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Comments
You would probobly have to do another 4 wheel aligment, and it might cost you $500-600 bucks or so with labor.
I'm not sure if this is someday, but personally I don't understand Mark's logic. It seems to me that when you acquire (buy or lease) a car, you must pay for the use you'll have from the car, which includes mileage, wear and tear, etc. It then becomes a financing decision as to whether you pay for it up front or over time, buy or lease, etc. I believe that the financing arm's of car companies make money, so why does it necessarily not make sense to pay cash and avoid paying them?
I'm sure you've seen all the articles as have I about all the people who are "upside down" on cars. I can't see how that makes much sense. To me it actually makes more sense to borrow money for things that hold value or appreciate, otherwise you're left with debt and no asset.
Great experience with the dealer today. Willing to go the extra mile (even on the finances) to make sure I got the car I want. Might be back soon for a Q7 for the wife.
Thanks to all for the good advice.
Although I can also add, one reason perhaps NOT to pay cash is "opportunity cost" of money or even the "peace of mind" that accrues to one with more liquidity.
Of course my accountant also claims that most folks grow up to buy a car (on time payments) and rent an apartment which gets them no equity and often minus equity.
The deals on leases, at this juncture, available make them difficult to pass up.
Perhaps if I could acquire a two year old car off lease with about 50% of its original factory warranty (and also be CPO'd), that would would be the most financially sagacious "acquisition" method.
Buying a new car in cash -- seems to ME -- like burning twenty dollar bills to light a cigar (and I don't even smoke.)
To each his/her own.
One of the folks I work with just bought a new Ford F150 4 door "all lux" pickup truck ($44,000 MSRP). He got it for $33,000 (employee pricing, etc etc etc.)
We played a little bit of a speculative game -- after 4 years, if history is a good guide, the truck will have retained a larger % of its MSRP than most cars, after 6 years even more and after 10 years, "fugettaboudit."
Not only is this Ford pickup truck more luxurious than most cars these days, it seems to have been a bargain. I rode in the thing and it is "library quiet" has a great sound system, has power everything and a [thirsty] V8 engine. It does not (at least I hope not) handle like any Audi. But, it seems more car like than it has a "right" to.
I am not thinking of going to the pick-em-up side of life (at least not yet.) But, if I HAD to live with this vehicle (gasoline prices would bother me, somewhat) I would not feel like I would be out of place in a suit driving it (even here in Cincinnati.)
Maybe, "rent what depreciates, buy what appreciates and buy trucks" makes the most sense.
I'm not quite ready for that -- yet!
Assume you can average 8% on 50k for 6 years Thats 79,000K Sure the stock/bond market fluctuates, but lets bring that to its historical level of 10% Thats $107,000.
Naturally the finance cost is going to bring it down, but remember your paying off a loan, so the amount borrowed decreases.
What really determines is the ability to make payments? Lets assume this person is not retired. Can he/she afford to make monthly payments? Does this person need to grow his/her net worth?
Example. It takes 53 months compounding at 8% making $800 permonth savings into an account to reach $50,000. That same 50k if left to compound at 8% (use cash flow to pay $800 monthly payments) would grow to $71,000. Subtract the interest on the car, and thats the opportunity cost! Id rather have a growing lump sum! But thats my preference. I always have the ability to pay off this loan with the lump sum if I need too! This gives me options with my money. (depending on liquidity).
Same can be said for real estate, or anyother LONG TERM investment. One of my stocks pays over 4% dividend and has a nice growth record in the 15 y;ears I have owned it. If that 4% about pays my interest, then I still have the growth.
ALso, if your income rises, paymentst becomes a smaller %.
If I have substantial net worth, very little income from compensation (retired) and a good bit in bonds for income, then perhaps paying cash makes sense. And of course there are many other situations also where it make sense.
It depends on your goals, net worth, liquidity factors, and preferences! There is no right or wrong. Nobody has to spend 50k or more on a car!
I agree that if one were to invest the money of purchase into a good stock ETF, then you'd probably win the entire game, but most people who lease don't consider it this way and don't have the lump sum of cash on hand which they then invest. Thus, there is not investment to offset the interest loss by renting.
Here's a scenario for you: Pull $35K out of a collection of stock mutual funds in January of '00 & move it to a money market (can't remember, but 4 - 4.5%). In May, after the market is well along on its slide to oblivion (that lasted 3, count em, years), pay cash for a car, which would have cost more to finance then than money markets (let alone anything else) were paying.
