Owe more than it's worth... I'm upside down and I can't get up!

british_rover

A little over a year ago Land Rover had this killer lease program for retail employees.

You could lease a 76,000 dollar Range Rover for 600 bucks a month including property tax and only about 850 bucks down.

It was insane but I didn't pull the trigger on it because I had just bought a house. One of my coworkers did though so he got a 68,000 dollar Range Rover Sport for about 580 bucks a month on a two year lease.

qbrozen

see, now here i thought car salespeople never needed their own car. you could just grab the keys to whatever was on the lot that caught your eye.

sebring95

It makes sense to have those programs for retail employees because they can bring some real world to the sales pitch. "hey I bought one last year, it's great".

I was actually toying with the idea of an HHR for a company vehicle and went to check it out. Drove down to the Chevy dealer in my Tundra and the salesman I met said "I love my tundra...." huh, sounds like a good sales pitch for a chevy... :confuse:

joel0622

In the good ole days I could drive what ever I wanted for a Demo. I was always in the top of the line model of what ever I chose.

Not any more I am just like everyone else who sends a check to FMCC every month.

british_rover

I have a demo but it is not a Range Rover. Only our centre manager gets whatever demo he wants everyone else is put in whatever the directors say to drive.

We are the only store that all gets demos in the autogroup.

It was sorely tempting but didn't make financial sense with the new house at all. Plus a Range Rover barely fits in my garage.

If Land Rover would ever get off their buts and offer a real employee lease on the LR2 I would take it but as of right now they don't.

roadburner

Let's see ... so far this radio show host's gems are that heavily subsidized leases are "fleeces" and that I should stick my credit cards in a blender and STOP getting 5% off all my purchases??

So I don't have my own show because I'm not savvy like that, huh? Oh well.

I don't agree with everything Dave Ramsey says either, but you need to remember that the lion's share of his advice is directed at the all too typical American consumer who can't abide the thought of delayed gratification and constantly spends more than he or she makes. They have a large first mortgage, an adjustable rate home equity loan(on which they only pay interest), several large credit card balances, and two car leases/loans-maybe a student loan as well. I heard a snippet from his show today; the caller and her husband make about $45K per year and they have a 2006 van on which they owe $22K
Dave's advice is simple, and it was he common wisdom not too long ago. He advises financing a home for no more than 15 years and saving up to buy big ticket items rather than financing them. He doesn't get too strident about credit cards if the balance is paid off every month, his concern is directed at those who always carry large balances on multiple cards.

I use a couple of Visas as convenience cards and I also get rebates for using them. I also take advantage of zero percent financing- but I pay the debt off before the interest rates kick in. The thing is, most people aren't parking their money in a mutual fund during the zero interest period- instead they are taking the money they "saved" and are spending it on some other quickly depreciating asset such as a boat or motorcycle. Before you know it, you your debt-equity ratio is in the toilet. And it happens to people that make $500K/year just like it happens to those who bring home $50K.

qbrozen

Oh sure. I understand plenty of people are in financial stress. I was just pointing out that blanket statements (ie, don't use credit cards and don't lease) are short-sighted. But I must admit that there are some people in my life who I wouldn't advise do alot of the juggling I feel I do to take advantage of low rates. I know they would just get in trouble.

roadburner

But I must admit that there are some people in my life who I wouldn't advise do alot of the juggling I feel I do to take advantage of low rates. I know they would just get in trouble.

My guess is that no more than 1 in 10 people actually make or save money by utilizing low/no interest rate loans or rebates. They use their "savings" to continue to live above their means.

lemko

I don't think one should simply not use credit cards. One just shouldn't keep a balance on them. Geeze, to rent a car or reserve a hotel room you need one.

jlawrence01

Personally, I have not seen any of these "great lease deals" that are "much cheaper" than ownership.

Personally cannot believe that ANYONE in the business couldn't head over to the auction and get a better deal ...

steine13

They are around, but rare.

Chrysler, for instance, discounts leases another $1,000 to $1,500 for returning lease customers.

At that point, a Jeep Liberty can be an awfully good deal. IF you wanted a Liberty in the first place. But it would often be cheaper than buying one and driving it for three years.

It happens occasionall with Mercedes', too. But it's all a case of "cheaper", not "cheap".

-Mathias

joel0622

Personally cannot believe that ANYONE in the business couldn't head over to the auction and get a better deal ...

If I chose to drive a used car instead I would buy a trade in instead of an auction car. They are less expensive. When you go to the auction there are 50 people bidding on the same car, when you trade it in there is one.

jlawrence01

At that point, a Jeep Liberty can be an awfully good deal. IF you wanted a Liberty in the first place. But it would often be cheaper than buying one and driving it for three years.

You ought to see some of the deals they are making to their corporate customers to move iron ...

