Edmunds Members - Cars and Conversations (Archived)

abacomike

robr2 said:

I know "fit" is a very personal thing. The only dimension I can see where the E is bigger than the CTS is the shoulder room. Head and leg room are far better in the CTS. I'm guessing that's the area where you feel crowded.

Yes, Rob, shoulder room and the size of the seat bottom and width of seats (comfort).  Head room in the E 400 is not a problem nor is leg room.  Torque out of the V6 CTS is quite low compared to the V6 in the E 400.  Trunk space is another consideration.

I test drove a CTS V6 before I bought the E 400 and felt cramped - hip/shoulder and leg room.  Trunk was a bit smaller.  The E 400 has a curb weight of about 4200 lbs. the way mine is equipped compared to about 3800 lbs. for the CTS.  It seemed to sit better on highways than the CTS.

If the CTS had the comfort of the E 400 for me in the front seat coupled with the great visibility I have in the E, I would have definitely considered it.

ab348

I see the Mods have removed the 2 flags from @cdnpinhead 's post. Good move.

abacomike

ab348 said:

I see the Mods have removed the 2 flags from @cdnpinhead 's post. Good move.

Definitely.  I was flabbergasted when I saw the flags and now I am appreciative of the moderators' decision to reverse those flags.  Good going MODS!

Michaell

abacomike said:

ab348 said:

I see the Mods have removed the 2 flags from @cdnpinhead 's post. Good move.

Definitely.  I was flabbergasted when I saw the flags and now I am appreciative of the moderators' decision to reverse those flags.  Good going MODS!

We try to get it right ...

And I didn't realize the new CT6 was going to be quite so pricey.

I have a similar story ... the lease on my Hyundai expires next year, but I'm already thinking about what (if anything) will replace it.

Recently, I've been thinking that one of this new crop of baby CUV's might fit the bill. Small, economical, AWD. One of the new contenders is the soon-to-be-released Honda HR-V. So, I went to the Honda website and registered.

I got this in my in-box yesterday from the closest Honda dealer:

Thank you for your interest in the exciting new Honda HR-V Crossover. We at XXX Honda are getting very excited that the HR-V is almost here! We anticipate there being considerable interest in this flexible and fun addition to the Honda family.

Our allocation of vehicles has been released from the factory and we have over a dozen to choose from in the first wave! Let me know which model you are interested in and when you would like to schedule your test drive. We should see our first HR-V in time for the May 14, 2015 launch date so stay in touch.

If you have questions, please let me know as I am your point of contact here at XXX Honda. I will reach out as we get closer to seeing the HR-V.

My response:

Thank you for the notification of the inbound HR-Vs to your dealership. Unfortunately, I am in a lease until 11/2016 and won't be seriously shopping for a replacement vehicle until next fall. The HR-V is certainly on my list of vehicles to evaluate when that time comes, however. And, I'm hoping the initial wave of interest will have passed by then and that good deals may be more readily available.

I guess we'll see how much more contact I get from them ... now as well as when I get serious next year.

At this point, only the one email, unlike Mike who got 6 ...

driver100

Mike or anyone care to comment.

Daughter has a change to buy a 2015 GLK250 diesel with 9k miles on it.

MSRP is $52,975K (prices in Canada are about 20% higher)

Dealer will sell for $48,400k

Normally dealer gives 2% discount and extra 2% loyalty discount for repeat customers (4% is just over $2000)

They took 4% off ours, so it would seem they are allowing $2000 more off for it being a demonstrator and having 9000 miles on it. Dealers are conservative here, so no selling at or below invoice.

robr2

Regarding dealer e-mails - look for the unsubscribe button.

abacomike

driver100 said:

Mike or anyone care to comment. Daughter has a change to buy a 2015 GLK250 diesel with 9k miles on it. MSRP is $52,975K (prices in Canada are about 20% higher) Dealer will sell for $48,400k Normally dealer gives 2% discount and extra 2% loyalty discount for repeat customers (4% is just over $2000) They took 4% off ours, so it would seem they are allowing $2000 more off for it being a demonstrator and having 9000 miles on it. Dealers are conservative here, so no selling at or below invoice.

