Poll:Vehicle habits

[iloveyoga]

Buy new with cash, keep for 7-8 years. I am due this year, but I really like my 2015 car. Runs great, never had any trouble with it. AWD, which is a must here in Iowa.

[Jerry1]

Not sure what I’m going to do going forward. When working, I leased a new car every 2 years. For DW, we would buy new and drive it for awhile but not into the ground. Now she has a 3 year old suv with 22K mikes on it. We drive so little that it’s hard telling how long we’ll keep it. My guess is about 10 more years, at which time it should still have less than 100K miles on it. DW will be 75 in 10 years and since she doesn’t like to drive now, it may just end up being the time we go to one vehicle. Not sure.

My vehicle is a truck. Bought new, it has 2 years and just under 20K on it. My plan was to keep it until the warranty runs out. We got an extended warranty for 6 years/100K miles. Unless we start traveling (driving) more, the warranty will expire due to time and not mileage. I didn’t think I would drive so little (thought I’d hit 100K before 6 years) so my plan was to sell it while still under warranty (just barely) and get a new vehicle - rinse and repeat. However, if the truck is running well in 4 years and I still want to drive a truck, I’ll probably keep it and take the risk of being out of warranty. My guess is that I’ll probably get a new vehicle in 5 years or so. I’m thinking that having a truck will be unnecessary (if it ever was ) and I’ll move on to something else. Likely a nice suv like a Lexus and I’ll probably take a serious look at an EV.

As for paying cash or financing, that depends on the particulars at that time. I have no concerns about financing a vehicle if interest rates are a bargain. I can’t imagine not financing a vehicle if they run zero interest financing. Anything more than that and I’d have to do some analysis. I generally don’t like debt, but if money is on sale, I’ll certainly consider it. The other thing about financing is that it helps me manage my taxes. A lot of my worth is in retirement funds and my budget keeps me in the current 12% bracket, maxing it out with ROTH conversions. If paying cash for a vehicle pushes me into the next bracket, that would obviously impact my decision on financing.

[Dtail]

Used to lease cars years ago, but our current cars were bought new and the plan is to drive them as long as possible.

[BuysToys]

I recently bought a new vehicle. The car that was replaced was 10 years old. I could have driven it another 10 years easily. But it was time for new. Things were starting to go wrong with it and I only drive a few thousand miles a year.


I financed the whole thing even though I could have paid cash. The interest rate is low and I'll likely earn more by leaving the funds invested than I'll pay in interest.

[racy]

In the accumulation phase we bought used with cash.
In our decumulation phase we buy new every few years with cash.

[bobandsherry]

Quote:

Originally Posted by Sunset I'm impressed, and if you would ever want to share how you do this, I'd be happy to learn. I will spend close to your $36,000 (10 yr period) on my van which is now 6 yrs old. Paid $31,744 including tax for the van. Oil changes for 4 yrs have been $400 Engine and cabin filters I changed: 40 Expecting new tires will be $700 Patched 2 tires for $50 Total so far is: $32,934 I have 1 more year warranty on the van. Future oil changes: $400 Future Engine and cabin filters I change: 40 So known cost is $33,374 for 10 yrs. However, my van even now is not $46K MSRP , so you are driving a nicer vehicle.

Hi Sunset. Thanks for sharing your cost experience.

As for sharing how I get a good lease deal, I used the forum at Leasehackr.com to learn and become educated. https://forum.leasehackr.com/

No real secret other than you only focus on the payment. Different mentality than usual car buying where you worry about the cost, fees and rate if financing. For lease I don't care how the dealer arrives at the payment, he may have some special credits to use that helps him make his number.

Another is being flexible. As example, for my current car I was asking for a specific color. Just couldn't get the payment where I wanted. But dealer said he had a different color, same equipment, that he could do better, actually came in slightly under my target. Turns out he had some special incentives to move that car and we both won. The color is still very nice, Iced Mocha.

Also, if you have your mind set on one particular car you may not find great lease deal. If you only want a Honda Accord and won't consider anything else then will limit your options.

Cars with manufacture incentives work better as you get that incentive applied to lower the cost of the car. Also look for vehicles with some special incentives. One is a Conquest incentive where they offer you some additional money if you own a competing brand. $1k off on a new car purchase is nice, but over many years it's not much per year. But on a lease that's $1k/36 or $27 lower lease payment.

Then once I agree to a deal I say we are real close, but can you include maintenance on the car for the three years. On my current car I also asked for them to tint my front driver/passenger windows too. They agreed. Their cost is a fraction of what you and I would pay for those services.

