Poll:Vehicle habits

[OldShooter]

I checked #5 but as we have become old and prosperous our "used" vehicles have typically been one model year old. My WRX was new, unsold, and discounted to reflect more than the typical first-year depreciation. DW's Mini Countryman was a factory rep car, one model year old with like 10K miles, sold as Certified Used but never before sold at retail. My truck, Nissan Frontier was bought this way in 2007 and now has about 120K miles. Rust will become obnoxious in a year or two and it will be sold.

There is a reason the F&I guy tries hard to sell leases.

 

[racy]

Who knew "how do you buy a car?" was such a hot topic!

 

[ArmchairMillionaire23]

What is your usual vehicle buying habit?

(5) PAY CASH for only USED vehicles because I want someone else to take the big depreciation.

In my early years I bought numerous $100 - $500 beaters and limped them along until they died.
In 1991 I bought a '67 pickup and kept it until '99 when the frame rusted and broke. (300,000+ miles)
In 1999 I bought a '95 pickup and kept it until the end of 2015 when the body got so rusted that the door kept flying open every time I made a right turn. (225,000 + miles)
At the end of 2015 I bought a 2010 pickup that I plan on keeping for the next ten years or so until it gets too rusty to drive anymore.
I financed the wife's last car (a 2015 program car that we bought in 2016) for 1.99% but got fed up with B.O.A. about titling the vehicle in the wife's name and ended up paying it off in less than a year. We'll keep that one for 15+ years if all goes well.

 

[bobandsherry]

So to my thinking $300/month for 36 months with $2,500 down is really $369/month. The offer that you quoted seems consistent with the lease payment on a $27k car with $2,500 down according to the TrueCar Car Lease Calculator (see screenshot below).

If I put $46k MSRP and $0 down into that calculator I get $661/month so B&S is either a really good negotiator or BS ... just kidding... I do believe him but suspect his may be some special situation of some sort.

I have no idea how you can figure out a lease payment without knowing the actual details. Calculating a lease payment is not just plug in MSRP, a money factor and done. You are leaving out the most important details, the reduction to capitalized cost, also known as dealer discount and incentives (manufacturer rebates and discounts, special program discounts and dealer discounts). Think of it this way, every $1k in incentives is $27 savings on the payment. $8k in incentives is $220 reduction to the payment.

You also have to know the residual value, that is definitely not a one size fits all and will vary by manufacturer, model and even the type of package. The residual is basically fixed so every dollar discount off of MSRP through capitalized cost reduction is a benefit directly to your payment. And further, manufacturer may sweeten the residual on cars they want to move. The higher the residual the lower your payment. I can say that I feel the residual is higher than I would expect to get for the vehicle at the end of the lease, but I don't care, that's not my risk.

And the dealer may have tax credits they can apply to lower your payment. It's money they either use or lose.

So all that said, that's why I say the only thing I do when leasing is negotiable the payment. I don't care how the dealer structures the deal, they can pull whatever strings they have available.

So anything you just plug into a lease calculator without knowing what incentives there may be is basically the lease payment on full retail price. I'd bet that's what some people pay, but that's just silly as paying retail for a new or used car.

And lastly, money factor is a great unknown. For my last deal the money factor was almost zero. The total "rent" charge, which is basically the finance cost on a traditional loan totalled $15 for 3 years. I guess essentially same as 0% offers if financing.

I don't know if you consider last year of the model to be special situation, but that may have been why vehicle was being discounted to clear inventory. Dunno and honestly don't care, I focus only on payment.

I mentioned this forum earlier, but will share again as information there is invaluable. It's great education on finer points of leasing. You'll also see deals shared by others.

https://forum.leasehackr.com/c/deals-and-tips/6

Anyway, I guess this is now way off topic to the OPs original post, so I'll just let this be my wrap up and let others get back to answering the OPs question.

 

[Dtail]

We just traded off a car we thought we'd be driving for at least another 3 years. My DH wanted some of the new tech/safety improvements. So I am interested in leasing costs..after a few years in this car, we might consider leasing as we continue to age.

Yeah, the new tech/safety improvements are on my mind too.
DGF totaled the Honda, which we would have kept for many more years, but now have a 2019 Mazda and just love the backup camera and side vision warning system. A big deal to me with most parking around here being non parallel.

 

[P.S.]

(5)
My teenager would like me to get a Tesla or Polestar, but after 18y, car still works great... apart from the headliner coming down.

 

[RunningBum]

I've done 1-6. Currently about to 8 years with a Subaru Forester that I bought new, and 22 years with a Miata that I bought used. If I had a reason to replace the Forester, I'd do it, but I still like it just fine so why bother?

