Chronic Car Buyers Anonymous (Archived)

breld

I thought I'd get some input from the folks here.

I do have my 530xi advertised for sale, and as I've said before, if I do sell it, I'll likely replace it with a smaller sports car.

I'm wondering if it may make sense to lease that car. I've never considered leasing a car before - always thought I wouldn't have the sense of real ownership. But the fact is, if I have the tendency to get that itch for something new within 2-3 years, and end up trading out around 3-4 years, is leasing a logical way to go (given that I'm OK with mileage limits, since it would be a second car)?

I understand the concept of leasing, but since I've never done it, I was hoping for some input from those here - what are the pitfalls, how do you negotiate a lease, how do you evaluate the deal?

boomchek

As a CCBA member, I love the concept of leasing. I miss it now that our company I work for (Chrysler) doesn't do it anymore. Otherwise I'd be in a new car every year or two.

It lets you get out of your current ride sooner and cheaper than if you were to buy and then sell on your own in many cases.

If you buy and finance a vehicle, you don't own it either (the bank does) until it's paid off. Think of leasing as just a different way of paying for something.

Also leasing is like having a set depreciation cost that won't change. Say you buy a $40k car, and in 3 years it'll be worth $15k-$25k; who knows until you get to that 3 year mark.

If you lease it, say at $500/month for 36 months, you end up paying $18k in payments (a figure that will never change), and your buyout will also stay unchanged, no matter what the vehicle is really worth. If it's worth less you walk away, if it's worth more, buy it and keep it or sell it.

That's the way I see it. A cheaper way of changing new cars often.

The only disadvantages are if you don't take care of your vehicles and they end up dirty inside and out with many scratches. Then you'll have to fix the damage or get penalized.

Negotiate a lease just like you would with a car purchase. The lower the overall price, the less your payments will be. Good luck.

jayrider

If you lease a high end car you put nothing down and pay the lease for 3 years. If you finance the same car and put nothing down your payments are considerably higher. That appeals to some folks and usually makes the most sense on cars with good lease numbers. High residuals and low money factors [interest rate]. Leasing is almost always more expensive than buying. The extra money translates into driving a new car every 3 years and never being out of warranty. Those are nice things for many of us but they don't come free. The difference however is usually not that much if you compare it to buying and trading every three years. Long term ownership is always better barring any recurring expensive repair bills down the road. Not as much fun imho

breld

Thanks for the postings and advice.

Jayrider - you state that "leasing is almost always more expensive than buying." I don't doubt that, 'cause obviously the dealer is making money, but what makes it more expensive?

Theoretically (and that's all it is), if the residual accurately represents what you could sell the car for at the of the lease term, and if the money factor is representative of a financing rate, then is it all a wash between leasing for, say, 3 years, versus buying and selling at the end of 3 years?

It's not that I want to get a car that I couldn't otherwise afford to purchase, I'm just trying to be realistic as to my turnaround time on cars. I think with every car I've purchased, I swear it will be a longer term car, but somehow that never pans out. The longest I've kept a car is five years. Someday maybe I'll have more will power, but there's no denying my track record.

Of course, the third option, other than buying new or leasing new, is to find a good deal on the used market. I imagine that's the best approach.

qbrozen

If you finance the same car and put nothing down your payments are considerably higher.

Well, its not quite so simple. It depends on many factors, not the least of which is how long the loan term is.

qbrozen

what makes it more expensive?

Theoretically (and that's all it is), if the residual accurately represents what you could sell the car for at the of the lease term, and if the money factor is representative of a financing rate, then is it all a wash between leasing for, say, 3 years, versus buying and selling at the end of 3 years?

Not quite. There are extra fees with leasing, typically, for one thing. A $595 bank fee up front and $595 disposal fee on the back makes quite a difference (for example).

There is the rare occassion where a lease is actually cheaper. I've been in 3 such situations. My Honda, my wife's Pacifica, and my BIL's Mazda. In each instance, the manufacturer just happened to be running a heavily incentivized lease. Interest rates in the range of 1%, high residuals, and no security deposit.

grandtotal

If you buy and finance a vehicle, you don't own it either (the bank does) until it's paid off.