Rule of thumb to start on a great deal, as I learned from the site I shared above is monthly payment of 1% or less of MSRP. I use that as my deal barometer. [emoji2]

[HarveyS]

Quote:

Originally Posted by bobandsherry If you don't mind sharing, what's your all in cost for 5 year period for owning your car; loan payments, maintenance and repairs, less what you reasonably think your equity is today? How much you expect you'll spend on repairs and maintenance for the next 2 years when you enjoy the freedom of no payments?

I don't have a 5 year period, and the data below include the actual "sold for" price, not an estimate of value.

2006 Infiniti sedan, bought in 2009 for cash, sold in 2016 for cash. Put about 110k miles on it. Cost was $223/month (cost excludes fuel, registration, insurance)

2007 Highlander, bought in 2009 for cash, sold in 2020 for cash. Put about 135k miles on it. Cost was $173/month (cost exclude fuel, registration, insurance)

I don't have the data on my earlier cars.

[donheff]

Over the years I have bought new and kept the cars for 8-9 years. The choice of finance vs cash depended on the finance rates available. In 2018, adhering to the blow that dough theme raised here, I decided to start going with new cars more frequently. The idea was to have the latest tech, no repairs, loads of comfort. I decided I would try a lease for the first time - but I'm not really happy with it. I got a Lexus SUV which I like to drive but hate the track pad and navigation system. I'm due to return it in March but the new model has the same problems. I would like to return it to a Toyota dealership and get a new RAV4 Prime, plug-in hybrid but those are impossible to get.

I have decided to just pay it off and wait a couple of years to see what becomes available. I only have 14,000 miles on it and the pay off cost is less that buying an equivalent used car on the open market. In the future I will likely go back to purchasing.

[Teacher Terry]

I have done 1 and 6. We drive our cars until they cost to much to repair. I have a 2008 Toyota Corolla with 60k miles on it. Unless it gets totaled in a accident I don’t expect to need another car. My friend is still driving her 30 year old car with 110K miles.

[bobandsherry]

Quote:

Originally Posted by SecondCor521 1997 Lexus GS300, sticker price $41,963. Last 5 years all in costs $14,270.13. Quicken report attached. (Miscellaneous category is basically registration and emissions tests plus one speeding ticket.) If you leave out fuel costs, which I think you might, the total drops to $9,219.44, or $153.66 per month. I carry the vehicle in Quicken at $2,500 and don't really think it's depreciating or appreciating at this point. Zero loan payments, obviously. It *is* old, I'll grant you. But it has everything I need (reliable, good MPG, cruise control, A/C, sound system, airbags, power everything) and a few things I like (heated seats, leather and wood interior). And anyway, I think a lot of the newer fancier things are more likely to break down in expensive ways. I had a friend with a newer Jeep Grand Cherokee that he had to leave at the shop for several weeks because the DTE calculator broke, he wanted it fixed, and the DTE was integrated with the odometer so they had to keep it in the shop and replace the entire CPU for like $700.

You like to squeeze value out of your car, congrats! You didn't mention, but I'm going to guess you've owned that since new? And agree, you have to leave out fuel costs, but the new EV's may make that a requirement for comparison in the future.

Don't take it personally, but I don't think I'd enjoy driving that car. As I said originally, my wants are a newer car with latest technology and safety features. Nothing like getting in, plugging my phone into the USB on the car, getting Waze to pop-up on the big screen and then enjoying streaming music. But that's just my quirk, I love technology Also, with that being 24 years old and I'd always in the back of my mind be thinking what's getting ready to go out on the car -- and it seems those type of problems are never at convenient times. I guess I'll justify the incremental $165/mo I spend as cost of piece of mind and entertainment

Just to balance out your experience with new cars. My experience has been quite the opposite. With exception of some cars back in the 80's, I've had very few mechanical problems with cars. Thinking back, the last time any of my cars needed to go into the shop (other than for regular maintenance) was back in 2008. It was thought to be bad battery, turned out to be bad alternator, less than 1 year old so covered under warranty. Knock on wood, all cars since then haven't needed to go into the shop for repairs. I even had a couple hard top convertibles, or rather my wife drove them, and those are known to be problematic but never had a problem with either. Further, I look at the experience of my son and daughter and parents. Their newer cars haven't needed to go into the shop either. So even with all the technology I want, I'm still having a positive and reliable experience.

[The Cosmic Avenger]

Historically, #2...but last time we were ready to pay cash, and then were offered 0% financing. And this was 2017, before interest rates hit their current low! So we took the free money.

