Time to Buy a New Vehicle

[Karloff]

Quote:

Originally Posted by travelover Yea, they lose a little on every sale and make it up on volume.

Agreed. I figured that was their usual spiel. However, while shopping around, the Mini, with the accessories we chose (panoramic moonroof, etc), and much as I dislike the car (it's for my DW), was actually the cheapest option and had the best fuel economy. I suppose brands like Kia, Hyunday, Honda and Nissan are not concerned with clearing up old inventory, since they were not willing to negotiate the price at all with us. However, I was able to name my own price with Mini.

[travelover]

Quote:

Originally Posted by Karloff Agreed. I figured that was their usual spiel. However, while shopping around, the Mini, with the accessories we chose (panoramic moonroof, etc), and much as I dislike the car (it's for my DW), was actually the cheapest option and had the best fuel economy. I suppose brands like Kia, Hyunday, Honda and Nissan are not concerned with clearing up old inventory, since they were not willing to negotiate the price at all with us. However, I was able to name my own price with Mini.

I'm pullin' your chain, 'cause I'm sure that you got a good deal and made the most of an awkward situation. I always crack up when I hear salesmen tell blatant lies.

[Snidely Whiplash]

Quote:

Originally Posted by Karloff 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.

I read the car thread you posted and was impressed with your evaluation of the financial transaction. I think you made a good decision. Given that, if I were you I wouldn't keep looking for a reason to be unhappy with the transaction now that its complete.

FWIW, I leased my current vehicle after being dead-set against leasing all of my life. What convinced me was that I bought new (domestic brands) and generally kept a vehicle for about five years, at which point I would start to experience reliability / repair issues. I get seriously stressed over unreliable vehicles so the best financial decision had to be weighed against the reliability issue.

The last vehicle I bought cost me $6,000. per year for the five years I owned it, which included purchase price, maintenance and repairs, and minus the money received when I disposed of it to obtain the current vehicle.

The current vehicle I leased is exactly the same price of the previously described vehicle. The lease includes all maintenance / full warranty for the 3 year period (longer, actually) and my payments equal the same $6,000. per year. I felt like if I'm paying $6,000. for a vehicle per year anyway, I might as well do it with a minimal amount of hassle. The residual, if I decide to keep the car, is such that it would cost me the same $6,000. per year if I were to buy it and move on to another vehicle at the end of 5 years. I'm thinking that for the same $6,000. per year I'll probably be leasing again.

I viewed the lease as having the added benefit of allowing me to use the vehicle for the same cost as buying for 3 years and making sure its not a lemon. Kind of a free vehicle "put" if you will. And another benefit was that I didn't have to put up the full cost up front, leaving the "purchase price" invested allows dividends to make a handful of lease payments for me, making my yearly cost slightly lower.

I know the experts say leasing is a losing proposition, but in my case it's cost was a wash and it avoided some reliability headaches for me. I'm happy with my decision.

[FinanceDude]

Quote:

Originally Posted by travelover Yea, they lose a little on every sale and make it up on volume.

Like they always say: "There's a butt for every seat"..........

Now you are: "Bustin' bugs and burnin' gas"........

Most important: "Happy Wife, Happy Life"..........

[daylatedollarshort]

We bought a car this year through a Penfed / True Car link, with 0.99% financing and a "great" car price, at least according to the True Car graphs.

[aja8888]

Quote:

Originally Posted by daylatedollarshort We bought a car this year through a Penfed / True Car link, with 0.99% financing and a "great" car price, at least according to the True Car graphs.

One thing to remember is that True Car is compensated and sponsored by the auto industry. So any pricing you get from them (or a car buying service) is not necessarily the best (lowest) pricing achievable. But as long as you are satisfied, great!

Generally, the "so called" invoice price is a good starting point when negotiating with a car dealer, but for those who don't want to hassle, the other process is the car buying service.