Three years after purchase, comparing what the car was worth to what the investments would have been, plus the cost of financing, yielded an interesting, and rather different result than your well thought out (generic & optimistic) scenario.
Granted, mostly luck, but it worked for me. The next time (on my wife's vehicle, which was a truck, by the way), we dollar cost averaged what amounted to a cash purchase, over ~20 months.
If you want a new vehicle (or need one because the warranty on an inherently unreliable & expensive one runs out), leasing makes lots of sense, particularly if the manufacturer is "participating" to move the iron.
If you keep cars a long time and drive them 15 - 20K mi/year in the meantime. . .not so much.
Leasing vs. buying, its a matter of where you want the equity. Likewise, why buy somting that depreciates when you can have your equity in somthing that does not? Stock markets don't go up every year, but very few cars actually appreciate!
INvesting long term. I do this for a living, And as I said, to each his own!
I manage portfolios, employ 3rd party managers for my clinets, and manage an ETF portfolio. In the long run, and I have been doing this for 20 years, it works.
Not every year mind you, and in the current environment, its more comforting to do what every one else is doing. My smartest clients are selling real estate and buying stocks. Why? Cuz you buy low and sell high. Is the stockmarket low? Don't know, but after 5 lack luster years and a real estate market thats kinda high, it might make sense.
Nobody gets in on the bottom, or out at the top on a regular basis. But if you come close, your doing well. good luck
There are so many variables to each scenario that warrant what is right and what is wrong. As long as you have a long term plan and the dicipline to do it, then it works.
The benchmark of success is achieving your goals! There are many many roads to take!
IF you sold equity funds in Jan '00 that was a smart/lucky move! If we can all sell 3 months before a cyclical peak we can all pay cash for our audis, and drive them on our private islands!
I was at least understanding your argument until I read this sentence above. The premise -- and this has stuck with me since I got my very first leased car in 1977, a 1978 Audi 5000 -- is to buy what appreciates and "rent" what depreciates. Generally speaking buying a house is an investment in an appreciating asset while buying a car -- unless you can get zero percent interest (and even then somewhat dubious) -- is virtually always something that depreciates (and often in the first 2 - 4 years MOST rapidly.)
If you have $50K lump sum of cash and give it to Audi of America, for example, at the end of the 4 years you do have some equity, probably about $20,000 worth at wholesale (and retail may or may not be better if you try to sell it for retail yourself.) Of course, I may be totally wrong to think that an Audi will be worth 40% of its MSRP after 48 months -- I hope it is more, but I wouldn't count on it -- the more expensive it is, indeed, I would think the smaller the residual in dollars (i.e., a $45K A6 vs an optioned up one for $54K would probably yield a steeper depreciation for the $54K version.)
I do not have any criticism of anyone's desire or ability to pay cash (in one lump) -- but cars (and unfortunately Audis in particular) seem to lose their value soooo quickly it is "breathtaking."
My Audi dealer has a $128,000 A8L W12 on the showroom floor. It is my "belief" that the person who "acquires" this car will keep it less than 3 years -- dibs, dibs -- for when it comes back in it will probably end up being sold for a number than begins with a "5" -- the depreciation will be that steep.
But, I've been wrong before.
Cars (with few exceptions) are the opposite of Real Estate, buy what grows, rent (and expense) what shrinks -- my CPA owns his own building and leases Volvos.
Hopefully he is as sharp a guy as I think he is.
Then again, my bank does NOT own its own building. . . .
High finance? :confuse:
Now, if i find one that has all the goodies that i want, except for Nav, can I add the stock system afterwards, and if so, what would it cost? Also wondering if I could possibly do this with the voice recognition package.
I've test driven the Audi, as well as the M and 530. I think the M is a better overall value, but I must admit that I'm drawn to Audi's styling much more. With RL's now going out fully loaded (as they offer no options) in the $42k range brand new, that's probably the best option, but the car is so bland that I can't bring myself to spend the dough on what looks like an overgrown Accord.
I do really like the A6, and quattro is certainly an advantage. Call it nitpicking, but one thing that did bother me about the A6 i test drove (3.2) was the manually controlled tilt/telescoping steering. Really? In a $50k car? Not a big deal, but for some reason bugged me.
Sorry to get off my own topic, but if anyone has thoughts on the Nav, much appreciated, as this is a must for me. Thanks.
-Paul
I would try to find the dealer principal's own car, if possible. Usually it has all the toys -- and often it is a cream puff since it may be fairly low milage.