They are hardly cheaper in MY book when you consider the poor fuel economy (16-17 mpg) on a vehicle that is as small as it is.

I will admit that they hold their value better than most Chrysler product.

im_brentwood

Terry,

Why on earth would you get a used truck from the sale when you can get a Vauxhall?

socalfem

I have a upside down loan and would like to sell my car by private sell, I hope I don't sound to stupid but, if I sell my car for less than the payoff how do I give the person the title...pay the difference myself ? I wanted to roll it over to the next loan with the car I'm looking to buy.. :shades:

cccompson

Yes, you pay the difference whether out of pocket or financed. This is yet another reason why so many cars are traded in to dealers.

blueiedgod

I have a upside down loan and would like to sell my car by private sell, I hope I don't sound to stupid but, if I sell my car for less than the payoff how do I give the person the title...pay the difference myself ? I wanted to roll it over to the next loan with the car I'm looking to buy..

It depends on the state. From your name it sounds like you are in CA. If you have your vehicle title on hand, it probably has a lien on it, so that next owner (if you were to sell it) can not legally register it at the DMV.

What you have to do, take whatever money the seller gives you, add to the pay off amount out of your own pocket. Send it all in to the comapny that financed you. Wait a week or two for them to lift the lien, then the new owner can register it at the DMV.

It will scare many buyers away, and you will have to lower the price. What you can do, is use your own savings to pay off the vehicle, then sell it. This will eliminate the hassles the buyer will have to go through, and will increase your chances of selling the car for what you want to sell it for.

qbrozen

I already pointed it out. Take a look at volvo's lease cash. Its really off the wall.

Personally cannot believe that ANYONE in the business couldn't head over to the auction and get a better deal ...

I'm not sure what this means. We're not talking about people in the biz or cars from auctions. If you are saying that buying USED beats leasing NEW, well yeah, I'm pretty sure I can't argue with that.

volvomax

Personally cannot believe that ANYONE in the business couldn't head over to the auction and get a better deal ...

1, most of us don't like driving beater cars.
2 Most of the time,a lease really works better.
I'm paying $562/mo to drive a $56000 S80 V8 on a 2 yr lease.
Thats $13,488 in lease payments.
a 2006 S80 2.5T,which isn't near as nice a car would cost me $23,000 at Manheim.
I'd have to pay for the whole car,plus taxes,figure $26,000 OTD.
If I sold it in 2 yrs it would probably be worth $15- $16000.
So, I'm out the $26,000 up front,it still costs me $10,000 to drive a car that isn't as nice.
Heck, I'll pay the extra $3000 to drive a MUCH nicer car.

british_rover

I can't agree more. I am just waiting for Land Rover to come out with a good retailer employee lease deal again.

If they don't do that by the spring I might get a C30 from our Volvo store.

151ranch

I received the C30 email from Volvo this week. It's ugly, but I still want it....even though my last Volvo did me wrong.

And to keep on topic, if I do get the C30, I will definitely be upside down. Volvos depreciate like Kias!

qbrozen

It's ugly, but I still want it

*scratch scratch*

rroyce10

**.. I will definitely be upside down. Volvos depreciate like Kias! ..**

And where might that be, Guam.?

2007 C70's are doing $35/$36,000 at the auctions (if you can em') and those are doing $38/$39ish on the retail side.

... even 04's are doing $19/$20 at the block and they'll get $23/$24,000 down Retail Rd -- ain't bad for a drop top that only sold for $35ish 4 years before...

Clean 04 S80's aren't much different, they'll do $15/$16 at the block and they'll get $19/$20 all day long street side -- and they didn't sell for much more than $32.



Terry. :shades:

british_rover

I would just like to say that nothing depreciates like a Kia.

johnnyvolvo07

Thats not True. Right now the 2008 C30's are holding 60% Residuals! Thats about as high as you can get.

johnnyvolvo07

How could you get a cheaper car at Manheim? Volvo has nearly 10,000 in lease cash on some of the 07's.

rroyce10

**.. I would just like to say that nothing depreciates like a Kia ..**

How does Mathias phrase that..?

... they drop like an anvil on Jupiter ..



Terry. :surprise:

tidester

they drop like an anvil on Jupiter

On the plus side, Jupiter has no solid surface! :P

tidester, host
SUVs and Smart Shopper

qbrozen

I agree with you. So you need to ask jlawrence.

qbrozen

That high on a new model? Huh. So how long is that for? And how many miles?

british_rover

Yeah you keep telling yourself that when you hit the lower atmosphere and get crushed to the size of a pin head by 10,000 times normal atmospheric pressure.