[Karloff]

Quote:

Originally Posted by Snidely Whiplash I read the car thread you posted and was impressed with your evaluation of the financial transaction. I think you made a good decision. Given that, if I were you I wouldn't keep looking for a reason to be unhappy with the transaction now that its complete. FWIW, I leased my current vehicle after being dead-set against leasing all of my life. What convinced me was that I bought new (domestic brands) and generally kept a vehicle for about five years, at which point I would start to experience reliability / repair issues. I get seriously stressed over unreliable vehicles so the best financial decision had to be weighed against the reliability issue. The last vehicle I bought cost me $6,000. per year for the five years I owned it, which included purchase price, maintenance and repairs, and minus the money received when I disposed of it to obtain the current vehicle. The current vehicle I leased is exactly the same price of the previously described vehicle. The lease includes all maintenance / full warranty for the 3 year period (longer, actually) and my payments equal the same $6,000. per year. I felt like if I'm paying $6,000. for a vehicle per year anyway, I might as well do it with a minimal amount of hassle. The residual, if I decide to keep the car, is such that it would cost me the same $6,000. per year if I were to buy it and move on to another vehicle at the end of 5 years. I'm thinking that for the same $6,000. per year I'll probably be leasing again. I viewed the lease as having the added benefit of allowing me to use the vehicle for the same cost as buying for 3 years and making sure its not a lemon. Kind of a free vehicle "put" if you will. And another benefit was that I didn't have to put up the full cost up front, leaving the "purchase price" invested allows dividends to make a handful of lease payments for me, making my yearly cost slightly lower. I know the experts say leasing is a losing proposition, but in my case it's cost was a wash and it avoided some reliability headaches for me. I'm happy with my decision.

Thank you, Snidely. You message made feel better, actually, and we seem to be on the same page in regards to leasing. Like you, I never even contemplated it as an option, and was in fact quite opposed to it. But the numbers and, more importantly, the peace of mind, made sense in this particular case. I never owned a new car in my life before this one, and it's nice to not have to worry about any repairs nor services whatsoever. Since I am self-employed, the tax deduction comes in handy as well, and, if calculations are correct, basically take care of the equivalent of +/- 8 months worth of lease payments throughout the 36-month period. Maybe even more. You also mention that your current vehicle costs about $6K /year, so I do feel confident that we got a good deal in our case (for the type of car leased) since ours would be $3756/year, not counting insurance, of course. Other options, such as Kia Soul, Ford Focus or some Honda models were considerably more expensive, up to $3K more, and my wife wouldn't have been truly happy in none of those cars, so, all in all, I do feel better about the decision, at least for the next 3 years.

Thanks again for your comments.

[daylatedollarshort]

Quote:

Originally Posted by aja8888 One thing to remember is that True Car is compensated and sponsored by the auto industry. So any pricing you get from them (or a car buying service) is not necessarily the best (lowest) pricing achievable. But as long as you are satisfied, great! Generally, the "so called" invoice price is a good starting point when negotiating with a car dealer, but for those who don't want to hassle, the other process is the car buying service.

True Car's cut does take out a lot of room for negotiation.

In this case we bought a used car so there wasn't an invoice. I used the local CarMax price on a similar make model, mileage and styling package for comparison purposes. The CarMax price and 1.99% financing were my baseline, like white bread is the baseline for the glycemic index.

Then we used the True car graphs and the comparison to CarMax for our decision. We looked at total cost to us between various cars after factoring in options, financing costs, warranty, Carfax data, etc.

We bought a car that had a total cost to us lower than the Carmax price by about ~$1K, after factoring in the car condition, clean Carfax report, the PenFed special financing and a one year warranty not included on the CarMax car. We didn't think we would get a much better deal than that, especially after factoring in our time and mileage, driving around from dealer to dealer.

[aja8888]

Quote:

Originally Posted by daylatedollarshort True Car's cut does take out a lot of room for negotiation. In this case we bought a used car so there wasn't an invoice. I used the local CarMax price on a similar make model, mileage and styling package for comparison purposes. The CarMax price and 1.99% financing were my baseline, like white bread is the baseline for the glycemic index. Then we used the True car graphs and the comparison to CarMax for our decision. We looked at total cost to us between various cars after factoring in options, financing costs, warranty, Carfax data, etc. We bought a car that had a total cost to us lower than the Carmax price by about ~$1K, after factoring in the car condition, clean Carfax report, the PenFed special financing and a one year warranty not included on the CarMax car. We didn't think we would get a much better deal than that, especially after factoring in our time and mileage, driving around from dealer to dealer.

Oh, didn't know you bought a used car. Makes a big difference. I wasn't aware PenFed financed used cars with that 0.99% rate or the buying service worked for used cars. Sounds like you did well.