You do own a financed vehicle. The bank may take a lien against it, but they do not own it.

jayrider

There are many ways to compare buying to leasing. I think edmunds has examples. There are inception fees in leasing that don't apply to purchases. A lot depends on the lease deal itself. If the mfr. is supporting the lease it can be a very attractive option. Unfortunately those are few and far between. Some cars are just bad leases -- that varies from time to time but a good lease will be one that is around 1% of the msrp -- 3 years 12k miles plus inceptions and taxes. You can go up to 1.2% and still be ok. BMW-Audi seem to be pretty decent because of high residuals. VW -Infinity MB can be good as well. But not across the board. Usually only certain models with specific options are highlighted. Example -- an MB C300 may be good and the E350 may be terrible. You have to do your homework and understand the numbers to do well. If you get decent terms than the difference may only be 1k or so in favor of buying but that means you need to get top dollar in trade or sell it yourself for over wholesale. If you swap every 3 years, leasing can be as economical as buying every 3 years IF you don't lease badly. And there are plenty of bad leases to be had. Some mfrs offer benefits if you lease another like car. Lots of stuff to consider. There are good/bad deals in leasing and buying so it is hard to be definitive without being specific. Go to ridewithg.com and check out the numbers and research there.

corvette

Manufacturer-subsidized leases appeal to me. The people who say that leasing "always" costs more are comparing it to buying one car and keeping it 5-10 years. If you would replace your car every 36 months anyway, a subsidized lease will end up costing you less than buying outright.

The disadvantage to a subsidized lease is that, if you really like the car and want to buy it at the end of the lease, the residual value (and thus the price you can buy the car for) is usually much higher than the car's value a the end of the lease.

boomchek

Ok technically you're right but for comparitive purposes you can't do much more with a financed vehicle that's not paid off than with a leased vehicle.

You have to pay off the balance in both cases if you'd like to sell it or you have to ask the bank for permission if you were to transfer titles or the lease to someone else.

breld

Can always count on this group to give some good advice. Thanks to everyone who commented. .

A lot of comes down to convenience I suppose - the thought of handing the keys over (assuming you're good on mileage and condition) at the end of 2-3 years seems really appealing, as opposed to selling or trading in - if you figure there's a good chance you're gonna do that anyway.

I drove a new Miata yesterday while my CX-9 was in service. That's what got me thinking. Oh, those routine service appointments can turn out to be so expensive. :P

tifighter

Over the years, Honda has had some great subsidized leases to clear out overstock. And since Hondas have good resale on the used market, the buy out is often times a better deal then what you'd find otherwise for the same car. Example: around here, Pilots are in the $21-23K range for the same year, trim level and miles as my car. My buyout at the end of the year is $16.5. If I walk away, I had great, subsidized payments over the past 3 years, and if I buy, I'm still feeling pretty good about the deal. I wonder if Acura is similar...never really tracked those.

Most leases ARE bad ones, but there are some good ones out there. Especially if you are flipping cars every 3 years anyhow...

jayrider

Don't even think about 2 year leases --- just thinking that last year audi had A4 cabriolet's for $399 zero down 3 year 36k. No down payment/bank fee/security deposit. That might have been nice. Eyes and ears open.

fezo

May be in the market though I really hope not.

Looks like my daughter may have drowned her 99 Camry. I'll know more in the next couple of days. If it's dead I may move the old Accord to her and get my wife something.

jayrider

If toyota's don't scare you the deals are pretty sweet.

fezo

I'm trying to figure out how to claim it unintentionally accelerated into the bay....

jayrider

I'm sure you have resources in Jersey to help with that scenario.

fezo

Nice dealership youse got there. Too bad if something was to happen to it.

jayrider

Exactly.

guss

Just don't let them getting away with using the line,
"Who's the U-Boat Commander? "

stickguy

Hey, Mr. V70 owner. JRL has a red one like yours but a stick in his stable (I assume you might have seen the ad). Any thoughts on that one?

For some reason I thought it was a no moonroof car (and to me, no moonroof = no sale). But, turns out it does have one. I even like the rather off color combo.

Looks/sounds clean, and a reliable source. If it is going begging, what do yo uthink is a fair price for it (especially if the alternative is paying to send it to auctions, where I don't see it pulling more than 5K)

fezo

Remind me. Who is JRL? Just in case I try to sneak it out from under you...

stickguy

sure, as soon as it is in bmy driveway. I have dibs anyway. QB already skated the last one out from under me (well, he found it, and looked at it, so I guess he did have dibs).

