Stories from the Sales Frontlines

driver100

easy formatting (bold, italics, etc), and image uploading.

Easy image uploading! It never fails, when I finally learn how to do something the technology changes. (cry).

oldfarmer50

"...I thought we had a deal..."

So you were OK with my dealer fee? I have a note here on my 4 square that says: "customer pitched a fit over dealer fee...is grinding more than a machine shop..."

I thought you walked, honest!

stickguy

well, money talks and you know what walks, and I have been known to you know what on occasion, so I guess that was fair.

oldfarmer50

"...yours was in the top 5%..."

Now you tell me!

My car's drivetrain was in good shape (even the crossfire injection) but cosmetically it was er....challenged. Seats needed to be recovered, AC converted, paint wasn't bad but wasn't pristine. A lot of weather stripping needed replacement.

If the new owner just wants a nice week end fun car he can do it pretty cheap but if he wants a show car he'll have to spend bucks.

I was getting tired of waiting for the next thing to break.

jipster

"Sometimes saving money is not as important as just trying to make your life as stress free as possible. "

As a first time lessee of a 2012 Honda Civic, it's not as stress free as I thought it would be. Every little rock chip or scratch is a possible expense when your lease expires, and you have to turn the car in.

Honda allows 3 seperate incidents of damage to my vehicle, for a total of up to $1,500 they will forgive. A small scratch is about $500 to repair properly. So yeah, you have to worry about every little rock chip and stain. Ask my son how much I freak out if he enters the car with chocolate M&M fingers. Yeah... I had a ban on food and drink the first couple months, but that didn't work out.

I will have owned(borrowed) my Civic one year November 1st. I'm almost 1,000 miles over my allowance for the year. So, having to keep an eye on mileage, so I don't have a big mileage fee if/when I turn the car in.

At this point I'm about 50/50 on whether to turn in out buy out at end of lease. Been averaging about 40mpg, which is great. But... there is really no great joy or comfort in driving a Civic LX. Maybe I should have leased a beamer? :-)

driver100

Maybe I should have leased a beamer?

Well, the good thing is

*you are taking extra good care of your car.

*if you bought the car they would reduce the value any way for dents and scratches, this way you are more careful

*Less chance of M&M stains on the upholstery

*Easier to deduct for tax purposes - you need the car for business and most of the extra miles over the limit are deductable.

*With the money you saved from not needing a down payment you can invest in the stock market when it tanks in a few weeks from now

*If the dents add up you just buy the car back and sell it yourself or keep it.

Why did you go with a Civic if it isn't fun? You could have leased a Jetta or (even better) Golf. I assume you leased because you didn't want to put up a large downpayment but you needed a car - the lease solved your problem, maybe not perfect but it was your best option at the time.

snakeweasel

Leasing is nothing more than an alternate method of financing.

So is financing through a loan shark, but that doesn't mean it's a good way to do it.

and discussion about eating early depreciation has nothing to do with leasing or buying. That is really a discussion about how long to keep your car.

That's just the thing, overall cost of ownership increases with how frequent you change cars, leasing forces you to change cars very frequently.

snakeweasel

It's not always about money. It's sometimes whether you can afford it,

Oh the irony of that statement.

Your first example, the issue is that overall cost of ownership increases as you change cars more frequently, leases force you to change cars frequently. Now you say this guys life is less complected but how? He still has to go through the car buying experience every three years. Its been three years since I bought a car and it will be 5 or more years before I do again (Lord willing and the creek don't rise). That means that between my two purchases he will buy 2 or three times. Basically he is going through this three times as often as me.

Not to mention he has to worry about going over the allotted miles and any dings or scratches at the time of turning in the car.

Your second example without knowing your tax situation I really cannot comment on you but the majority of my clients that have their own business either see better tax results with outright ownership or its a wash.

as for your third example the kid will be buried with the extra miles. Sure he could buy extra miles at the beginning but I don't think anyone would go that high and if they did it would likely be in the same payment range as buying if not more so. So at turn in he would have a hefty payment to make at lease end for extra miles.