The dealer's wife had a fully loaded A6 4.2 and it was let go with about 5 or 6 thousand miles on it, for a "song" whatever that means.
Don't count on the after the fact Nav unless you have patience and money and, BTW, money. :shades:
$1500 was a pretty good deal on the navigation from the factory. Audi raised in to $1800 on the 2006 models.
You don't want to ask how I know.
-Paul
The adage of buying what appreciates and renting what depreciates is not always correct. There are so many variables involved in that simple statement that come into play. One could argue that buying what depreciates makes more sense as you are more likely to get fair market value for the auto at the end of your use, as opposed to renting, when the financing agency will make darn sure they don't get stuck with the short end of the straw and will thus calculate the numbers to guarantee that.
My reference to renting vs. buying a home had to do with the time one would live in the place. It is generally best to rent if one would only live in an area for a few years, and better to buy if living 5 or more years as you obtain more equity in the property...likewise with autos, if planning on getting a new car every 3 years, then definitely rent, but if holding it longer, then consider buying.
I think there are pros and cons to either way of looking at the equation...
There is only one thing -- this is generally a car forum, not a graduate level (MBA) course in finance.
Generalizations and platitudes are certainly NOT the basis for any of us to take actions. Even if I were capable of more detailed analysis and argument, it would still have to be couched with "your circumstances will determine if this approach is appropriate for your circumstances."
I fully and freely offer the phrase "buy. . . .rent. . . ." and hereby advise that it is a generalization and, frankly, a platitude.
Here's another one: "waste not, want not. . ."
Who could argue with that?
"A stitch in time, saves, nine. . ."
Drive it like you live.
:shades:
They had a bright red with black interior s-line. I thought I would hate the red but it was really nice. Not my color mind you.
They had a new A6 avent. These A6's are made first as wagons. This thing was simply stunning! Long and graceful! I was blown away. The 58k sticker blew me away also! Adaptive Suspension at $2800! This thing was fully loaded by the way.
I was very impressed.
Sat in the a fully loaded A3 and liked it better than the A4. its a lot of car and style for the money. When they drop a 3.2 with Manual its gonna be a killer little car! Interior was excellent!
please, Audi, an A6 with s-line! oyseter grey with ameretto! I'll be a good boy!
The A3 has the DSG!
For what I really want, the A3 might be closer to what I want then the A6. Interior is a bit nicer than the X3, back seat about the same as A4.
I built one and checked off everything and it was like 33k!
I will drive them all and decide in due time!
LIke me to come home with an A8! "Honey, we gotta talk!"
Are you all still getting the "update radio station list" on the MMI? I get it about once a minute when listening to XM. I have yet to find a good explanation. Others have mentioned it as well and no one can resolve it.
Ideas?
I love Sirius -- and I love REAR SURROUND mode.
Still won't sort by channel number w/o first sorting by genre...
-Paul
I am preaching to the crowd!
Made my 03' allroad with new tires and only 35 k on it feeling like the flintstones mobile!
Mark in Cincy, quick question. If you had to choose just one of either X3 or the A6 of the ones sitting in your garage. Just one, the way you have them configured as is, which do you keep?
The TT was fun to drive, but I always felt like a bug when I was driving it -- but it was really connected to the road. It was returned off lease on Wednesday and it was really not too traumatic.
The BMW needs a tad more power, the Audi needs stickier tires and/or perhaps the sport package option -- the Audi is more comfortable, but either one of these cars would be easy to live with for 36 months.
The trunk in the A6 is actually more spacious than the X3's cargo hold -- but the X3 with the sport suspension, 6spd, and upgraded everything is pretty spanky too.
The A6, as noted, is more comfortable and somewhat more upscale and I am slowly coming to accept and dare I say may even be growing to appreciate the tiptronic.
The A6 has a better sound system and voice activiation is great.
Here is my answer then: IF my A6 had a stick shift it would be the winner, if the X3 had the 255 HP 3.0 BMW engine (coming soon) and the BMW SMG transmission, it would be the winner.
The BMW is $80 per month less money but it requires more fuel.
It really is a toss up.
:confuse:
Perhaps you may want to note my comments before you pony up your $750 for "Advanced Key."
I was kind of taken back how nice the 6spd tip was! Sport mode was excellent!
I think your like a lot of folks, need it stickier and faster!
I think if you had to drive cross country you'd take the A6?
I like you prefer to shift, but the luxury thing ain't all that half bad.