JRL is small dealer guy in PA that specializes in Volvos. He also does a nice business buying cars for people right from the auction.

fezo

This what happens when I start checking around for cars "for my wife."

01 325Ci

It is an automatic though....

jayrider

stickguy -- have you known anyone who got a car through him via auction? If so, are they generally happy or are there problems? Have 3 local dealers who do that but don't know anyone that used the service.

fezo

Not to comment on my own post, but.... why does a dealer give you the carfax link which shows that the thing was in an accident?

Wonder how decent that price is (even though it's not really a candidate)....

qbrozen

Yup. I've seen it. Wow. I was convinced it had no moonroof. And, yes, love the color. But HATE those wheels!

He's not far off with that new price reduction. I think $8k is the limit, though. You are spot on with your $5k auction number. Heck, with a handshaker, he may be pressed to even get that much. And, normally, $3k over wholesale is a big no-no from me, but I think I'd make an exception for Jim since I know he puts alot into reconning his cars.

Keep in mind, though, although the T-belt isn't technically due till 105k, I would do it ASAP (as I am on mine) as it is nearly 10 years old! And I just had to pop about $300 for plugs and coils on mine. The coils apparently have an 80k lifespan. I popped one, replaced, then popped another within 2 miles. So I just replaced all today.

And, I'll tell ya what. You ever lose your left leg, I'll do an even swap with ya for mine! Even with those wheels.

qbrozen

$11k??
Yikes!

10 years old and nearly 90k miles. Uh-Uh. Not at that price. I don't even know what fair is. It could be the going rate, for all I know. But I sure as hell wouldn't pay it.

qbrozen

Ya know you are going to make me really jealous, don't you? :surprise:

stickguy

will probably try and see it tomorrow. I actually work about 5 miles at most from his house, and not much farther from the office. So if anything ever was destinged..

Not sure what was done or not to this one. Usually there is an extensive list.

And I swear every picture with the shadows and stuff made it look like no moonroof. Only 1 way to tell for sure!

will be interesting to drive. haven't driven a stick volvo of that vintage in a long time.

The sheels wouldn't be my first choice, but they look OK to me. And the seats look even better!

certainly would have to budget a little more for maintenance, but shouldn't be too bad if it is well sorted out.

How much would a shop charge to do a T Belt anyway? No way I am doing it myself.

kyfdx

Not a terrible price, if you really want a convertible...

But...that would scare me..

qbrozen

hmmm... good question. Why not give a shop a call tomorrow? Try Pro Vovo in Freehold, NJ. Not where you would go, but would give you an idea of a private volvo specialist price. My guess would be $500-$600 for the t-belt, tensioner, and water pump (I'm thinking $200 parts and 4 hours @ ~$85/hr).

fezo

I swear it costs more to do that on a Honda!

stickguy - just saw that Volvo (well, pictures of it). I'm salivating. Better get moving...

qbrozen

I didn't send him the link, stickguy, I promise!

fez, I think it may be harder on a honda. It is pretty easy access on the volvo. Maybe the easiest I've ever done.

roadburner

How about a nice E30 like this 318i? http://www.bmwcca.org/classifieds/showproduct.php?product=6388&cat=11

Classic design, bulletproof motor, Sweet!

And if you want a six and a slushbox: http://www.bmwcca.org/classifieds/showproduct.php?product=6121&cat=11

Be aware that the M20 six in the E30 325i has a timing belt- although it isn't much more expensive to replace than on most other cars...

ghulet

......on both, and both are SOLD! $6295 seems like a helluva lot for a twenty year-old 318i convertible (I've been seeing mid-90s 325i/328i convertibles in the $5-6k range lately, though maybe not as nice).

My good friend (who is the original owner of a '95 325is stick) just told me he saw 'a car like mine' for sale (same color and everything) for sale for $3250 (a laughable price unless it's a 535i and fairly pristine). Turns out it was actually this thing, at least equally laughable (though it is a stick, and does have low miles), but I gotta wonder what 'in the process of cleaning it up' entails:

link title

roadburner

I'd take an E30 over an E36 most any day. But that's just me...

fezo

Those were fun but Mrs fezo would kill me....