Driver, offer them $46400 for the vehicle.  Remember, new vehicles have about 8% profit.  On used vehicles (demos are still used vehicles) the profit is more like 12% because the factory allows additional mark-downs on "true" demos.  If they say "no", then I would walk - but expect them to catch you at the door before you walk out.  They need to unload demos even more than selling new cars.

driver100

abacomike said:

driver100 said:

Mike or anyone care to comment.

Daughter has a change to buy a 2015 GLK250 diesel with 9k miles on it.

MSRP is $52,975K (prices in Canada are about 20% higher)

Dealer will sell for $48,400k

Normally dealer gives 2% discount and extra 2% loyalty discount for repeat customers (4% is just over $2000)

They took 4% off ours, so it would seem they are allowing $2000 more off for it being a demonstrator and having 9000 miles on it. Dealers are conservative here, so no selling at or below invoice.

Driver, offer them $46400 for the vehicle.  Remember, new vehicles have about 8% profit.  On used vehicles (demos are still used vehicles) the profit is more like 12% because the factory allows additional mark-downs on "true" demos.  If they say "no", then I would walk - but expect them to catch you at the door before you walk out.  They need to unload demos even more than selling new cars.

Great answer Mike, that is a big help. I actually came up with the same number and thought if they really like the car to go to $47k

Basically though, the car has almost a years worth of driving on it, so, I would prefer a new car.....$53000 less 4% makes it about $51800, if they stick with $48400.

But, I like your thinking and you did mention the bigger discount for demonstrators and the 12% margin.
All great information.....you deserve to have at least one flag withdrawn.

houdini1

abacomike said:

ab348 said:

I see the Mods have removed the 2 flags from @cdnpinhead 's post. Good move.

Definitely.  I was flabbergasted when I saw the flags and now I am appreciative of the moderators' decision to reverse those flags.  Good going MODS!

Mike, your flag has also been removed.

fezo

OK, I'll bite. How do you see that a post is flagged? I don't see it.

Was in for what is likely a pinched nerve in my neck. Going conservative and just seeing if PT can do the trick. It did before and overall the neck is better than it was 10 years ago. We will see.

driver100

abacomike said:

driver100 said:

Mike or anyone care to comment.

Daughter has a change to buy a 2015 GLK250 diesel with 9k miles on it.

MSRP is $52,975K (prices in Canada are about 20% higher)

Dealer will sell for $48,400k

Normally dealer gives 2% discount and extra 2% loyalty discount for repeat customers (4% is just over $2000)

They took 4% off ours, so it would seem they are allowing $2000 more off for it being a demonstrator and having 9000 miles on it. Dealers are conservative here, so no selling at or below invoice.

Driver, offer them $46400 for the vehicle.  Remember, new vehicles have about 8% profit.  On used vehicles (demos are still used vehicles) the profit is more like 12% because the factory allows additional mark-downs on "true" demos.  If they say "no", then I would walk - but expect them to catch you at the door before you walk out.  They need to unload demos even more than selling new cars.


Now, I hear they are going to lease the car....not buy it.

So I changed the strategy a bit. They have an appointment at the dealers that was for 4:30, so I had to write fast.

I told them to get a lease rate for 1) the demonstrator at their discounted price, 2) the cost to lease at your price of $46400, and 3) cost to lease a brand new GLK. There may only be $10 or $20 a month difference.

driver100

A doctor friend sent this joke:

A Lexus mechanic was removing a cylinder head from the motor of a LS460 when he spotted a well-known cardiologist in his shop.


The cardiologist was there waiting for the service manager to come and take a look at his car when the mechanic shouted across the garage, "Hey Doc, want to take a look at this?"


The cardiologist, a bit surprised, walked over to where the mechanic was working.


The mechanic straightened up, wiped his hands on a rag and asked, "So Doc, look at this engine. I opened it's heart, took the valves out, repaired or replaced anything damaged, and then put everything back in, and when I finished, it worked just like new.


So how is it that I make $48,000 a year and you make $1.7M when you and I are doing basically the same work?


The cardiologist paused, leaned over, and then whispered to the mechanic.......




