Quote:
Originally Posted by Texas Proud View Post
When we asked the salesman at another time when we went in for service, he said that it was the car that made the quota.... and the date of his sale was a few days earlier and there was no other car they could get into the prior month... so they just discounted the car until his credit went through and he could buy the car.... dated 3 days earlier....
Spoiler Alert: In that episode the dealer is trying to hit 129 cars for the month. With a couple days left they are 10+ cars short and start calling relatives etc. Finally they get the 129 and are so relieved. There is a small celebration and you can practically hear the salesmen grinning. Right after 129 is sold, someone walks in and buys #130 very quickly. No big deal, they just can't believe someone walked in and bought #130 so fast.

They turn in all the paperwork to the manufacturer. It turns out, the dealer had miscounted and had really only sold 129. It was that last guy who walked in and bought what they thought was #130 which was really #129. That got the dealership the multi-thousand dollar bonus.

From their website, "When you look at the numbers, the average car they sell in the last two days actually loses money"
__________________
clobber is offline   Reply With Quote
Old 07-31-2015, 09:54 PM   #40
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,450
I've never leased a vehicle before.... always bought used or new.

However, today's lease deals look pretty attractive. As an example, I'm looking at a 36 month lease on a AWD Toyota Venza LE (I realize that Toyota is phasing out the Venza but there are similar examples out there and I just want to see if I am thinking about this right).

Quote:
Lease a new 2015 Toyota Venza for just $214 a month. 36 Months -month closed end lease on Venza 2015 Models 2820. $2,999 due at signing which includes first month’s payment of $214, acquisition fee of $650, customer capitalized cost reduction of $4025, security deposit of $0, and assumes $1890 lease bonus cash direct from Toyota is applied to due at signing. Lease vehicle includes the following optional equipment: 50 State Emissions, Carpet Floor Mats. $25345.84 adjusted capitalized cost assumes dealer participation, which may vary. MSRP $31540 includes destination charge. Your payment may vary depending on final price. Base monthly payment of $214 does not include tax. Taxes, license, title, insurance, regionally required equipment, and other dealer’s charges are extra, and are not included in the amounts shown. Excludes $350 disposition fee due at lease end. Lessee pays maintenance, excess wear and tear and $0.15 per mile charge for all mileage over 12000 miles per year. Lease end purchase option $17662.40.
TrueCar suggests an estimated price to buy a similarly equipped Venza with a MSRP of $31,810 is $26,166 and the adjusted capitalized cost is at the low end of their graph, so the $25,346 capitalized cost seems reasonable to me. Make sense?

Also, the estimated depreciation on a 2015 Venza LE AWD for the first 3 years per Edmunds True Cost to Own is $9,827 but their cash price is $30,337 for that vehicle. So the undepreciated cost after 3 years of $20,510 is 68% of the $30,337. Applied to the $25,346 initial capitalized cost, the undepreciated cost after 3 years would be $17,135, which suggests to me that the $17,662 residual value is in the ballpark. Make sense?

So if I bought this car for cash, let's say that my opportunity cost of funds is 4% so I am losing $3,164 of investment earnings if I buy rather than lease. (actually probably more since I would not change my AA and I expect to earn more than 4%, but that is a whole different thread so let's assume 4% for now). If I buy rather than lease, then I'll also have $7,684 of depreciation (roughly the capitalized cost of $25,346 less the residual value of $17,662). So combined, those costs would be $10,848.

If I lease, I'll pay $2,999 up front and $214/month for 35 months (the first month is in the $2,999, I think) and a $350 lease disposition fee, or $10,839 ... about the same as the cost of owning......and I'll still have the "option" to buy the car for its residual value of $17,662 three years from now.

We only drive about 10,000 miles a year and the lease allows me 12,000. All in, then lease sounds like a sensible deal to me. What am I missing?

2015 Toyota Venza LE: True Cost to Own | Edmunds
__________________

__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Buy or Lease a car? utrecht FIRE and Money 77 04-22-2015 07:12 PM
Buy vs Lease - Travel Car Idnar7 Other topics 53 04-18-2012 09:31 AM
End of Car Lease Situation JOHNNIE36 Other topics 1 04-03-2011 03:52 PM
Thoughts on buy or lease new car, Technology changing fast rjk514 Life after FIRE 62 01-25-2007 08:50 PM
Pay cash from IRA or lease car popyee FIRE and Money 12 05-15-2004 04:28 PM

 

 
All times are GMT -6. The time now is 01:03 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.