Of course he could buy it at lease end (which is the best thing to do if you are tens of thousands of miles over your limit) but every financial expert I know says that's the worst way to buy a car. He would have to finance more than the car is worth to buy out at lease end. Not to mention that if he would have bought the car he would have 2 years at most in car payments, now he will have 4 to 5 more years. In short he would have taken out an 8 year loan for the car.

He would have been better off getting a used car with say 40-60K on it. The car would be just as reliable and his payments would be low and he wouldn't have to worry about that big hit he is going to get at lease end.

driver100

That means that between my two purchases he will buy 2 or three times.

All he will do is turn in his car after 3 years, and drive out in another new car for 3 years. This particular person doesn't like the buying process of wheeling and dealing. He doesn't like being told his trade-in isn't worth much for various reasons the dealer gives him. He tried selling privately and the guy test drove his car and drove it in a rough fashion. He doesn't drive many miles so will just hand the car in and he will get a new one...no down time, no negotiating.

my clients that have their own business either see better tax results with outright ownership

As I said, in my case now I prefer to own my car and it actually works out better for me....write off 30% in the 1st year. However, if someone is starting a business, and they do their own taxes, it may be easier, just to claim the monthly cost as an expense......much easier to calculate.

And, you didn't reply to the part about using your downpayment money needed to buy a car - could be used to 1) invest in your business, or 2) use it to buy a house or property which may appreciate more, or 3) invest the money in say the stock market and make more than the difference in the lease cost.

He would have to finance more than the car is worth to buy out at lease end.

In the 3rd example, that isn't necessarily true. This person did not have the money to put down on a car, so he would have to borrow money to put down on a car. Buying a used car could be a gamble, he might choose a good car but he might get stuck with one that breaks down. Getting a car with 40-60K miles on it may work and may not...not good if he loses his job because he is always late or has to take the car in for servicing.

I have seen people try to save money by buying a used car or by plowing money into their present car...it would have been cheaper to bite the bullet, get a new car, and look after it.

Buying a used car may be the wisest choice for you and for most people, but, it isn't for every one.

bwia

snakeweasel you nailed it. That's what I was trying to say but you said it so much more beautifully and eloquently. Even *driver had the good sense to get off the lease treadmill.

jipster

Most common phrase parents of leased cars say to their kids,"Ahhhh... careful... It's not my car." "Don't throw the football around the Civic." and," I will never buy you an air soft gun."

Yeah, best option at the time was a lease. My Buick Regal had just started leaking oil, and had been ready for a new car for a couple years. I used the Regal trade in as a down payment, and got a $79 a month payment for 3 years. Have big tuition bills this year for the kids, so the lower monthly payment was quite attractive.

So the Civic was the best lease deal, in terms of total out expense.The gas mileage is great. But, I miss the luxury, power and comfort I had in my Buick.

Will not lease after Civic lease is up. Will either buy at residual value, or turn it in.

Having to keep an eye on mileage is a bit of a pain. Borrow mother in laws car from time to time so mileage doesn't get to high.Otherwise would probably be putting around 14-15k miles a year on it. It may all come down to a big ketchup stain the day before I turn lease in... who knows. You ever get ketchup or Grey Poupon stains in your beamer?

jayrider

Vettes always sell fast if they are priced fairly. You got about what the market said you should. You might have gotten more but it might have taken a few months --- not worth the hassle.

stickguy

BMWs come with vinyl seats. only cheap cars come with cloth, so stains are not such a big deal!

reminds me of a story. years ago, I was selling our Subaru wagon (so long ago, it was FWD!). Cloth insides. Private sale.

anyway, the morning of the day I was turning to over to the guy buying it, I had to pick my son up at kindergarten since he was not feeling well. Yup, you guessed it. he barfed all over the back seat. Good thing I was home that day, so I did a mad scramble to clean it up. And made sure the windows were down when I met the guy who was buying it...

snakeweasel

Semantics. from the buyers perspective, it is just another way of financing a purchase. and it does not have to be more expensive than buying a car. the key being, if you lease you lock in depreciation. With a buy and trade in after 36 months, you are at the mercy of the market.

That's just the thing, if you purchase you don't have to trade after 36 months you can keep it much longer. If you keep it much longer you can have a few years without any car payment. And the quality of cars now make getting 150K trouble free miles with few problems if any.