"Try doing it with the engine running."

explorerx4

Well...
I'm one of those who flagged that post and I think it was the right thing to do.
It made a pretty awful generalization, which I won't address directly.
I will say this, the father of one of my friends from high school was a Bataan Death March survivor and had a Japanese sword and army rifle displayed in his living room.
If anyone had a reason to be bitter and carry a grudge, it was him.
He was a talented carpenter, built his whole house including all cabinets and all the wood furniture in it.
His career was teaching woodworking.
What kind of car did he drive? A Honda Civic.
He was able to separate what actually happened to him in the past, to life later on.

abacomike

explorerx4 said:

Well... I'm one of those who flagged that post and I think it was the right thing to do. It made a pretty awful generalization, which I won't address directly. I will say this, the father of one of my friends from high school was a Bataan Death March survivor and had a Japanese sword and army rifle displayed in his living room. If anyone had a reason to be bitter and carry a grudge, it was him. He was a talented carpenter, built his whole house including all cabinets and all the wood furniture in it. His career was teaching woodworking. What kind of car did he drive? A Honda Civic. He was able to separate what actually happened to him in the past, to life later on.

Explorer, it took "frijoles" to espouse your inner-most feelings regarding that post.  You (as well as everyone of us) have the God-Given (and legal) right to voice your opinion and speak your mind, within "language" limitations.  Thanks for explaining your position - I personally appreciate your honesty.

abacomike

Good one, driver - even I snickered at the punchline!

abacomike

houdini1 said:

ab348 said:

I see the Mods have removed the 2 flags from @cdnpinhead 's post. Good move.

Definitely.  I was flabbergasted when I saw the flags and now I am appreciative of the moderators' decision to reverse those flags.  Good going MODS!

Mike, your flag has also been removed.

Hmmm, didn't know that.  Thanks MODS and thanks Dino for bringing that to my attention.

verdugo

ab348 said:

This was flagged TWICE?

I do not understand.

There is nothing here worthy of being flagged.

Mods: since only you can see who flagged this, I have a couple of suggestions. First, contact those 2 individuals and ask them why, Secondly, engage your developers to find a better way to report posts that are actually offensive or spammy rather than this, because it clearly is being misused.

Wow, who would flag that post? I really, really want to believe that it's somebody who is trying to give a Like or a LOL and they don't know how to use them.

abacomike

Verdugo, read back a few posts and you'll have your answer.  

driver100

explorerx4 said:

@driver100,
My accountant drives a 15 year old Civic. Perfect!

I wanted to go back to this observation. When I took my entrepeneur course they said it was important to drive a nice car, people will have more confidence in your ability, and they will want to be part of your success.

My brother was a stockbroker and he drove a 10 year old Civic and thought it was a good thing for business, it would show he was prudent, that he wasn't flashy, that he would be careful with their money.

He never made huge amounts unless he is hiding it, but he made a nice living, but, I think the guys with the fancier cars did a lot more business.

IMHO, I think there is a balance for a professional in accounting, stockbroker, financial consultant, buy a nce good car, the best you can comfortably afford, don't get too fancy, and that is the best course to take. Gives confidence without clients thinking you are scamming them.

driver100

explorerx4 said:

Well...
I'm one of those who flagged that post and I think it was the right thing to do.
It made a pretty awful generalization, which I won't address directly.
I will say this, the father of one of my friends from high school was a Bataan Death March survivor and had a Japanese sword and army rifle displayed in his living room.
If anyone had a reason to be bitter and carry a grudge, it was him.
He was a talented carpenter, built his whole house including all cabinets and all the wood furniture in it.
His career was teaching woodworking.
What kind of car did he drive? A Honda Civic.
He was able to separate what actually happened to him in the past, to life later on.

I give you credit for coming forward explorer, but, still don't know why it was flagged.....either you interpreted the post wrong or the rest of us did...except one other person I suppose.

abacomike

@driver100 said:

"I give you credit for coming forward explorer, but, still don't know why it was flagged.....either you interpreted the post wrong or the rest of us did...except one other person I suppose."

Driver, in this particular situation, perhaps it's best to leave this alone and move on to reports from you about your daughter's Mercedes experience!

driver100

abacomike said:

@driver100 said:

"I give you credit for coming forward explorer, but, still don't know why it was flagged.....either you interpreted the post wrong or the rest of us did...except one other person I suppose."

Driver, in this particular situation, perhaps it's best to leave this alone and move on to reports from you about your daughter's Mercedes experience!

Probably a good idea. She texted back that they have some numbers they have to go over...probably make some kind of decision by the end of the week. I am not so sure.......though it will be her car the SIL doesn't like to spend money for anything.