The Miata, I find I'm driving less and less, and I could get rid of it anytime but I think prices are going up on the 1st gen Miatas. So if a buyer offered a good price I'd sell it today, but I'm not sure what a good price is. kbb.com says around $2000. The couple I find on cars.com with very similar mileage around around $8K. From dealers, but that's still quite a difference. I doubt I'd replace it, but I saw a Miata RF the other day and it REALLY caught my eye.

 

[tdv2]

I checked #5 but also will do #1 on occasion especially for DW who likes to keep her cars forever it seems.

 

[rk911]

#1, absolutely! we've kept our new cars about 15-years and taking turns buying a new one every 7 or 8 years. we currently have an '03 Wrangler and a '10 Liberty. we're holding off replacimg the Wrangler since our next purchase will likely be our last new car and at some point our only car.

 

[troutnut1]

In the book “Millionaire Next Door” by Thomas Stanley there is a very interesting discussion about this subject. I resemble the person described in the book who buys a vehicle by the pound. And second hand. And domestic. While I have secreted a 1998 BMW Z3 Roadster in storage, cars like that are not status symbols in Montana. A good example of a highly coveted vehicle here is the 1997 Ford F-250 PSD diesel I found last year with 37,000 miles on it. It was/is like new. And the price per pound was too good to pass up. My last new car? A 1978 Cadillac CDV in 1978. $12,500 with a 10% tax credit.

 

[Gumby]

I have a 2001 Z-3 Roadster. It's not for status. It's just fun to drive the back roads with the top down on a sunny day.

 

[troutnut1]

I have a 2001 Z-3 Roadster. It's not for status. It's just fun to drive the back roads with the top down on a sunny day.

I agree! But I do it in disguise here in rural Montana lest my neighbors and friends rib me endlessly. It is a handsome car, and many of them think its some kind of status symbol while I do not.

 

[Ronstar]

We have a 2012 Acura, 2001 corvette and 2017 F-150. I financed all 3, but paid off the corvette and f-150 a couple months after I bought them.

I don’t drive now as much as I did in my working days, so I’m going to sell the corvette. And get a Bronco.

 

[Sunset]

What's your DW driving that's lasted so long? Or maybe she's just a really low-mileage gal.

She drives a Toyota camry and yes she is low mileage with 105K miles on it.

My Uncle has a 20 yr old camry and it is in perfect shape.

One important thing I've learned is to park the car in a garage every night. Over the years, rain, sun, snow, etc damage a car paint job and fade out the interior (or rot it).

 

[F.I.R.E User]

5. Pre cert used.

 

[Badger]

I have purchased 22 cars in my life as best as I can recall. There were 15 bought used and 7 new at various times over the years. All but 2 cars were driven for many years and at least over 1.5k miles. Since retirement 10 years ago 4 of the new cars were bought with 2 of them driven 9 years. The most recent bought a little over a year ago should last until I am 80 or until there are reliable self driving cars available.


Cheers!

 

[CSdot]

I wonder if the reason a majority of us drive them until they have little or no resale value is because our personality is such that we do not want to place ourselves in a situation where we could be taken financial advantage of by a car dealer trying to screw us on the trade in?

If we drive the vehicle until it has little value to us, we control the game and avoid putting ourselves in financial harm’s way.

I wonder if our home owning habits are similar? Move every few years, or stay forever in one house (once you get to the correct size for your family)?

 

[Aerides]

I wonder if the reason a majority of us drive them until they have little or no resale value is because our personality is such that we do not want to place ourselves in a situation where we could be taken financial advantage of by a car dealer trying to screw us on the trade in?

If we drive the vehicle until it has little value to us, we control the game and avoid putting ourselves in financial harm’s way.

I wonder if our home owning habits are similar? Move every few years, or stay forever in one house (once you get to the correct size for your family)?

I don't think so. I doubt many of us would consider ourselves overly susceptible to dealer antics. Probably less so that the general population. Trade in value is negligible on most any car after 10 years. There's little left to haggle on once the car is only worth $5k. And carmax leveled that playing field years ago.

I think the reason most of us drive em till they are dead is more simple: Get ever last mile out of every dollar spent.

 

[athena53]

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.

I find buying based on payment scary. That's how many people end up with crazy-long term loans. For leases, they build in provisions for how many miles you can drive and estimates of the residual value of the car that can leave you with a big bill when you turn it in.

DH and I bought our last 3 cars off-rental and financed with a HELOC. Gave the first to DS, I sold the second privately after DH died and the third one, a 2012, died when I was visiting DS and DDIL 3 hours away. (Transmission issues that would cost $3,000+ to fix, Habitat for Humanity later sold it for $1,600.)