Actually she doesn't complain but if I start talking about handing off the Celica to my daughter and getting something for me let us say that it gets very quiet suddenly.

Still no word from the insurance company so I stay in the Accent....

fezo

q - actually there is another wagon there that Mrs fezo could really like. Sadly for me but good for her it's an automatic. So far I'm not getting much reaction. I think she hasn't given up hope on the Camry surviving.

qbrozen

Is it the XC, by any chance?

fezo

Yeah, that would be it. What do you think?

stickguy

So fez, you being converted into the fold too?

FYI, I am going to check out the red sled tomorrow. If you are interested in either of the XCs he has, I can give it a quick look see. I like the 60K 2000 (tan one) better.

I never drove that vintage. Did drive a 2005 XC70 last year, but did not care for it. Found it to be a little soft and wallowy, probably as a result of tall SUV style tires, and jacked up suspension. A regular V70 (even AWD) drove much nicer.

i imagine the 5 speed T5 is going to be a blast.

My Accord I guess is quick enough, but not much power down low (especially with the AC on (which I rarely do, but more so as I get older), and/or have a few passengers.

But I really notice the difference when I drive my TL and have to accelerate quick from low speed. THe Volvo is probably even quicker than the TL, if I can keep the front wheels from spinning.

Hey Q, what did yours go for? Seem to remember it was a real strong price, but I expect the red one will have fewer needs.

stickguy

Torchlight has another 2001 wagon with a stick. But this is a strippo car. Cloth, manually adjusted seats.

What kind of sadist orders something like that?

qbrozen

$6800.
At the time of purchase, the apparent needs were the rear brakes and front spring mounts. I think that was it.

Hey, fez, what about a lease? Some decent deals right now. I see Honda is running a special on the Insight: $0 due at signing, $240/mo, 36 mos, 12k/yr. VW has some good ones, too. A Jetta for $179/mo with $1979 due at signing (so that should make it just about the same as the Inisight... ~$240/mo with $0 due).

qbrozen

I wouldn't have a problem with such a volvo ... if it were a turbo, which that one ain't.

qbrozen

speaking of torchlight, he does have some stuff that may interest you.
'04 S60 2.4 auto with 67k for $10k
'00 Legacy wagon with 84k for $6700
'05 CTS with 68k for $9k

Kinda diggin that Caddy. But the 2.8 is a negative. Not that I've ever driven one.

stickguy

at 7K, it is way more intriquing than at $8,500 (with some wiggle room).

If anything, shouldn't a stick be cheaper?

You did get a deal it seems, even if you had to pay a shop to take care of it's needs. Not that I know how much spring seats cost to have put in. Figure 1K for brakes, seats, and a T Belt service 9which I do not yet know if the Red wagon needs).

Maybe 8K with a full service isn't so bad for a 1 owner, known history car.

fezo

Keep 'em coming!

Stick - by all means take a look and tell me what you think.

On leases - I have never done one mostly because I think you're mostly losing money on such a thing and equally that I'm too paranoid that I'd get hit with a big payment when turning it in. this is somewhat related to having small kids yet. Those are tempting though. If I could get one with a low enough residual to buy it at the end...

qbrozen

that's the thing, too. You may remember my wagon has an accident in its history. If it had bodywork that I could find, I wouldn't have bought it, but since none of the metal seems to have been painted and the price was right, I bit anyway.

Yes, a manual WOULD be cheaper, if trading a joe schmoe dealer. But, as JRL is well aware, given his audience, the stick can actually be worth MORE because it is rare. Oh, and the 3rd row is kinda a big deal, too. If I'm not mistaken, the stick is about a $500 hit, but the 3rd row is like a $300 add. So they about cancel each other out.

Small kids? I was going to ask that. In that case, go with that XC. It has the integrated boosters. Gotta say I LOVE that feature on mine. My first son just fits now, so I'll get long use out of it. Having just 1 car seat taking up space makes a world of difference.

fezo

My small ones are 8 and can more or less be out of boosters but it we had those built in jobs they'd probably use them gladly.

Yeah, i noticed that third ow right away. That's a plus in my book.

stick - I had an old 69 Volvo 142 and have never quite lost the bug. We did have a bad one in the very early 90s but that was because I was careless about inspecting when bought.

I still will go checking out Mazdas as well.