She's been all over the map on what she wants, first a Mercedes, then a Volvo, then not an SUV, etc. The dealer did a smart thing. She drives about 40 miles to work each day and 40 miles back. They told her to take the GLK to work, and ov course it road very nicely, much better than her 2004 X3.

I just gave them the info they asked for........and I thank you Mike, your knowledge was very helpful....they probably think I am a genius (knowing about 12% discounts and coming up with $46400).

abacomike

Whatever works, driver.  I don't know much about leasing in Canada because I don't know the money factor, the residual, the conversion rate from Canadian $ to U.S. $ or the fact that we are dealing with an untitled new vehicle with a year's worth of mileage in addition to the fact that the model is changing drastically for 2016, which significantly reduces its value.

bwia

 

Sorry, I was trying to respond to fezo's post on buying a CPO. Consumer Reports suggests that a buyer is better off buying a non-CPO; and for peace of mind, buy an extended service agreement. Nothing new here since a CPO cost almost as much as a new vehicle.

driver100

bwia said:

 

Sorry, I was trying to respond to fezo's post on buying a CPO. Consumer Reports suggests that a buyer is better off buying a non-CPO; and for peace of mind, buy an extended service agreement. Nothing new here since a CPO cost almost as much as a new vehicle.

What were the reasons given?

dino001

Don't CR shun extended warranties, in principle? At least that's the case for the appliances and electronics. I wonder if cars are different for them.

One reason of getting extended warranty vs. CPO is insurance in case of total. I have a friend, who totaled her CPO BMW and she had a hard time to recover that difference in cost (the loss was initially assessed based on non-CPO value). I think she finally got a concession from the insurance, but it took a while and I'm not sure how much. Extended warranty can be simply canceled with a refund on prorated basis.

However, an argument for CPO would be better perceived value in market place. But asking prices are sometimes simply insane and one constantly hears stories of certifications made by dealers without actual prescribed work being done.

roadburner

I've bought three BMW CPO cars and in each case I paid little-if any-more than I would have for an equivalent non-CPO used model. And if you do have a warranty issue, a CPO car makes the process transparent- no filing claims with a third party insurer or haggling over where to get the car repaired.

suydam

I'm usually a fan of CR but have to disagree with them here. I've bought both CPO and non-CPO vehicles. In general I haven't found them that much higher, except that they are in general better vehicles than non-CPO so in that sense are deserving of a somewhat higher price. You still have to have them checked out, just like any other used car.

roadburner

I've also found that the quality of CPO cars are highly dependent on the selling dealer. I've seen some dealers that offered CPOs that were just awful in terms of overall preparation.

abacomike

suydam said:

I'm usually a fan of CR but have to disagree with them here. I've bought both CPO and non-CPO vehicles. In general I haven't found them that much higher, except that they are in general better vehicles than non-CPO so in that sense are deserving of a somewhat higher price. You still have to have them checked out, just like any other used car.

As a former auto salesman and manager at a dealership, most, but no all, CPO vehicles are usually better vehicles than non-certified vehicles - but much depends on the auto manufacturer certifying the vehicle. Lexus, Mercedes, BMW, Audi, Infiniti, etc., have a big stake in the certification process because they are the ones that are backing the extended warranty and are deeply invested in maintaining the values of their pre-owned cars. Dealers spend about $2000-$2500 to have the manufacturer certify the vehicle. I always had a much easier time selling a CPO vehicle than one with the same mileage and production year that was not certified, even though the CPO vehicle was a couple of thousand dollars more.

Mercedes currently has no mileage restriction on many, if not all, of their CPO vehicles - just an age limitation (6-7 years from the inservice date). There are other manufacturers whose standards for certification are less stringent and thus certifying their vehicles is less costly for the dealership.

I am not saying that if you look hard, far and wide for a good pre-owned vehicle that is not certified that you won't find one or two. But, if you are looking for peace of mind, the CPO vehicle is the less worrysome, IMHO.