The darn allroad is just the perfect blend between! X3 is spotier and more fun to drive than the C6. But the interior needs the upgrading. It would be hard to "step down".
I hope the improved interior is enough. I think by january the new motor is due.
thanks for the response!
Get rid of the disclaimer and it may just work...
This car does not come with the voice activation system although it does have the button on the steering wheel. I note that voice activation is only a $350 option. Based upon the low cost, I would assume this is something I could have added for a minimal cost (just add a chip to the computer?). The car basically has the premium package and the convenience package and 17" wheels.
Last question, I know that Audi provides free maintenance for the first 4 years and 50,000 miles. Does this also include a loaner car for standard maintenance or do I have to wait for repairs/arrange my own transportation? As an Infiniti owner I know I have to pay for regular maintenance at Infiniti but it is nice to walk in and drive out 10 minutes later with a loaner. My ideal would be to take the A6 in for the 15,000 mile service for free and also get a loaner from Audi for free during the process but I am not sure the free loaner is part of their standard program.
Any insight into the above questions would be appreciated.
There is not dealer installation of voice at this time. Everyone gets the button, voice or no voice.
Loaners are only required by AOA for the top line auto (A8), but most Audi dealerships will provide it to their customers, especially if the car was purchased there. You can ask them to make it part of your contract...
The good thing about you buying this car used is that you can ask to have it certified preowned. This would cover it up to 100K miles or some amount of years (I can't remember right now)... I would insist on this.
The car is great, good luck in the purchase process! :shades:
My dealer (previously) stated that loaners are standard IF you are at the dealer that you purchased your vehicle; and if you were at a different dealer it was at their discretion.
Unless this was their specific policy and it really is only for the A8 just what I was told.
Loaners during the Audi Advantage are standard normal at the buying dealer and my experience is that even NON original purchase dealers offer loaners (they want your biz!)
Get the CPO before you sign -- 100K miles / 6 yrs.
No problems otherwise.
Engine sips gas -- 27MPG is REAL.
Engine still adequate, but seems significantly better in terms of low end grunt than it was when brand new.
Using lots of top tier gas when possible.
Oil and tire rotation, etc done at 5K miles.
Replacement of start button takes 10 minutes. Seems like a really cool and overpriced option -- maybe they charge $750 for it so they can buy all the replacement buttons the thing will require.
BMW charges $1,000 for this option.
Voice activiation works 98% perfectly. Why is it ONLY $350.
25 radio station presets are inadequate -- go to 99.
Voice name tag memory is now full -- quintuple its capacity -- memory is cheap.
Note: get a better start stop switch and use the money you charge for voice to buy another bit of storage. It would be OK with me if you charged $500 for voice, if you would reduce the price of Advance Key to $$500.
These tires (18") are wimpy. But quiet. I have the 245 x 40 A/S.
I would not be buying this at a Audi dealer. My sister is in the car business and this car got traded in yesterday. She would basically sell it to me for the trade in allowance given to the previous owners. My plan would be to drive the car for a about year take the mileage up to say 24,000 miles and then sell it retail and start the process over again. In theory I should be able to get a newer used car every year or so for virtually no net cost (i.e. sell the used car after a year on a retail basis for what I paid wholesale a year earlier). At that point the car would still be less than 2 years old and have plenty of base warranty left. Since Audi includes free maintenance I think my only out of pocket might be tires if that came up.
BTW...Audi only requires an oil change every 10,000 miles!??
She gave me the car to try out yesterday (I've still got it now. I will either give it back tomorrow or I will buy it). Car drives great and has good power even if it is "only" 255 hp. The car is very smooth and quiet yet handles firmly. My only peeves are that this car does not have heated seats and the lack of the voice response option. I don't really need the heated seats much living here in the south but it irks me that a car that stickered for about $47,000 (I think) did not have them standard. My boss's 1999 GMC pickup has heated seats. My co-workers Accord has heated seats.... Bottom line I think at this price point Audi should just make the heated seats standard.
The other thing is this particular car's lack of voice response. Since it is only a $350 option I have no idea why every Audi A6 sold in the US does not come with it. I hope the previous poster is incorrect when he says a dealer cannot add after the fact. I will call a dealer tomorrow to double check.
My A6 lacks the tires monitoring and the sun screen options, which would add even more to the equation.
Voice response is NOT optional, it is a safety feature.
Reality is ahead of the law.
Thanks,
Jeannine Fallon
Corporate Communications
Edmunds.com