But you left off our next most common method: "inheriting" used cars from friends and family who traded up! Decades ago, we were given two vehicles by my in-laws when they replaced theirs, and I bought a couple from close friends for way below what they could have gotten in a private sale.

[bobandsherry]

Quote:

Originally Posted by HarveyS I don't have a 5 year period, and the data below include the actual "sold for" price, not an estimate of value. 2006 Infiniti sedan, bought in 2009 for cash, sold in 2016 for cash. Put about 110k miles on it. Cost was $223/month (cost excludes fuel, registration, insurance) 2007 Highlander, bought in 2009 for cash, sold in 2020 for cash. Put about 135k miles on it. Cost was $173/month (cost exclude fuel, registration, insurance) I don't have the data on my earlier cars.

Interesting perspective, seems then that you had very few (if any?) mechanical problems with cars, especially with higher mileage. So that explains why I get many calls a week about selling me an extended warranty (seriously, it's frustrating how many calls I get). They know how reliable cars are today and see how profitable it can be selling those. Thanks for sharing.

[Mr._Graybeard]

The last new car DW and/or I bought was in 1985. However, the arrival of direct-injection turbocharged vehicles has me considering purchasing new because of the maintenance these engines seem to require. I'd be leery of buying a used one, and would cut the dealer-recommended oil change interval in half.

[ivinsfan]

Quote:

Originally Posted by bobandsherry You like to squeeze value out of your car, congrats! You didn't mention, but I'm going to guess you've owned that since new? And agree, you have to leave out fuel costs, but the new EV's may make that a requirement for comparison in the future. Don't take it personally, but I don't think I'd enjoy driving that car. As I said originally, my wants are a newer car with latest technology and safety features. Nothing like getting in, plugging my phone into the USB on the car, getting Waze to pop-up on the big screen and then enjoying streaming music. But that's just my quirk, I love technology Also, with that being 24 years old and I'd always in the back of my mind be thinking what's getting ready to go out on the car -- and it seems those type of problems are never at convenient times. I guess I'll justify the incremental $165/mo I spend as cost of piece of mind and entertainment Just to balance out your experience with new cars. My experience has been quite the opposite. With exception of some cars back in the 80's, I've had very few mechanical problems with cars. Thinking back, the last time any of my cars needed to go into the shop (other than for regular maintenance) was back in 2008. It was thought to be bad battery, turned out to be bad alternator, less than 1 year old so covered under warranty. Knock on wood, all cars since then haven't needed to go into the shop for repairs. I even had a couple hard top convertibles, or rather my wife drove them, and those are known to be problematic but never had a problem with either. Further, I look at the experience of my son and daughter and parents. Their newer cars haven't needed to go into the shop either. So even with all the technology I want, I'm still having a positive and reliable experience.

You just gave a little bit of a con here against your leasing is cheaper then buying comment...but my question is about sales tax. Are you adding sales tax to your monthly cost of operating your vehicle? Second question plate fee when you lease and swap every three years the cost of your plates never goes down, ever.

As far as repairs all major non wear repairs on a new car are usually covered for at least three years. Actually the last new car we bought had a dealers life time power train warranty added for 79.99..

[HarveyS]

Quote:

Originally Posted by bobandsherry Interesting perspective, seems then that you had very few (if any?) mechanical problems with cars, especially with higher mileage.

Correct. One issue with Infiiniti cam follower sensor. Balance of costs were maintenance. Tires, batteries, changed plugs at 100k miles (expensive as exhaust manifold needed to come off to access some of the plugs), timing belt/water pump on highlander, brakes several times on each car, filters, oil changes, wipers. Nothing serious.

I have never considered leasing -- until today. Your experience suggests I could have been driving new cars for about $1200/year more (plus, perhaps, higher insurance). Maybe it's time to blow the dough and upgrade myself! Thanks for sharing your experience.

[ivinsfan]

Those of you using 0 interest financing are you leaving money on the table in the form of cashback or rebates?

Last new car we got an extra 750 to finance at 2% or something and paid the car off after one payment.

This time we got offered zero % but would need to forgo the cashback bonus on the car. paid cash.