That's my biggest complaint about leases, it forces people to turn over cars way to fast.

snakeweasel

I did some quick calculations myself. If I would have leased instead of buying I would have spent 4-5K less in lease payments. However I would be halfway through my second 3 year lease, currently I only have 3 car payments left. So in 3 months by leasing I would have another 15 lease payments vs no more car payments. Then after that 15 months with the lease I would have to get another lease but now I will still have a paid off car that will have a few more reliable years left.

So over the 10 year period of car ownership I would have saved thousands buying rather than leasing.

stickguy

well, you don't have to turn it in if you don't want to. You can always pay the buyout and keep the car if you want to.

and the whole point is, there are plenty of people that are going to get a new car every 3 years or so anyway, and would never keep something to 10+ years and 150,000+ miles, no matter how you can make the #s look on a spreadsheet.

everyone's circumstances are different, and it is just not that black and white.

stickguy

also, people are buying something for the extra money. The experience of driving a much newer car most of that time. And yes, that is worth something to people. Same reason they buy BMWs instead of a Hyundai accent in the first place. Hey, you can still watch shows on an old CRT so it must be stupid to buy a new flat panel, right?

snakeweasel

This particular person doesn't like the buying process of wheeling and dealing.

So they don't do any dealing when they shop the lease? He doesn't deal on the price any deposits or upfront monies?

As for the other two examples, try some creative financing.

abacomike

So they don't do any dealing when they shop the lease? He doesn't deal on the price any deposits or upfront monies?

Back in the 1990's, I leased all my vehicles. My rationale had to do with being able to drive a new car every 27-39 months (depending on the lease term) at a monthly payment which was much less than buying that same car. I was also able to drive a more upscale car for much less.

Beginning in 2004, I found an outright purchase less expensive because I wanted a new car more often than a lease would permit me. The way I change cars would be impossible if I were to lease.

Thus, I am not a candidate for leasing and therefore purchase my cars.

But if things were different financially, there is no doubt that I would be forced into a position of leasing.

oldfarmer50

"...only cheap car's come with cloth..."

That's funny, I remember when vinyl was considered the cheap seat covering and cloth was the luxury option. Considering how vinyl would crack, leaving foam and sharp springs to poke your backside in the old days, I can see why.

stickguy

that, and the good old days when I had a bunch of domestic iron with black vinyl, and no AC.

nyccarguy

Part of the reason I do want to buy my next car as opposed to staying on the leasing hamster wheel is due to guys like snake & Mike who are much wiser than me in my 37 years. They know better and can most likely run financial circles around me;).

driver100

Even *driver had the good sense to get off the lease treadmill.

I think you spoke too soon bwia.

I would not say leasing is never the better way to go.

For one thing, I am living proof. I am 96% certain I couldn't have grown my business if I hadn't leased my 1995 Jeep. It was a great lease deal at the time, much better than the leases now, and they let me continue it for 2 additional years at a very low rate. But, even with today's leases, I would do it again in a minute.

I leased the Jeep for $316 a month in 95, and I was collecting unemployment insurance. That Jeep made it possible to create a business that did over $4million in sales a year, and employ 15 people. If you think saving $1000 a year was worth risking a used vehicle than you are not a risk taker or an entrepeneur.

driver100

.Otherwise would probably be putting around 14-15k miles a year on it.

Leasing was the best move for you at the time. The problem is not the leases fault. Two main problems;
1) you didn't have a reasonable idea of your mileage, you could have bought extra miles for a lot less before leasing, and
2) you tried to save a little too much by choosing a car based on price, not enjoyment value.

However, you won't come out of it too badly, at the worst you will buy the car back at the end and sell it privately and you still may come out ahead.

driver100

That's my biggest complaint about leases, it forces people to turn over cars way to fast.

3 years is too fast? You haven't met Mike.

Some of us like to get a new car every 2, 3 or 4 years.

Even if you keep your car for 150k miles, there will be some down time, some breakdowns.....it doesn't cost that much more to drive a newer car...the cost of a bottle of wine a day or a pack of cigarettes or 1 or 2 Starbucks lattes....just depends on your priorities.

driver100

. So in 3 months by leasing I would have another 15 lease payments vs no more car payments.

