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Midsize Sedans 2.0

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  • aviboy97aviboy97 Posts: 3,159
    I put down $2,300 PLUS another $500 for the Gap Insurance

    I can't believe that Toyota still has the customer pay for GAP insurance on leases. Whatta crock..
  • akirbyakirby Posts: 7,699
    You're looking at a monthly payment - we're looking at the total cost. As jeffyscott indicated - I can get a $100/month payment on a Bentley if I put enough money down up front. It doesn't change the total out of pocket expenses.

    The point is leasing a new car every 2-3 years is THE most expensive option because that's when the vehicle depreciates the most. It's no different than buying a new one and trading it in every 2-3 years - just a different way to do the financing.

    If you don't stop looking only at monthly payments and look at total cost then you'll always be throwing money away.

    Note - I didn't say leasing was bad. It's a perfectly acceptable way to finance a vehicle IF you only intend to keep it 2 or 3 years in the first place and you understand that you're paying for that privilege. If you're doing it because you think it's cheaper, then that's the wrong reason. It's cheaper to buy a slightly used car and keep it for a long time.
  • akirbyakirby Posts: 7,699
    Why would you even need gap insurance on a lease? Is it just to cover overage on the mileage or excessive damage?
  • bhmr59bhmr59 Posts: 1,598
    Gap insurance protects the customer in the event the car is totaled and the value of the car is less than the residual value, I think, plus the remaining payments owed for the duration of the lease. i.e., if you lease a car today and it is stolen or totaled 6 weeks from now, you would be upside down on the lease if you didn't have gap insurance and would still owe the full amount of the remaining lease payments.

    I think Edmunds has an article about leasing and lease gap that recommends as little down payment as possible on a lease since the whole downpayment would be lost if the car were totaled.

    Most car insurance companies offer this coverage through an endorsement that covers the lease gap OR the amount outstanding on a loan for a car that has been purchased (do not coverage any amount the customer may be in arrears for a loan or lease).

    In my limited experience of a few hundred transactions, lease/loan gap has ALWAYS been far less expensive from the insurance company than from the dealer.
  • aviboy97aviboy97 Posts: 3,159
    The point is leasing a new car every 2-3 years is THE most expensive option because that's when the vehicle depreciates the most. It's no different than buying a new one and trading it in every 2-3 years - just a different way to do the financing.

    I highly disagree.

    First, I really do not think this discussion belongs in this thread to begin with. Second, there is a HUGE difference between leasing for 2-3 years and getting a new car then financing a car and trading it in after 2-3 years. This is why....

    On a lease, you are only responsible for paying the payment plus any fees associated with the lease. That is your total exposure. You never need to worry about trade value or depreciation.

    When you finance, which most people take a 60 month finance, you will most likley owe more then the car is worth after 2-3 years, unless you put about 30% or more down on the purchase. And at that rate, you already spent more then you would in 2-3 years of leasing. Plus, your finance payment is almost always higher then a lease payment.

    If you are a buyer who gets the 2-3 year itch to buy a car, leasing is the way to go. I have never, ever seen someone benefit from trading out of a car that they are in for 2-3 years on the industry average of a 60 month loan, unless there was a substantial amount of money put down on the original purchase to begin with...
  • aviboy97aviboy97 Posts: 3,159
    Why would you even need gap insurance on a lease? Is it just to cover overage on the mileage or excessive damage?

    Because, if the car is totaled, the bank (leasing company) needs to get the full balance owed on the car. That is the sum of the lease payments plus the buyout.

    When a car is leased, that total amount owed is ALWAYS waaay higher then the value an insurance company will give you. You, the lessee, are responsible for the total balance. OUCH!

    Most mfgr's include GAP at no cost. I think it's just crazy that Toyota porks their customers that way and they make them buy it. Leasing a car without GAP is just plain stupid. You need it.

    Many insurance companies will offer GAP for far less then a dealer. Usually for $250. Dealers, like me, will charge the max amount allowed by any financial institution, which is $500. I do it on loans of course, not leases. (hate on me if you wish, I don't mind)
  • gtgtcobragtgtcobra Posts: 259
    "When you finance, which most people take a 60 month finance, you will most likley owe more then the car is worth after 2-3 years, unless you put about 30% or more down on the purchase. And at that rate, you already spent more then you would in 2-3 years of leasing. Plus, your finance payment is almost always higher then a lease payment."

