Time to Buy a New Vehicle

[Idnar7]

Thanks for all the great replies. Walt34 - thanks for the link to the buying services. I remember that thread but couldn't find it with a quick search. It has been so long since I last bought a car, I still thought three year loans were the standard!! We leased while putting kids through college (generally at about $250/mo)..

[Karloff]

I'm going through a similar debate as the OP, albeit in this case the deciding factor would basically be to keep my wife happy and allow her to drive her dream car. You can read all about it on another current thread on this board, here.

Like most of you, I always paid cash for all my vehicles, but depending on your personal situation, some current lease/finance deals DO make sense, specially if they come with a $0 full-maintenance and service plan.

[tryan]

Quote:

the deciding factor would basically be to keep my wife happy and allow her to drive her dream car.

Tried reading your link ... but you lost me at "I'll drive her to the train station every day".

I feel your pain! Just traded my 2002 Excursion and now drive HER 2001 Forester so she could get the car of her dreams (Mazda CX-9). Thankfully, we have never bought NEW so she expected nothing different. Did get 1.9% financing due to our credit scores on a used car.

[Birchwood]

We're in the process of downsizing. We are going to give my wife's car to my daughter! and will be left with a 5 yr old Honda V6 coupe(23,000 miles)
and my Ford F150 super crew truck, 3 yrs old with only 10,500 miles. My wife does not drive very much and I will prob. be doing most of the road trip driving in retirement. I anticipate to drive both vehicles until 85,000 miles or 8 years old, whatever comes first. We have to do a lot of road trips to make the limit.

[FIREontheMountain]

I bought a new vehicle about a year and a half ago and ended up financing ~40% of the purchase because the loan was offered at 0.9%. I think they pulled my credit and asked me how much I made per year. I do not recall being asked for pay stubs or any sort of documentation. No regrets going with financing even though I had enough cash to cover it at the time.

[Katsmeow]

We did finance a car last year given the very low rate. I had some part-time income and DH has SS and withdrawals from his IRA. We did list the withdrawals from the IRA and called it retirement income. They never asked for anything more.

Now - if we were buying a car this year it might be a different story. He still has the SS income but I don't think I will have much part-time income and we may not take very many - if any - IRA withdrawals this year as we are spending down a taxable account. If we don't decide to do a Roth conversion we will likely have no taxable income for the year. So I'm not sure we could get a loan if we wanted one!

[Dreamer]

We bought DH's new car in 09/12. Toyota was giving a 0% loan and so we took it. I think that we had it for around 8 months and paid it off. We don't like debt either. They just had us fill out a form showing our incomes from our pensions and it went through.

You notice that I said our new car in 2012. We normally keep our cars at least 10 yrs also. My DH had been driving a 1999 and my car is a 2002. My DH's corvette is a 1972, but we don't mind that one being old!

[brett]

Just gave my 97 Camry to my son. 200k miles and in perfect shape. Never a problem.

We will keep wife's 2006 Accord exl. Same story, never an issue. Bought it four years old at exactly have the price of a new model.

Last new vehicle was a 2009 company car. New transmission at 12K miles plus three weeks in the shop. New computer control at 13k miles.

Not so sure that new is so great- especially some of the North American labels.

[ragabnh]

For $40,000 Vehicle, I will certainly consider Toyota Avalon, nothing will beat it for reliability, quality, comfort and quietness at that price level.

[JOHNNIE36]

Leasing works for us. I have a new vehicle every three years, no maintenance cost, you only pay sale tax for the years you use the car ($23.56/mo in our case), get rid of it in three years (or buy it), do it all over again or go to another vehicle. In our case, as we get older, we don't want to drive a vehicle out of warranty and we want to eliminate problems that go with owning a car longer than the warranty. Never have to worry about batteries, tires, A/C problems, etc. Maintenance is included so oil changes, tire rotation, etc. are included in the lease. Keep the money in the bank. No worries!

[Mulligan]

Quote:

Originally Posted by JOHNNIE36 Leasing works for us. I have a new vehicle every three years, no maintenance cost, you only pay sale tax for the years you use the car ($23.56/mo in our case), get rid of it in three years (or buy it), do it all over again or go to another vehicle. In our case, as we get older, we don't want to drive a vehicle out of warranty and we want to eliminate problems that go with owning a car longer than the warranty. Never have to worry about batteries, tires, A/C problems, etc. Maintenance is included so oil changes, tire rotation, etc. are included in the lease. Keep the money in the bank. No worries!

Is it possible to get the good lease rate offered on a vehicle and negotiate the eventual purchase price downward after vehicle goes off lease prior to signing a lease?

[JOHNNIE36]

Ref my last post, next time I'm going to play the game a little differently. When we leased this 2013 Prius V, the dealer was very straight forward, didn't pull any punches, made me some great inclusions in the lease and I just felt comfortable with the whole deal. Looking back at things, next time I'm going to check with PenFed and my local credit union on lease rates. I'm going in armed with info and will lay it out on the table for the dealer to beat. I know the dealer makes money on the lease such as running it through Toyota Leasing Corp. But if I can get say 1.5% loan rate from PenFed, why pay Toyota 3-4%? However, you have to consider everything. If Toyota will throw in the maintenance for three years, what is that worth? Just sayin'. Just thinkin'.

[aja8888]

Quote:

Originally Posted by Mulligan Is it possible to get the good lease rate offered on a vehicle and negotiate the eventual purchase price downward after vehicle goes off lease prior to signing a lease?