I don't think your figures are right....but, even if they are, you don't have a business you have to invest in or you don't invest in the market. If you took your downpayment money and invested it when the market was low you would have more than made up for your lease payments....and you would be driving a much newer car.

Not critisizing...just saying, what may be good for you isn't good for everyone. There are times when leasing is a better alternative.

driver100

Hey, you can still watch shows on an old CRT so it must be stupid to buy a new flat panel, right?

Why did I waste my time....you said it all, exactly.

driver100

So they don't do any dealing when they shop the lease? He doesn't deal on the price any deposits or upfront monies?

Nope, he just doesn't care. He thinks the price on his 3 year lease is fair, and he knows he will pay a bit more in 3 years to lease another car...big deal, he can handle the payments.

He has had very bad experiences negotiating a new car and getting a decent amount for his trade-in...this way it is all clear up front.......only one easy monthly payment to think about-he can enjoy playing tennis and taking his dog for a walk.

driver100

But if things were different financially, there is no doubt that I would be forced into a position of leasing.

Leasing was right for you at that time in your life. That's my only point - in most cases it is better to buy, but, there are times when leasing has advantages.

Saving money isn't always everyones priority....you earned your money and can get some enjoyment from it too.

driver100

staying on the leasing hamster wheel is due to guys like snake & Mike who are much wiser than me in my 37 years.

You may have made the right move for you at the time. Mike leased cars when it made sense for him to lease. There is no exact rule that buying is better than leasing...it depends on your situation.

abacomike

Part of the reason I do want to buy my next car as opposed to staying on the leasing hamster wheel is due to guys like snake & Mike who are much wiser than me in my 37 years. They know better and can most likely run financial circles around me;).

NYC, I think you are over-estimating my expertise in making sound financial decisions. People who make sound financial decisions don't buy new cars every year - cars are awful investments unless you buy them, restore them, then sell them for a couple of hundred thousand dollars on profit.

But when it comes to knowing how to buy a car and how much I should pay for it, that's another thing. Remember, I buy my cars for thousands below invoice thanks to fleet discounts like USAA and my membership in the MBCA. If I didn't buy them so cheaply and trade them above Manheim values, I certainly would not be buying cars every year.

But thanks for your vote of confidence, even though it is not deserved!

sterlingdog

"...,why look at another SUV?"

I think it is basically about style. In trading the convertible, I just don't see a car that appeals to me. I like square lines and the Pilot is pleasing to me. It and the FJ Cruiser by Toyota are the only two that I like. People complain about the visibility of the Cruiser, so that leaves the Pilot. I'm not in a hurry, so I'll keep looking for a bit. Thanks for the evaluation of the Pilot. It seems to earn good marks.

Richard

sterlingdog

If this transition by Edmunds is anything like the transition to the Affordable Care Act (Obamacare), we're all in trouble. I've been to two meetings and never heard such confusing information in my life. I read all of the half inch booklets from the companies, and comparisons are still difficult. One thing is for sure. We've got 30 days left to make our decisions. Such stress at my age---a sad state of affairs.

Richard

sterlingdog

"Every little rock chip or scratch is a possible expense when your lease expires..."

You are so correct. I've only leased one car---a Chevy Tahoe. Though we loved the vehicle, I worried about those chips and scratches. When we got a coffee stain on the carpet, I nearly had a stroke. Also, when I turned it in, they had promised me 83 cents a mile for the mileage that I didn't use. Therefore, I made sure to keep the vehicle under the limits. When the day came to give me my money, they refused. Dumb me. I took the finance guy's word but never had it in writing. This was before I came to Edmunds. Another negative was having to go to savings to get my down payment on the next car. I had nothing to trade. For me, never will lease again.

Richard

sterlingdog

They let you lease a new car and you were drawing unemployment insurance? That was one understanding, generous dealer.

Richard

snakeweasel

well, you don't have to turn it in if you don't want to. You can always pay the buyout and keep the car if you want to.