At the dealership where I was a manager, we did not certify that many of our pre-owned vehicles while I worked there, but I can tell you that our pre-owned sales levels were not very noteworthy. We sold tons of new cars, but we did end up wholesaling many of the trades we took in. Let me explain. Let's assume we took in a 2004 G35 Sedan in 2007 with 30,000 miles on the odometer. We would appraise the car at a figure that was close to Black-Book and Manheim Auction numbers assuming the car was clean with no paint or body damage issues. That was the figure we presented to the buyer as a trade value (with a small amount of wiggle room - say $500 - for an extra clean trade). If I were to have that car certified as a CPO, it would cost me $2000 for the certification + labor and parts I had to put into the trade to qualify for certification - remember, a certified mechanic has to go over the car piece by piece and that was a big cost to me internally. So now, I have a CPO 2004 G35 Sedan that is now $2500+ more than Black-Book or Manheim. So I now have to put it on my lot for at least $7000+ more than wholesale value (over what I would accept from a buyer, but you have to allow for some negotiation room, obviously).

Now let's assume I take in the same identical car with the same mileage, and I don't certify it. I now can sell that same car for $2500+ less than a CPO. Those who claim there is not much difference in price between a CPO and non-CPO vehicle are not taking into consideration what the dealer is making on the non-CPO. So, if I put both cars out on the lot and I sell the non-CPO G35 Sedan for $2000 less than the CPO vehicle, I am actually making more money on that car ($500+) than I would have made on the CPO.

I know it sounds confusing, but we always made out better selling non-CPO vehicles than when we sold CPO vehicles. And finally, remember that not all vehicles can be certified. The minimal requirements for certification can be tedious and very costly. It's not just the $2000 to certify the car, you also have to consider the cost of adding new tires, alignments, air filters, fuel filters, fan belts, leather repairs and refreshing, not to mention to big cost for labor to complete the certification process - many, many hours.

So, yes, I would rather have a stupendous non-CPO car than a CPO car for reasons of pricing. But finding that car can be tedious. So, either let the seller make a few thousand more on a non-CPO or spend a few thousand more on a CPO that comes with more "peace of mind."

stickguy

Mike, this also leads to the "just buy new instead" option, because I can recall seeing (and many others have mentioned) newer CPO cars listing at as much (heck, sometimes more) than TMV on a new one. Never made sense to me, unless the potential extra warranty period (if any, not always the case) was worth that much.

I figured it was just buyers outsmarting themselves, when they "knew" that used cars are a better value, so they never cross-shopped new.

why someone would buy a 30K mile 2012 when you could get a new 2015 for a few thousand more is beyond me. Though of course, it depends on the brand (Honda, crazy. MB? probably more depreciation).

abacomike

stickguy said:

Mike, this also leads to the "just buy new instead" option, because I can recall seeing (and many others have mentioned) newer CPO cars listing at as much (heck, sometimes more) than TMV on a new one. Never made sense to me, unless the potential extra warranty period (if any, not always the case) was worth that much. I figured it was just buyers outsmarting themselves, when they "knew" that used cars are a better value, so they never cross-shopped new. why someone would buy a 30K mile 2012 when you could get a new 2015 for a few thousand more is beyond me. Though of course, it depends on the brand (Honda, crazy. MB? probably more depreciation).

I agree with your analysis.  It must be remembered that the TMV price is already discounted while the price on the CPO or non-CPO vehicle has not been negotiated - just listed at what the dealer thinks it should sell at.  Once negotiated, the CPO will be much less, obviously.

roadburner

I bought our 2004 CPO X3(with 16k miles) in 2005 in for a bit less than the MSRP of a loaded 2005 Escape. That was a tough call...

stever

Trading in an ML 350 for a couple of luxo/sports rides and needs feedback. Sounds mostly legit, usual disclaimers. - TIA.

What cars should I buy?

driver100

stickguy said:

Mike, this also leads to the "just buy new instead" option, because I can recall seeing (and many others have mentioned) newer CPO cars listing at as much (heck, sometimes more) than TMV on a new one. Never made sense to me, unless the potential extra warranty period (if any, not always the case) was worth that much.

I figured it was just buyers outsmarting themselves, when they "knew" that used cars are a better value, so they never cross-shopped new.

why someone would buy a 30K mile 2012 when you could get a new 2015 for a few thousand more is beyond me. Though of course, it depends on the brand (Honda, crazy. MB? probably more depreciation).

I agree 100% stick and have thought the same. A friend just bought a demo 2015 A6. Just under 6k miles on it. Got it for $11k off MSRP and got them to throw in 6 year extended warranty worth about $4k. Took it with black interior though preferred light beige. In that case I think he did really well.