    This is the "EXACTLY" the reason why I leased a car instead of buying it. I did a cost analysis and I found out that I could stretch out a car lease every 3 years for a period of over over 12 years and spend the same amount of money over a period of 12 years of leasing a vehicle as I would have spent over a period of 5 years if I had payments for 5 years owning the vehicle. My savings over the 12 year period is tremendous. That's why I chose to lease. :)
  • backybacky Twin CitiesPosts: 18,728
    Your analysis is flawed. If you do what you say, using your Camry as an example, you'll spend $33,664 over 12 years if you lease a car every 3 years--assuming you get exactly the same deal each time that you got on the 2010 Camry. A 60-month loan on the same Camry would cost a LOT less than $33,664. Let's say you bought the Camry. Invoice less $750 rebate is about $20k, including the alloy wheels. $20k financed at 4.29% (current rate at my local bank for 60 months) with $2800 down (same down as on your lease), so loan of $17,200, is $325 a month, or total payout over 5 years of $22,300. But at the end of the five years, you'd own a five-year-old Camry that would be worth something, and you could roll that into the next car. I think if you carry that analysis forward, e.g. sell the first car after five years and buy another one, using the money from the sale of the first car as a down payment, you'll find your cash outlay overall is less when buying the cars. I think that is what aviboy97 was trying to say.

    However, in order to do that, you'd have to be able and willing to make higher monthly payments. That is the biggest attraction of a lease for many people--being able to drive a car for less money out of pocket each month than if the car is purchased.
  • explorerx4explorerx4 Central CTPosts: 9,723
    a camry lease is 18 cents a mile over 12k per year, so 6k over per year for 3 years = $3240.
    $3240 / 36 months = $90/month.
  • Your analysis is flawed.

    You are being too kind.

    I have not had a 60 month auto loan since the 1990's and never will again. 36 months is ideal but 48 is acceptable if you have a decent down payment/interest rate. Buying a one year old vehicle after someone else eats the 30% depreciation from MSRP works well for me.

    Owning builds equity if you buy/finance appropriately and you can come out ahead of leasing in the long run. I hear people talk about "saving" $100/month with lease vs. buy and laugh it off. I just paid off my '06 Lucerne, it now has 55,000 miles on it and is worth $11K easy. It was one year old with 18,000 miles on it when I bought it for $19K - 3 years ago.
  • backybacky Twin CitiesPosts: 18,728
    Sounds kind of like a sneeze, doesn't it??

    I read a rather glowing review on the new Kizashi in Automobile Magazine today, waiting for the free tire rotation/balance on my Elantra. It was a much more positive review than I've read elsewhere--just proves again different strokes for different folks.

    They noted the relatively short length of the car was a plus, and I agree. I think mid-sizers are getting too big/long of late, e.g. Accord and Mazda6. They also compared the car to the Legacy and noted they are about the same price, also both offer AWD. They said something like, the most likely reason someone would be interested in the Kizashi and not buy it is because they bought the Legacy instead. I see their point: two relatively low volume Japanese car companies (although Suzuki is much lower volume in the US than Subaru), with a sedan that might interest someone who is looking for something other than the same-old choices.

    The car itself looks pretty good, but there are so few Suzuki dealers around, even in my large metro area, I would be a little worried about service/support.

    And this reminds me... the RIP Aura is still over there on the right... ;)
  • gtgtcobragtgtcobra Posts: 259
    "Your analysis is flawed. If you do what you say, using your Camry as an example, you'll spend $33,664 over 12 years if you lease a car every 3 years--assuming you get exactly the same deal each time that you got on the 2010 Camry. A 60-month loan on the same Camry would cost a LOT less than $33,664. Let's say you bought the Camry. Invoice less $750 rebate is about $20k, including the alloy wheels. $20k financed at 4.29% (current rate at my local bank for 60 months) with $2800 down (same down as on your lease), so loan of $17,200, is $325 a month, or total payout over 5 years of $22,300. But at the end of the five years, you'd own a five-year-old Camry that would be worth something, and you could roll that into the next car. I think if you carry that analysis forward, e.g. sell the first car after five years and buy another one, using the money from the sale of the first car as a down payment, you'll find your cash outlay overall is less when buying the cars. I think that is what aviboy97 was trying to say."

    blacky,
    I disagree with your calculations and I will tell you why. First of all, if I were to put that $2,800 down that I put down for the lease to instead buy the 2010 Camry, my monthly payments would be a LOT more if I were to finance the loan over a 5 year period. Like you said, my monthly payments would be "at least" $325 per month X 60 months = $19,500.