The lease amount (part of it) is figured on the residual value at the end of the term. I would suspect that you can only go up from there in price as the dealer will look for ways to discount the returned condition of the car.

[JOHNNIE36]

The residual value of the vehicle is a key component of the lease. You want to lease a car that usually carry a high used value. I try to make a good impression on the dealer from the get go. Never miss a scheduled service visit. When I bring the car in for service, it is clean. At the end of lease, I normally have it detailed and looking spiffy when I drive up. First impression is a lasting one. You want the dealer to say "I'd like to own that car".

[Idnar7]

Johnnie36, do you negotiate at all when you lease or just accept what they offer? We have leased three or four times before, but don't remember any negotiating, other than having them waiving the excess mileage penalty.

[Karloff]

Quote:

Originally Posted by JOHNNIE36 Leasing works for us. I have a new vehicle every three years, no maintenance cost, you only pay sale tax for the years you use the car ($23.56/mo in our case), get rid of it in three years (or buy it), do it all over again or go to another vehicle. In our case, as we get older, we don't want to drive a vehicle out of warranty and we want to eliminate problems that go with owning a car longer than the warranty. Never have to worry about batteries, tires, A/C problems, etc. Maintenance is included so oil changes, tire rotation, etc. are included in the lease. Keep the money in the bank. No worries!

Quote:

do you negotiate at all when you lease or just accept what they offer? We have leased three or four times before, but don't remember any negotiating, other than having them waiving the excess mileage penalty.

We are in a similar situation. Always paid cash for slightly used cars and drove them for many years (last one was a 1999 Acura TL bought for $10K that lasted almost 10 years). At this point in my life, I couldn't care less about cars. They are money pits one way or another, and insurance in our neck of the woods (South FL) is REALLY expensive. But my wife wanted a damn Mini Cooper, and after a bad experience with a previously owned Mini Cooper hardtop (also bought used with cash), there was no way I was going near another one UNLESS it was fully under warranty and with ALL services and maintenance included. BMW/Mini offers just that with their cars, up to 3 years (the duration of our lease). Plus, it's January, so they need to move all the remaining 2013 stock and get them out of the lot as soon as possible. I put ZERO down, and aggressively negotiated the bottom-line, 3-year total, final price of the lease. The dealer said they were actually loosing money on this car. Got it with plenty of toys (not the base car) for a little less than $11,500, bottom line price including all taxes, fees, etc. A Kia Soul (another candidate) would have been significantly more expensive and not as great on gas. We also sold the Acura and downsized to a SINGLE car (I work from home, and my wife takes the train to work now).

I am still an emotional mess over this, though. A part of me wants to believe we made the right choice. Brand new car, worry-free throughout the duration of the lease, all services included, ZERO down, I can write off a percentage of the lease since I am self-employed and we only have one car, and at the end of the lease we'll probably have to only pay for the disposition fee and new tires (which I will buy on my own, since the dealer charges twice as much) and, hopefully, we won't even need that (since we don't drive that much and I am hoping we keep tire wear to a minimum). More importantly, my wife is happy and loves the car.

But my rational, ER, uber-frugal side of the brain (actually, I would say this is more like 95% of my brain instead of half of it! ) tells me that I am throwing money at the wind, that the car is not "mine", that we own nothing, that the dealer will ALWAYS rape us with BS fees and they will find things that are not there and nitpick every single little mark on the car, etc.

For those that went through similar situations (ie: always paid cash for everything and are now leasing a car for the first time), and since we are on the subject, I would appreciate any feedback, words of encouragement.

[aja8888]

Words of encouragement;

1. Look at it as a long term rental.

2. Your wife is happy.

3. You could have done a lot worse, believe me.

4. Maintenance is prepaid and you have no downside on that.

5. It's nice to have a new car.

6. It's a tax write off.

(need more?)

[Karloff]

Quote:

Originally Posted by aja8888 Words of encouragement; 1. Look at it as a long term rental. 2. Your wife is happy. 3. You could have done a lot worse, believe me. 4. Maintenance is prepaid and you have no downside on that. 5. It's nice to have a new car. 6. It's a tax write off. (need more?)

[JOHNNIE36]

Quote:

Originally Posted by Idnar7 Johnnie36, do you negotiate at all when you lease or just accept what they offer? We have leased three or four times before, but don't remember any negotiating, other than having them waiving the excess mileage penalty.

I have only negotiated the price down from the sticker and got oil changes included for the life of the lease. Also, weekly car washes. To be honest, the negotiating part is kind of new to me. In the past, as a GM retiree, I always leased GM vehicles and the price was a special price to employees and retirees. There was no negotiating on the price.

I think the next time I lease I'll get my finances set up first, such as from a credit union, and then compare it to the dealer lease rate. I'm sure you could do better this way, but the dealers use their own finance arms as do Toyota, Honda, etc. They may be able do you better if you use their financial service arm. I'm not really sure how all that would compare. To me it always had to be a feel good situation with the dealer. I really liked the Toyota dealer and would trust them again. Today there is so much paperwork involved and the numbers are getting so complicated you almost have to be an accountant to figure it all out. Maybe more complicated than purchasing a house.

[travelover]

Quote:

Originally Posted by Karloff ..........The dealer said they were actually losing money on this car. .........

Yea, they lose a little on every sale and make it up on volume.