Daughter looking at GLK demo. 9k miles, MSRP $53k, dealer wants $48,400, could get 4% off new car making it $50,800 for a new car not so good. Works out if you take the demo to $2400 discount on a car that has 3/4s of a year of driving on it and that should be worth closer to $4k or $5k discount.

When talking CPO cars, I would pay the extra $2k to have the car ready to go, and have the peace of mind of knowing I will have a few years of trouble free driving.

nyccarguy

There are so many ways to look at new vs CPO:

Let's look at the aforementioned Infiniti Q40 (AKA G37 - formerly known as the G35):

A brand new 2015 Q40 AWD w/ Moonroof & Tech stickers for $40,755. TMV is $35,071 (I'm sure it can be had for less, but let's use this number for comparison purposes). Using the .0008 money factor and 53% residual value provided by our hosts on the "Q40 Lease Questions Board," I calculate a $415.56 per month lease payment for 39 months/12K miles per year. Add $1000 in inception/disposition fees adds another $26 (or so) to the total cost of the lease gives you about $441.56 per month. Total payments come to $17,220.84.

A very high volume Infiniti dealer close to my house has a CPO 2013 G37X with for sale with the moonroof & K on the odometertech packages. "List price" is $32,000 with a "Discount" (all their CPO cars have a discount listed) of $4000 gives you an asking price of $28,000. Let's say you can knock another $2K off that for $26K plus tax $1,651 @ 6.35% in beautiful Fairfield County, CT. Total cost is $27,651. I like to put as little down as possible when buying or leasing a car. With 15K miles and a CPO 100K warranty, I'd have no issues taking a 60 month loan out on the car which would come out to about $461 per month (I can't do interest calculations off the top of my head).

Here's where things get interesting:

After 39 months you turn the Q40 AWD back in to Infiniti & "walk away."
After 36 months of making payments you decide you want to trade it in on something different with $11,055 left on your loan. You've had to put at least 1 set of tires on it. Can you squeeze some equity out of it?

dino001

You need to add tax to your lease payment, $28. For the loan, assuming perfect credit, the interest may be something like 3-4% (used cars are a bit higher than new), unless there is a special running. Let's use 3.5%, the interest portion comes to average $40/m. So we get $470/m lease and $500/m loan.

5-year old clean Infiniti G37 (2010) with a few options and 60K miles and say 60K (assume existing mileage as 25K add lease allowance for 3 years), according to Mr. Edmunds, has value of $15K as trade, $16.5K as private. Due to interest amortization schedule, you'll own a little more than $11K after 3 years, but probably not much more. Say its more like $12K. So I think there is a good chance for some equity. General inflation in new car prices will push used cars up. The expected equity is probably 3-5 grand depending on condition, type of trade/sale and other circumstances. Do it multiple times (wash, repeat), I think it becomes real money. Make a loan shorter (quicker payoff, but perhaps a little better interest, less overall interest), keep the car for just one or two years longer and the cumulative difference shows up in tens of thousands for multiple repeats. There is some risk, of course. Scratch or dent the car, the equity goes down.

abacomike

nyccarguy said:

There are so many ways to look at new vs CPO: Let's look at the aforementioned Infiniti Q40 (AKA G37 - formerly known as the G35): A brand new 2015 Q40 AWD w/ Moonroof & Tech stickers for $40,755. TMV is $35,071 (I'm sure it can be had for less, but let's use this number for comparison purposes). Using the .0008 money factor and 53% residual value provided by our hosts on the "Q40 Lease Questions Board," I calculate a $415.56 per month lease payment for 39 months/12K miles per year. Add $1000 in inception/disposition fees adds another $26 (or so) to the total cost of the lease gives you about $441.56 per month. Total payments come to $17,220.84. A very high volume Infiniti dealer close to my house has a CPO 2013 G37X with for sale with the moonroof & K on the odometertech packages. "List price" is $32,000 with a "Discount" (all their CPO cars have a discount listed) of $4000 gives you an asking price of $28,000. Let's say you can knock another $2K off that for $26K plus tax $1,651 @ 6.35% in beautiful Fairfield County, CT. Total cost is $27,651. I like to put as little down as possible when buying or leasing a car. With 15K miles and a CPO 100K warranty, I'd have no issues taking a 60 month loan out on the car which would come out to about $461 per month (I can't do interest calculations off the top of my head). Here's where things get interesting: After 39 months you turn the Q40 AWD back in to Infiniti & "walk away." After 36 months of making payments you decide you want to trade it in on something different with $11,055 left on your loan. You've had to put at least 1 set of tires on it. Can you squeeze some equity out of it?