    Then ADD the $2,800 down payment to the $19,500 and you get $22,300 TOTAL money that I would have to spend ONLY during the first 5 year period of ownership of this particular vehicle just to purchase this vehicle. This does NOT include any major repairs.

    BUT what about all of the repair costs that will be incurred after the 3rd year of ownership with all the high miles that I drive each and every year? I drive an average of 18,000 miles to 20,000 miles per year. That means that by the 3rd year and after-wards my vehicle will need major service like brakes, rotors, tires, and anything else which may break on the vehicle either because of the high mileage or from wear and tear. The "average" repair nowadays costs between $400 to $500 if it's not a major repair. However, major repairs can also cost $1,000 or more and in the many thousands of dollars depending on what type of major repair that needs to be done on the vehicle. The cost of labor is very expensive and the parts are equally as expensive to repair a vehicle if the repair is a major repair. ALSO, once you spend that money on a major repair, you do NOT KNOW how long before the same vehicle needs another major repair. Especially when a vehicle has very high mileage on it.

    In a matter of 4 years I would have 72,000 to 80,000 miles on my 2010 Camry. In 5 years, I would have between 90,000 to 100,000 miles on it. If I decided to keep the vehicle beyond 5+ years, I would have added about 18,000 to 20,000+ miles MORE to my Camry during each consecutive year of ownership. I would have easily racked up 120,000 to 160,000 miles on my Camry if I were to hold on to it for a minimum of 6 to 8 years. That means that I would NEED to do MAJOR repairs to my Camry which will cost me many thousands of dollars with that type of high mileage that's on my vehicle. From my own experience of owning Japanese, Korean and American vehicles, any vehicle that has over 120,000+ miles on it starts becoming a MONEY PIT. It will eventually start needing major repairs to it. Also, after doing the first major repair to a high mileage vehicle, once the vehicle gets even higher mileage on it, you will not know when the vehicle will break down again and when it will need MORE MAJOR repairs again.

    I ALSO calculated the repair costs between the middle of year 3 and year 9 and I ALSO factored in the high mileage that I would have on my vehicle. When I did this, I calculated that I would have spent OVER $33,000 to $38,000 over the course of 9 years on my vehicle if I also added in all the repairs that my vehicle would need just because of the very high mileage that it would have on it.

    So, NO, it would NOT be economically feasible or worthwhile for me to buy the 2010 Camry. It would be MUCH CHEAPER and more economically feasible for me leasing the Camry every 3 years. It would take me over 12 years to 13.5 years of leasing for me to spend that $33,000 to $38,000 that I would have already spent if I were to own the SAME Camry vehicle for 6 to 8 years. Basically, with the calculations which I did, I would SAVE LOTS OF MONEY and ALSO get 6 to 7.5 MORE YEARS out of the vehicle by continuing to lease a brand new Camry every 3 years than I would by purchasing it. So if I were to lease a brand new Camry every 3 years for the next 12 to 13.5 years I would have spent that $33,000 to $38,000. If I were to buy a Camry, I would have spent that $33,000 to $38,000 within the first 6 to 7.5 years of ownership because I would have spent LOTS of money for major repairs due to the very high mileage that my Camry would have on it from driving 18,000 to 20,000+ miles per year.