My car-buying habits turned on a dime. I didn't want any BS over financing or trade-in values. I didn't want to take the time to have a mechanic check out a possible used vehicle. I got on a web site for a nearby dealer for my preferred brand, told them what specific car I wanted and we agreed on a cash price. Moved the $$ from brokerage account to checking account. I drove the new car home 2 days later.

I had to write a check to my home state when I registered it Ouch. That's a tax I'm happy to avoid by driving cars into the ground.

I'm almost 68 so maybe not many more decisions like this left but I may lean towards new vehicles in the future.

 

[Gumby]

Here in CT, we not only pay the 6.35% sales tax upon purchase, but also pay taxes annually on our cars at the same rate as our real property tax. For my town, that is 2.8% of the value of our cars every year. They use the NADA book values, so the tax goes down over time as the car ages. Yet another reason to avoid buying new cars too often.

 

[scrabbler1]

Hard for me to decide on how to answer because each of the 3 cars I bought fall into different categories.

The first car I bought back in 1986 was new and paid cash. I kept it for nearly 6 years before trading it in. It still had some value, as I hadn't driven it into the ground. Answer (3).

The second car I bought, trading in the first car, I paid cash for the difference. It was a slightly used car, a former rental with relatively low mileage. Its price was significantly lower than a new car of its type because of the big first-year depreciation, of course. Answer (5) but a little bit like Answer (1). I drove this car into the ground, owning it for 15 years, so its trade-in value was nearly zilch which was fine.

The third car I bought, trading in the second car, was new and I paid cash. Like the second car, I have owned it for a long time, now 14 years. I do plan to drive it into the ground. Answer (1).

I expect my next car to be like my current car, so another (1) lies in my future.

So, I chose (1) to the poll but it was hardly a slam-dunk.

 

[someguy]

Like BobandSherry, I've been following LeaseHackr and am considering a lease for the first time ever. He/she does a good job of outlining the differences and the biggest is that instead of going in thinking "I want a Subaru Whatever in trim XYZ and has to be red with grey interior" you go in thinking "I want the best car/deal I can get for around $xxx/mo" where xxx/mo is your typical effective monthly cost when buying and holding. Certain brands will generally be unworkable in the "lease hacking" – Tesla, Toyota and usually Honda, to name a few. I've run a number of detailed analyses and concluded:

1) on a pure cost per year basis, the best lease deals are similar to the best buy-and-hold scenarios up to roughly 10 years; after that BaH pulls ahead by having low or no depreciation costs and low repair costs (requires a very reliable vehicle, eg Toyota)
2) on a value basis, the best lease deals exceed the best BaH deals by being similar in cost (1) but allowing you to drive a) a vehicle at least one "notch" up and b) always "new" and with latest safety versus a new BaH (subject to the 10 years above)
3) on a pure cost per year basis, slightly used (2-3 yr) BaH typically doesn't give much or anything over new BaH. The used market is hot and resale values strong, especially among the reliable brands that are best for BaH.

Here's a sample (now past expiration but still gives an idea):

2020 Nissan Leaf S
MSRP: $34XXX
Due at signing: $1000
Term: 24 month/10k annual miles
Payment: $99 plus tax
Residual: 55%

That's an effective $142/mo plus tax for a mid $30K's electric vehicle and on the hook only two years. During that time, I would expect to spend $0 on maintenance (ok, maybe $40 for a couple rounds of wiper blades) and know I would spend $0 on repairs. I didn't cherry pick this or analyze for being the best deal; it was simply one of the first I saw.

I've noticed a lot of these deals have residual values that seem high, which of course lowers your lease cost. I don't know how the lessor is managing eating that, but as BandS pointed out, as the lessee who cares.

 

[bjorn2bwild]

I have purchased three vehicles in the past 30 years in this order -
1) 1990 - a 1988 F-150 @ $7,200/32k miles. I still drive it as my main vehicle with ~150k miles and good mechanical condition for it's age.
2) 1995 - 1991 Ford Escort wagon @ $6,000/28k miles. In 2013, sold it back to California for $1,000 with ~160k miles. They crushed it into a cube.
3) 2013 - 2003 CRV EX @ $6,000/172k miles. Going strong as DW's daily driver with ~205k miles.
I expect this pattern to change in the next few years.

 

[Splash]

Buy new vehicles with cash and keep until not reliable or requires costly repairs.

 

[MrsHaloFIRE]

Buy new vehicles with cash and keep until not reliable or requires costly repairs.

How do you offload the car that requires costly repairs without making them though? You cant really sell it without a transmission, etc.. right?? SO you fix it to be able to sell it but at that point it drives fine. We get into this spiral at my housel