I would think you might be able to retain some equity in the car, but there are so many "uncontrollable" variables in your hypothetical scenario that decision-making re: new car lease vs. CPO purchase is more "guesswork" than dependable analytical rationalization.

An example of an "uncontrollable variable" includes auto accidents (loss of value to the CPO while in the lease scenario all you have to do is appropriately repair the vehicle with insurance proceeds with no loss of value to you, the lessee).  Another might be an unforeseen need to drive 15K or 18K miles a year for changes in lifestyle or the reduction in vehicles in the household - increasing the net cost of a leased vehicle.  Another variable could be more than expected depreciation based upon market conditions.

That is why it is often difficult to make long-term decisions regarding automobiles when compared to house purchases or other purchases.  

In your scenario, I'd opt for the CPO making my decision based on assumed fixed costs.  But, again, variables might make that decision unwise in the long run.  

All il I am trying to say here is that detailed analytical dissection of the two options does not take into consideration human nature - the desire to drive a nice car that is technologically current with great utility and appeal.  Over-analysis of this process can often backfire with unforeseen outcomes.

dino001

Mike, I believe those analyses work, but only when we make decisions for decades of repeat occurrences, in other words when our sample is bigger than one time. There may be a lot of circumstances swaying the calculus one way or another, based on your mentioned issues or events. However, from statistical point, certain patterns will emerge as financially better than others. If we want to be rational, we need to stick to what has highest chance, but it doesn't mean, of course that the outcome will be as predicted.

abacomike

dino001 said:

Mike, I believe those analyses work, but only when we make decisions for decades of repeat occurrences, in other words when our sample is bigger than one time. There may be a lot of circumstances swaying the calculus one way or another, based on your mentioned issues or events. However, from statistical point, certain patterns will emerge as financially better than others. If we want to be rational, we need to stick to what has highest chance, but it doesn't mean, of course that the outcome will be as predicted.

True.

driver100

dino001 said:

You need to add tax to your lease payment, $28. For the loan, assuming perfect credit, the interest may be something like 3-4% (used cars are a bit higher than new), unless there is a special running. Let's use 3.5%, the interest portion comes to average $40/m. So we get $470/m lease and $500/m loan.

5-year old clean Infiniti G37 (2010) with a few options and 60K miles and say 60K (assume existing mileage as 25K add lease allowance for 3 years), according to Mr. Edmunds, has value of $15K as trade, $16.5K as private. Due to interest amortization schedule, you'll own a little more than $11K after 3 years, but probably not much more. Say its more like $12K. So I think there is a good chance for some equity. General inflation in new car prices will push used cars up. The expected equity is probably 3-5 grand depending on condition, type of trade/sale and other circumstances. Do it multiple times (wash, repeat), I think it becomes real money. Make a loan shorter (quicker payoff, but perhaps a little better interest, less overall interest), keep the car for just one or two years longer and the cumulative difference shows up in tens of thousands for multiple repeats. There is some risk, of course. Scratch or dent the car, the equity goes down.

Good analysis guys....and good comparison.

I don't like numbers or thinking too much.

If you don't want to take on too much debt, buy the CPO car, you will pay it down and have some equity if you need a new car.

If you can afford it lease the new one, and then trade it in at the end of the lease or if you like it buy it back.

I like to keep things simple.

abacomike

Driver, I thought you were the one who espoused "The Driver Theory Of Buying A Car"?  The way you explained your analytical theory sure didn't sound simple to me!  From what I remember about it, there were also a lot of escape clauses.

driver100

abacomike said:

Driver, I thought you were the one who espoused "The Driver Theory Of Buying A Car"?  The way you explained your analytical theory sure didn't sound simple to me!  From what I remember about it, there were also a lot of escape clauses.

I base buying a car on a simple principle.......but it does vary depending on financial, lifestyle situation as well as factors such as what is important to you at the time, etc.

In retirement, I want a dependable, safe car, that will get me where I want to go in comfort. I like to keep a car only until the warranty is up.....if I loved my car after the warranty period, and there wasn't a car I was interested in, I would buy an extended warranty.