    That's the reason WHY leasing is much better for me. Leasing is MUCH CHEAPER for me than buying. Especially when I have to deal with major repairs when owning a vehicle due to the very high mileage that I will rack up on vehicle after 6 to 8+ years of ownership. I've been there and done that already. Leasing is THE WAY TO GO for me! :)
  • explorerx4explorerx4 Central CTPosts: 9,723
    so what did you do with the Santa Fe?
  • gtgtcobragtgtcobra Posts: 259
    My 2001 Santa Fe was 9 years old with over 161,000+ original miles on it and it needed over $4,000+ in repairs due to the very high mileage that I put on it.
    I purchased the Santa Fe brand new with only 5 miles on it. Once the vehicle got over 60,000 miles after the first 3 years of ownership, I had to spend money on this vehicle for repairs for wear and tear items which added up in the thousands of dollars from year 3 to year 9 of ownership. Lots of things on the vehicle needed replacement due to wear and tear and the high mileage that it had. Even though I did all the repairs that it needed due to the high mileage and the wear and tear, the Santa Fe needed MORE repairs because I kept racking up the miles on it. It was NOT worth it to sink anymore money into the Santa Fe.
    I sold it for $3,350 and I used $2,800 out of the $3,350 to lease my 2010 Camry LE.
    Leasing is the best thing that I ever did. :)
  • patpat Posts: 10,421
    This looks like a good place to remind ourselves we're here to talk about midsize sedans and get back to them. We have other places to pursue these off topic threads that have cropped up lately.
  • I think the Suzuki looks pretty sweet. I believe in the last report I read, it was lacking the steak to match the sizzle. The LLN report said its in the 7 second range from 0-60 and has 6 speed manuals on most models. That is a benefit to me,
  • patpat Posts: 10,421
    It's time to get back on topic. A couple of posts have been removed.
  • patpat Posts: 10,421
    Folks, please! The leasing conversation does not belong here. Please get back to the cars themselves.
  • That means that I would NEED to do MAJOR repairs to my Camry which will cost me many thousands of dollars with that type of high mileage that's on my vehicle.

    Not sure why you think that. I've never had major repairs done on any vehicle I've ever owned in 30 years of driving. Most modern vehicles will run nearly 200,000 miles (150,000 minimum) without any major repairs. I've driven a couple of my cars to plus 100,000 with just a new set of tires/brakes around 60,000 miles and since the car was paid for by then, it was no big deal.

    If you want lease then by all means do it but consider buying a 1 year old Camry with 15,000 miles on it for $17K and financing for 4 years. You'll come out ahead and have a $8K car when it's paid off.

    Backy's comment regarding people leasing to get "more car than they could buy" still holds true today. I might have missed it but with the additional mileage charge on your lease aren't you looking at $275/month anyway?
  • xmechxmech Posts: 90
    Hey guys! How about those Chicago Cubs?
  • backybacky Twin CitiesPosts: 18,728
    They are probably all gearing up to go to the Chicago Auto Show next month, before they head off to spring training. I might be able to get to the Chicago show because of a business trip. Been a few years since I was there. I'm looking forward to seeing the all-new 2011 Sonata and the Kizashi and Legacy, as well as actually being able to sit in the 2010 Fusion and Milan (last year at the Twin Cities Auto Show they were locked up tight). There's a few other new vehicles I want to see, but they're not mid-sized sedans. I am wondering if Kia will have the all-new 2011 Optima there, at least on a turntable.

    If I miss the Chicago show, I'll have to wait for the smaller Twin Cities show in March. :(
  • m6userm6user Posts: 3,006
    I go to the Chicago show just about every year. Have been getting in free for the past 30 years(when I've been home) with my military ID but now that I've retired I have to pay but it's no big deal...I think it's 11 bucks this year. I've got a list of both midsize cars and others that I'm particularly interested in checking out.

    '11 Sonata
    '10 Kizashi
    '11 Regal
    '10 CC
    '10 Legacy
    '11 Cruze
    '11 Sorento
    `11 Mustang
    '11 Optima if displayed
    '11 Tucson

    There are others but I actually take a list with me now because in the past I would come home and realize that I completely missed a vehicle that I really wanted to see because I was going to double back to it or something.

    Side note. I had my 07 Mazda6 I4 in for an oil change last week and next door is a Suzuki dealer, actually it's owned by the same dealer. I sat in a Kizashi in the showroom. Everything was as expected from what I've read as to interior quality being pretty good but a couple of things I didn't like. 1. The Suzuki "S" on the front grill is enormous(some might say gaudy). 2. The center armrest sits too far back(for me) to rest on it and reach the wheel which I like to do on longer drives. Yes, I had the wheel telescoped back as far as it would go for those wondering. 3. I like big side outside mirrors but these are even bigger than I would prefer but they do swivel which is a good thing. Overall, pretty good looking vehicle and sized nicely. Love the little raised edge on the rear trunk lid and stance of the car looks good. Hope they have an uplevel version at the auto show with leather/nav setup so can see what that's like. I'm still torn on CVTs though.
  • backybacky Twin CitiesPosts: 18,728
    I forgot about the Regal, I'll have to check that out to see how the General is progressing. Gotta see the Cruze and Focus and Fiesta and Golf and Forte and other small cars too, and the Tucson and Equinox.

