Thoughts on buy or lease new car, Technology changing fast

[Zipper]

We have a 2003 Impala that was a daily rental. It had ~30 000 kms and the rest of the warranty (50 000 kms) when we got it in March of 2004.

It was nicely appointed with many upgrades and free oil changes for 2 years for many $1000's less than new.

It has 80 000 kms.+ now and we couldn't be happier.

We would never buy new in the future.

 

[Nords]

Hey FD, did you take look at some of the net worth's on the board for this year. Many of these folks can afford to lease.

We didn't get to ER by leasing.

Haven't bought new since 1981, either...

 

[Nords]

I can watch DVD movies in it also when the car is parked!

Is that actually a hardwired transmission interlock or just a safe idea?

 

[Cut-Throat]

Is that actually a hardwired transmission interlock or just a safe idea?

It's actually hardwired. You have to have the parking brake engaged. Although, there are some guys that are doing some mods to over ride this.

Having had both the cell phone and the Navagation system, I can say that the cellphone is far more distracting. The person on the other end of the line comanding your attention is dangerous. I won't do cell phones driving.

 

[Nords]

It's actually hardwired. You have to have the parking brake engaged. Although, there are some guys that are doing some mods to over ride this.

I'm just trying to imagine the thought process of the automotive engineer who decided that it'd be cool to sit in a parked car watching DVDs. Maybe he expected it to make him a chick magnet.

Unless, of course, the navigation system was designed by hacking a DVD player.

 

[lowflyer]

We didn't get to ER by leasing.

No, but now that we're FIRE'd, leasing sounds pretty good. I can drive nice cars and not mess with investments. I lease one and own two. Thinking about dumping the really old one and leasing another new one. I absolutely can not justify it financially, but I've decided that I'm a-okay with that. Trying to enjoy some of that FI.

 

[Nords]

No, but now that we're FIRE'd, leasing sounds pretty good. I can drive nice cars and not mess with investments. I lease one and own two. Thinking about dumping the really old one and leasing another new one. I absolutely can not justify it financially, but I've decided that I'm a-okay with that. Trying to enjoy some of that FI.

OK, good point.

All financial assumptions have to be examined after FIRE, especially if they're part of the entertainment & vacation budgets...

I'd still feel that I wasn't mature or responsible enough to handle a leased vehicle. Too much to take care of and to protect from careless dings.

 

[lazygood4nothinbum]

i lease or own according to how long i intend to hold onto a vehicle and how many miles to drive it.

as to the percentage of my funds, i paid for cars according only to my lbym figure before retirement and i'll be figuring similarly after retirement based less on my lbym figure and more on the swr. so lease or ownership becomes less relevant as either way i'm within my budget.

as i don't chance destroying my aging knees on surf boards or in martial arts, i have no problem ding-safing cars on the opposite side of the parking lot for fear that i won't be able to walk back to it. though i've noticed less dings in cars with handicap stickers as they do get the wider spots.

 

[Gone4Good]

Is it worth buying "previously owned" from the dealer or do you pretty much get screwed here too?

 

[lazygood4nothinbum]

i think you'd still be beating previous depreciation. and as that seems to be where most used cars wind up, you'd be gaining choices you won't have in the private market. the more time you spend in a car, the happier you should be with it. www.edmunds.com shows the retail markup of used cars.

i sure wouldn't bother leasing a used car though, seems to defeat the purpose.

 

[rs0460a]

A timely question. DW/me were out "shopping" yesterday, to replace my 18 year old "daily drive", in preperation for retirement this year. Not that we "need" a car, but that we can now walk into a dealership and know we can put "cash on the barrel".

Speaking of technology, the salesman had a checklist to fill out concerning the '89 Olds (we are trading it in, just to get rid of it. We don't want the hassles of selling it privately, and our tax basis is such that donating it dosen't make a lot of sense from a financial view).

Anyway, one of the questions was "was the airbag(s) ever deployed". I replied, "certainly not, since it has no airbags ".

Thus the question of technology.

We never bought a car, depending on technology or "style". We bought it based upon it's ability to get us from point "A" to point "B".

That being the case, and that we keep our cars a long time (since we are cheap frugal) has led us to the "state of FI" (and in a few months, RE ).

- Ron

 

[FinanceDude]

i think you'd still be beating previous depreciation. and as that seems to be where most used cars wind up, you'd be gaining choices you won't have in the private market. the more time you spend in a car, the happier you should be with it. www.edmunds.com shows the retail markup of used cars.

i sure wouldn't bother leasing a used car though, seems to defeat the purpose.

Edmunds and Kelly Blue Book are way out of whack............

Anybody got a recent NADA Black Book I can borrow??

 

[modlair]

Whatever you choose to do, do it on the last day of a month. Sales quota pressure the evening of the 30th or 31st is worth a few hundred bux.

 

[FinanceDude]

Whatever you choose to do, do it on the last day of a month. Sales quota pressure the evening of the 30th or 31st is worth a few hundred bux.

It is??

 

[rjk514]

Check out reports from new car show, see a lot of electric/gas talk by
2009, at lower costs than todays cars...another push to lease for 2 yrs
or so then see what is going on in the marketplace...a lot of new styles
and concepts, and my thought is that it will happen fast as the American
public will demand that car mfg's build cars that are gas misers...

 

[FinanceDude]

Check out reports from new car show, see a lot of electric/gas talk by
2009, at lower costs than todays cars...another push to lease for 2 yrs
or so then see what is going on in the marketplace...a lot of new styles
and concepts, and my thought is that it will happen fast as the American
public will demand that car mfg's build cars that are gas misers...