[pb4uski]

Quote:

Originally Posted by bobandsherry I don't look at it as continued payments. Those who pay cash just prepay their payments. Lol. I look at total cost per year. Then compare with how much I'd spend over a 10 year period depending on maintenance, repairs, etc. For me, I enjoy a newer car every 3 years for either new safety or tech, plus maybe just get tired of looking at same car for too long. Just the way I roll. As I said, I consider the cost over 10 years, that seems to be what the "frugal" find their sweet spot to buy and hold. I use my own estimates as every time I ask those who claim to be frugal how much they spend over 10 years, including the cost of vehicle less the value after 10 years, plus any repairs and maintenance they've put into the car, I never get anyone to share that. So I estimate the expense for new tires, batteries, oil changes, wiper blades as well as something going wrong within a 10 year period like an alternator. For me, my cost over past 5 years has been just under $20k. For 7 years my cost will be about $27k. Cars I drive are between $40-50k. My current car had $46k MSRP, my lease payment is $300/mo. That's no money down which is only way anyone should lease a car. I don't pay for maintenance as dealer covers the scheduled maintenance. I'm always under warranty, so any repairs are covered. I also get a free loaner when car is due for maintenance or warranty work, they bring the car to me. I don't drive massive miles, 12k/yr is sufficient for my driving needs, more so for past year due to Covid. So my out of pocket costs truly is just my payment, I'm ok with $3,600/yr (18 more months). Plus a new car with new tech and safety. If you don't mind sharing, what's your all in cost for 5 year period for owning your car; loan payments, maintenance and repairs, less what you reasonably think your equity is today? How much you expect you'll spend on repairs and maintenance for the next 2 years when you enjoy the freedom of no payments?

Monthly payments were $529.60 for 60 months or $31,776. Car has been trouble free... maintenance has been mainly oil changes, tire rotations, engine and cabin air filter replacements and two sets of tires.... ~$2,152 per my Quicken records. Current equity is $15,390 trade-in and $18,750 retail... $17,070 average. Net cost was $16,858 or $281/month.

For next two years, let's assume 2 oil change/tire rotations a year ($85/each or $340), $50 for engine and cabin air filters (I buy on Amazon and install myself), and $1,000 for other stuff... that's ~$1,500. A 2-year older car with 25k more miles would have a trade-in value of $10,650 and a retail value of $13,950... $12,300 average.

So for 7 years my net cost will be $31,776 for the car payments plus $3,652 for maintenance and repairs less equity of $12,300.... a net cost of $23,128... divided by 7 years is $275/month. OTOH, if the $1,000 for other stuff doesn't happen then $263/month.

I will say that your claim of a lease payment of $300/month for car with a $46k MSRP with no money upfront is way, way better than any lease deal that I have ever seen... which makes me wonder if it is a special situation of some sort. If I could find a lease of a similar vehicle... or even a new version of my current ride that has a $35k MSRP for $300/month with no money down then I would seriously consider leasing.

[ivinsfan]

Quote:

Originally Posted by HarveyS Correct. One issue with Infiiniti cam follower sensor. Balance of costs were maintenance. Tires, batteries, changed plugs at 100k miles (expensive as exhaust manifold needed to come off to access some of the plugs), timing belt/water pump on highlander, brakes several times on each car, filters, oil changes, wipers. Nothing serious. I have never considered leasing -- until today. Your experience suggests I could have been driving new cars for about $1200/year more (plus, perhaps, higher insurance). Maybe it's time to blow the dough and upgrade myself! Thanks for sharing your experience.

What's your mileage yearly? If you drive more then the lease amount you will be penalized ,if you drive then the lease amount your cost per mile is higher... and be aware of add ons to your lease. Also B and S doesn't mention if they buy extra gap insurance when driving a leased car..if you total it you could end up owing money to the dealer. That's my understanding since I have never leased.. also be aware that any random damage to the car can be charged against you at the end of lease.

[bobandsherry]

Quote:

Originally Posted by ivinsfan Also B and S doesn't mention if they buy extra gap insurance when driving a leased car..if you total it you could end up owing money to the dealer. That's my understanding since I have never leased.. also be aware that any random damage to the car can be charged against you at the end of lease.

Every lease I've ever had has included gap insurance as part of the standard lease. That's with Nissan/Infiniti, Kia, GM and Ford/Lincoln. Additionally, that's why you should NEVER put money down on a lease. If car is totalled you lose whatever you have paid including any capital reduction you may have put down.

As for charges for "random damage, each lease I've had, multiple manufactures, has included them scheduling someone to look over the car a month or so before expiration date. They are very upfront as to if there are any items that need to be addressed prior to turn in. But routine dings and chips, considered normal wear and tear, and not a charge. In my experience, again multiple manufactures, I've never had any repairs noted as needing to be done. Additionally, I've never had any extra charges for damage when car was turned in.

[MrsHaloFIRE]

I didnt vote because it varies. Always cash, but we wouldnt turn down a 0pct. I wanted to add that in talking to folks, alot CLAIM they only buy new and drive them into the ground, but their ground and my ground must be different grounds because this tends to happen about every 5 years "but Im going to keep it forever" yeah uhuh