    Re the mirrors on the Kizashi... the review I read in Automobile Magazine noted those also, but said something like, better get used to mirrors like that. Apparently there are some new regs re mirrors that will force them to be larger from now on.

    One advantage of the Twin Cities' auto show is, it's so small it's pretty hard to miss anything, even w/o a list. I can circumnavigate the whole showfloor in about 2 hours, depending on how many vehicles I linger at.
  • m6userm6user Posts: 3,006
    The Focus is on my list too, an oversight. Not too interested in the Fiesta as an actual consideration but will certainly look at it. It's just too small for me. The interior of the Forte just doesn't do it for me.

    Those Kizashi mirrors. The actual glass mirror part was not really too big but it seemed like the housing was huge....like they could have made it a little smaller fit to the mirror. Take a look, let us know what you think.

    I usually take the train downtown from my burb and spend about 6-7 hours at the show which includes lunch(love paying $20 for a burger, fries, Coke don't ya know).
    Even though I spend that much time I can still miss something. The show is so huge with all the extraneous stuff that I find myself wondering through......almost broke down for a Vegimatic but regained my senses.
  • I forgot about the Regal, I'll have to check that out to see how the General is progressing. Gotta see the Cruze and Focus and Fiesta and Golf and Forte and other small cars too, and the Tucson and Equinox.

    The Regal looked nice in "GS" trim in Detroit. I think its getting really hard to stand out in the midsize sedan category; you basically need something reliable with a lot of amenities to come to the party, and then if you have a high horsepower version or high MPG version, that differentiates you a little. The Regal looks credible but not the greatest thing since sliced bread.

    The Cruze (which is already on sale elsewhere) didn't seem too exciting in terms of styling or interior. It was more like a "this is the new Cobalt which was the new Cavalier" kind of thing. I don't think the current Focus is much to write home about either, but the Corolla is also boredom on wheels, so I don't know what to expect from the segment. I think the Civic walks away there (especially the SI). I think the next generation Focus (which was on display in the D) looks fantastic (although it reminds me a lot of the pre-grinning Mazda3 alot).

    I don't know, I didn't see anything that made me want to run out and mortgage the kids to get, which might just be a sign of the times. Oh well, its cheaper not to make changes anyway I suppose.
  • lehrer1lehrer1 Posts: 54
    Does anybody know when car show in Chicago starts/ends?
  • backybacky Twin CitiesPosts: 18,728
    I was referring to the new Focus. There was a big story on Ford's new small cars in my local paper today. The question is, will the American car buying public go for them? They look like good small cars, but here's the catch: according to this article, the new Focus will top out at about $30k in US-spec, and the Festiva will start at about $14k and top out at about $20k. I don't know about others, but I see BIG problems for Ford if these prices are accurate. This would mean the new Focus will actually cost MORE than the Fusion, which is a fine car with really good fuel economy, and much roomier than the Focus (and Americans like room in their cars for their big bu...uh.... families!). Consider also there's all kinds of good small cars out there that cost a LOT less than $20-30k. Will the Focus be THAT much better?

    Anyway, looks like these new small cars will be a major test of Ford's "global car" strategy. I wonder if the next-gen Fusion will be a "global car" also... and cost, what, $35k???
  • m6userm6user Posts: 3,006
    I just have to believe your local paper got it wrong. I can't see the Focus approaching 30k. That may be what the cost would be if you took the European prices and switched to dollars but Ford would be crazy to try to price them that high IMO.
  • They look like good small cars, but here's the catch: according to this article, the new Focus will top out at about $30k in US-spec, and the Festiva will start at about $14k and top out at about $20k. I don't know about others, but I see BIG problems for Ford if these prices are accurate.

    I heard they were talking about a technology pkg and a driver's pkg, so if you want things like navigation, lane keeping, adaptive cruise control, and the stuff you usually find on premium vehicles and typically isn't even offered in this segment, than yeah, that is a pretty pricey Focus (similar to the Prius with and without those features).

    For the model and features comparable with other vehicles in the segment, pricing will be inline.

    The Fiesta starts about where the Fit does and tops out about where the Fit does, well below the Mini, and considerably above the Yaris and Accent. Are you buying the car because its the cheapest new one available, or because you want a small fuel efficient vehicle that doesn't make you feel like you're in a penalty box?
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