Or just buy a stick shift corolla that gets 40 mpg, and be done with it...........

 

[lazygood4nothinbum]

or this one has some nice technology you might enjoy http://tinyurl.com/ykwny7

0-60 in 5.5 with a v6 turbo at 300 hp woof

 

[laurence]

So DW and I bought a 2005 Volvo S60 from the dealer in December of '05. It was his courtesy car, and it had about 7500 miles on it. Retailed for 30k+ and we got it for ~19.5k. Full warranty, free oil changes, free courtesy car if it needs overnight work (which it hasn't yet, thankfully), and despite being a 5 cylinder (Volvo has to be different, eh?) I get 28 mpg combined in the worst traffic in San Diego county (78 east to 15 south, for those who know). I get well over 30 on the highway and the engine packs plenty of horses ( 177, I believe). My plan is to keep this car until I can get a good deal on a plug in hybrid model that gets 100 mpg, however long that takes.

 

[rs0460a]

It is??

Yes. Floor Plan charges . The dealer "buys" the car from the factory, and takes a short term loan to cover the value of the car until it is sold by the dealership. This charge (interest only) usually is due the 1st of the month.

Most folks forget that the dealer does not "hold inventory" for the factory. The factory actually "sells" the vehicle to the dealer. If the manufacture delivers a vehicle, it is already paid for (either by the dealer, or a special order from a customer who has ordered through the dealer).

Floor Plan charges (e.g. interest) could be funded by a financial arm of the manufacturer (such as Ford Credit) or a local bank. Depends what the best deal is.

That's why the dealer will give you a slight break the last few days of the month. He knows he has a "bill" coming due...

- Ron

 

[FinanceDude]

Yes. Floor Plan charges . The dealer "buys" the car from the factory, and takes a short term loan to cover the value of the car until it is sold by the dealership. This charge (interest only) usually is due the 1st of the month.

Most folks forget that the dealer does not "hold inventory" for the factory. The factory actually "sells" the vehicle to the dealer. If the manufacture delivers a vehicle, it is already paid for (either by the dealer, or a special order from a customer who has ordered through the dealer).

Floor Plan charges (e.g. interest) could be funded by a financial arm of the manufacturer (such as Ford Credit) or a local bank. Depends what the best deal is.

That's why the dealer will give you a slight break the last few days of the month. He knows he has a "bill" coming due...

- Ron

I was being facetious.........I worked in the industry for 7 years, and know all about paying "juice" and other various things.............

Most of the time, the dealer gets 90 days of "free financing", and then there's a monthly credit carrying cost to the dealer (juice)........most dealers try to sell the cars that are costing them extra dough each month first. As far as dealer holdback, it's only credited to the dealer 4 times a year, so there's often an imbalance on the dealer's balance sheet in months where the "juice" is high (aged inventory), and the credit for holdback back to the dealer to balance the books.......

In addition, many dealers belong to dealer groups that do local advertising, or are part of an advertising program through their zone that raises the true invoice cost of the car.........but I digress.

I believe you can get a good deal any time you want, unless the car is a "must have" with a 3 month waiting list...........

 

[F M All]

I believe you can get a good deal any time you want, unless the car is a "must have" with a 3 month waiting list...........

Except sales quotas and manufacturer's incentive schemes usually end at the end of a month.

When we bought our Beetle, a couple of years ago, the salesman had to sell 2 cars by the end of April to make his number, which would make his manager's number, which would get the dealership some extra kickback. They were ready to deal.

 

[FinanceDude]

Except sales quotas and manufacturer's incentive schemes usually end at the end of a month.

When we bought our Beetle, a couple of years ago, the salesman had to sell 2 cars by the end of April to make his number, which would make his manager's number, which would get the dealership some extra kickback. They were ready to deal.

if you have the knowledge, you can deal anytime............

 

[Nords]

Except sales quotas and manufacturer's incentive schemes usually end at the end of a month.
When we bought our Beetle, a couple of years ago, the salesman had to sell 2 cars by the end of April to make his number, which would make his manager's number, which would get the dealership some extra kickback. They were ready to deal.

Or at least that's what they told you. Another reason I don't like setting foot in a car dealership.

if you have the knowledge, you can deal anytime............

A long-term poster once mentioned that the car dealer told him "You're really good at negotiating!" Another long-term poster let the air out of his ego by pointing out that the goal shouldn't be getting compliments from a car dealer, it should be getting such a good deal on the car that the dealer gives you the type of dirty look that says "I know you poisoned my dog but I just can't prove it"...

 

[F M All]

I thought someone would say something like that! At least I got a better deal than he was prepared to do a couple of weeks earlier.
Was his story the truth? I think I've commented enough on (un)professional liars this morning.........

 

[FinanceDude]

I thought someone would say something like that! At least I got a better deal than he was prepared to do a couple of weeks earlier.
Was his story the truth? I think I've commented enough on (un)professional liars this morning.........

Hard to know..........and here's a real life example. A friend of mine at the time was a GM at a Chrysler dealership. He only calls me when "the manufacturer's are being stupid"........... So, I get a call from him in February 2004. If his dealership sells 30 minivans that month, the mnaufacturer gives them $1500 per vehicle for each van sold. The dealer has the option to pass it on to the consumer or keep it.

Bottom line, I payed invoice, less a $6000 rebate, less the $1500 dealer cash..........and although I was not looking, I got rid of my 99 Grand Caravan with 130,000 miles on it..........

I'll bet some other folks didn't get the $1500, but if push came to shove, the dealer would give it away to sell a car..........