What is the 60% residual on? Is that a 15,000 mile a year lease? How many months?

johnnyvolvo07

That residual is for a 2008 Volvo C30 for 24 months and 12k per year. The other Volvo Cars are close to the 70% residual range. In fact Volvo 3 years ago had 2 of the highest reselling vehicles in the market and they have always had a great resell value.

kyfdx

60% after 2 years and 24K miles? For a new '08 model?

That might be good for a Volvo, but not so great compared to other Euro makes..

johnnyvolvo07

What car do you have? Volvo has some great incentives for the end of the year that can absorb alot of that. If you wait too long you will lose all of what they have to offer and you will end up paying more.

qbrozen

other Volvo Cars are close to the 70% residual range.

HUH? By what book? Is that after you knock off the trunk money or something? The 3-year S60 residual is in the 40%-50% range. I find it VERY hard to believe that balloons to 70% if you knock off a year.

british_rover

Agreed 60 percent isn't so great for a 24 month lease.

I have Range Rover Sport residuals at 66 percent for 24 months and 60 percent for 30 months and that is on a 15,000 mile lease on a 60,000 dollar plus car.

Real world wise they do a point or two better at least in my experience.

johnnyvolvo07

Volvo U.S. Third Quarter Lease Residuals for 2008 Model Year (15,000 miles per year leases)

C30 24- 67% 36- 56% 48-54%
C70 24- 63% 36- 53% 48- 43%
s40 24-66% 36- 55% 48- 46%
s60 24- 61% 36- 53% 48- 43%
s80 24- 72% 36- 59% 48- 45%
should I keep going? Thats only volvo. Add 1% for 12k add 2% for 10k.
Americredit goes up about 3% - 5%
US Bank goes up 1% - 2%

US Bank Residual Value Guide New Models Sept. - Oct. guide
2008 models

Land Rover
Range Rover Sport
15,000 mile p year leases

36- 53% 48- 42%
add 1% for 12k

joel0622

Who gives a flip what US Bank says. Its the manufactures residual that has bearing on the whole thing. They are the ones that are going to be putting the majority of the leases on the road

johnnyvolvo07

Actually with the better residuals that other banks are doing now and sometimes even the money factors I would say 90% of the leases are going through the larger banks becausee its does lower your payment.

joel0622

Really, in the whole industry or just the place you work?

johnnyvolvo07

no of course just in this market, california. Im not sure what other regions are doing. you have to also remember that Land rover and Volvo use the same bank for their financing which is Ford Motor Credit. Who is good for low credit score consumers but not competitive when it comes to leases or consumers with high scores.

british_rover

Doesn't look like we will be using FoMo Credit for too much longer.

Probably only a month or two at the most.

johnnyvolvo07

Yeah that will be a nice change. I look forward to that Im tired of telling people with 740+ scores their rate is 8% or more .... ouch!

PF_Flyer

OK, so it almost turned into a rant :P but during my travels yesterday the subject of upside-down came up and it turned in the latest installment of the Alternate Route

Your comments are welcome!

fezo

Sneakers is on his soapbox.... :P

G;ad to see it but I'm not waiting for the world to see the light...

steine13

You do NOT want the world to see the light.

You want these guys to keep the economy going. Everybody being conscientious about saving money and getting ready for retirement is great individually, but can become a problem overall. Just ask the Japanese...

Heck, when I'm retired, I hope there are people who want or need my money and do stuff for me.
-Mathias

qbrozen

Are any of those vehicles available RIGHT NOW?

And why are the '07s so incredibly low? And have been for quite some time now? I guess maybe it makes sense until volvo puts $10k in the trunk, thereby dropping the residual in the toilet.

johnnyvolvo07

Most are availble now and on the lot. If not yet, it will be in the next month or so. The reason 07's are so low on some of the models is because of the redesigns they have done from the ground up. Others like the XC90 and S60 residuals are the same 08 and 07 because there has been no major changes. The new body styles made the 07's drop about 10% just in the last 2 months.

rroyce10

**.. And why are the '07s so incredibly low? ..**

Some manufacturers use rebates, some use cheap $$, some use both, some have unit bonuses like Hyundai/Kia .... Volvo, like Bimmer, and Benz have used trunk money for as long as I can remember (1983) Infiniti used it on the last of the I35's, now they're worth almost what they were doing 4 years ago - go figure ...

Personally, I like the idea of an end of the year cash benefit (trunk money) ... it doesn't damage the resale like the other methods.





Terry :surprise:

qbrozen

Others like the XC90 and S60 residuals are the same 08 and 07 because there has been no major changes.

well now I'm thoroughly confused because all the quotes I've been seeing in the S60 leasing forum over the past couple of months come with about a 40% residual. So that's a far cry from the 53% you've quoted above. With the $10k in trunk money, a 53% residual would make this car ridiculously cheap and I'd be at the dealer right now, but the 40% residuals are a whole different story.