That being said, I have never had a budget in my life, even when I was making a very average wage. I use round numbers in my head.

I have calculated that driving an under warranty E400 or other fine car will cost me $2000 or $3000 more to drive than keeping a car for 5 or 6 years. Like I say, that's equal to a few cases of beer a week, a bottle of wine a day, one or two rounds of golf a week (tennis is much cheaper), cost of a top end cable plan, tickets to a baseball game once a week, seasons tickets, cost of losing $50 a week at the casino or track.

I prefer to have the reliability and ambiance of driving a new car over any of those things.

That's pretty simple.

If low cost was a factor, I'd be driving a 2 or 3 year old CPO car

The confusion may be because of the driver plan of amatorizing payments over time. Figure out the real cost by finding out what it costs to drive a car over 3 or 4 years, initial cost, less depreciation, less additional costs.

Does that help to explain a bit?

abacomike

Driver, I'm more confused now than I was before you posted your last comment!!!  

cdnpinhead

That's how it works.

Seeking logic where none exists is a fool's mission.

driver100

abacomike said:

Driver, I'm more confused now than I was before you posted your last comment!!!  

Do you mean amatorizing the cost of driving your car?

First example is the A4 Initial price paid was $45k. Value after 31/2 years was $28k. Cost of ownership $45k-28k =$17k +$1000 clutch = $18k divided by 3.5 years = $4,857 a year.

If I bought a $30k Fusion, and was trading it in, it would probably be worth (guessing) $14k after 3 1/2 years (less than 50% I am guessing), or $16k and would cost $16k divided by 3.5 years = $4,571.

The A4 will cost more because of financing $45k instead of $30k.

It sounds unbelievable to me, but that is the cost of owning that car, unless someone can show me where I went wrong. btw, I played a hard game of tennis and I am really tired.

*Show me where I went wrong, I don't believe those numbers myself.

stickguy

no, you make sense driver. Depreciation can be lower on a more expensive car (though on luxury ones, that is often the opposite). Flip side, higher interest costs, and a biggie, cash flow. Doesn't matter if your Ferrari will be worth exactly the same after 3 years, if you can't afford $2k/month in payments!

super low interest rates of course make the financing costs a much smaller part of the equation. Especially on leases, where it is practically "free money".

tommister2

I've probably mentioned this before, but after leasing 3 cars I decided it wasn't for me. Here in Virginia, we have title tax and personal property tax. In the early 90s I leased 2 Nissans because they had low money factors and NMAC paid the personal property tax. Well, NMAC got sued about it and had to stop. Folks in other states said they were subsidizing VA taxes. At least, that's what one sales guy told me.

What really turned me off was the last car I leased and then decided I wanted to buy it. I had to pay title tax again, plus the dealer charged me the processing fee again. Title tax was 3% at the time.

It also helps that I don't have to shop by monthly payment anymore...

abacomike

Driver, I don't think I exercise that much of my cerebral gifts when I buy a car.  Perhaps after being in the car business for 8 years it is easier for me to select, negotiate and buy a car because it comes more naturally to me after doing it so often.  Who knows?

Whatever you do to determine the car you want to drive may be a better way than what I do or consider.  As long as we are happy after the process is completed.

explorerx4

Let me start out with a doctor joke as told to me by one of my BIL's who is a doctor.
Question: What's the difference between God and a surgeon?
Answer: God knows he's not a surgeon.

About 4 months ago, I bought a 2013 CPO Escape SEL with 24k miles.
Did some research on the original msrp, just under 31.5k, figure 28.5k or so after discount and incentives.
I looked at a lot of them on the web and the one I ended up buying had the lowest mileage.
It also had one of the lowest asking prices and it was at a local dealer I have done business with on a regular basis.
It went into service in June 2013, so it had 17 months/12k mile of the original 3/36 B to B warranty left.
Because it was a CPO another 1yr/12k was added on, and the warranty was now basically 4years/48 k from new.
Powertrain warranty went from 5yr/60k to 7yr/100k.
It was listed for 23k, I paid 22k, plus got another 1500 for my old Explorer. I was a little flush with cash and I wanted in/out same day, so I just said we have a deal.
A defroster that put out more than lukewarm air sure came in handy this past winter.
Basically, there's a little wear and tear on it, but everyone who looks at it thinks it's new.