The problem with that is now you have longer car payments and you owe more on the car than if you would have just bought the car. That is the worst way to buy a car.

and the whole point is, there are plenty of people that are going to get a new car every 3 years

My whole point is that getting a new car every three years is a costly endeavor and really not needed theses days of highly reliable cars. Leasing forces you to do so and can get you into a cycle that could be hard to get out of.

snakeweasel

3 years is too fast? You haven't met Mike.

Just because people trade out faster doesn't mean that 3 years isn't to fast. There is an optimal trade out time for any car, where your overall cost increases if you keep the car for either a longer or shorter period of time. What it is I am not sure but it is longer than 3 years.

Some of us like to get a new car every 2, 3 or 4 years.

Fine and dandy but there is some sort of irony when you are talking about how to save money doing an activity that actually costs you more money.

Even if you keep your car for 150k miles, there will be some down time, some breakdowns

Last three cars I got rid of had approximately 160K, 180K and 170K and all the down time on all three was one day. Outside of normal routine scheduled maintenance I had one thing done on just one of those cars. Cars today are highly reliable and with care and routine maintence there is no reason not to get 150K or more trouble free miles.

snakeweasel

3 years is too fast? You haven't met Mike.

Just because people trade out faster doesn't mean that 3 years isn't to fast. There is an optimal trade out time for any car, where your overall cost increases if you keep the car for either a longer or shorter period of time. What it is I am not sure but it is longer than 3 years.

Some of us like to get a new car every 2, 3 or 4 years.

Fine and dandy but there is some sort of irony when you are talking about how to save money doing an activity that actually costs you more money.

Even if you keep your car for 150k miles, there will be some down time, some breakdowns

Last three cars I got rid of had approximately 160K, 180K and 170K and all the down time on all three was one day. Outside of normal routine scheduled maintenance I had one thing done on just one of those cars. Cars today are highly reliable and with care and routine maintence there is no reason not to get 150K or more trouble free miles.

snakeweasel

While my figures are merely estimates they are very close.

As for down-payments, those were minimal and investing it in the stock market would not have come close to covering the added costs that leasing would have been/would be over the time I will have this car.

driver100

They let you lease a new car and you were drawing unemployment insurance? That was one understanding, generous dealer

I had a pretty good job before I was downsized. My wife was working. We owned our home. Excellent payment history. Not really a problem.

driver100

Fine and dandy but there is some sort of irony when you are talking about how to save money doing an activity that actually costs you more money.

Nobody said leasing would always save you money. The statement made was "it was ALWAYS better to buy than to lease a car".

One thing I am saying is that I may know it is cheaper to buy than to lease (my last 5 cars were bought because I like to own, a leased car feels a bit like a rental car to me), in most cases, but, there is a time and place when leasing can be an advantage. Some people think "saving money" on a purchase should be their main goal in life. Sometimes you have to spend your hard earned money on something to get some kind of pleasure from it. I don't care if a new car lasts for 150K miles, I am not keeping a car for 10 years unless I really love it. I like to trade when the warranty is up. Your cars may go 160K miles....I know people who have paid over $4000 for computer repairs on their cars...buying a new car every 4 years is insurance against that happening.

I like the peace of mind of having a warranty and I like trading in my car while it is still worth something...then the difference isn't as great. Call it forced savings. If you run your car until it falls apart you will have to come up with a large downpayment, which means you had to run a reserve car fund, which is one worry I don't want to think about. I trade when the warranty is up, write a check for a new car, and have 4 years of worry free driving..and I have a car with the latest safety and comfort devices.

driver100

Richard...see below, it's the only way to do a picture.

driver100

I like square cars too. I liked my 2000 Jeep Cherokee because it was really square. The new one is a bit rounder, but squarer than most new cars today.


Or, the ultimate in square, a Mercedes G-Class;

driver100

Ultimate in square;
I'll try again..............................

driver100

G-Class;

mako1a

Some of us like to get a new car every 2, 3 or 4 years.

The only way I would lease is if I could turn it in within 6 months.

At my "station in life" where experiencing all the nuances in the latest

tech and yes, Driver feel of the road, I would like to drive everything

of interest and cost is not a problem. Three years is way too long.

driver100

The only way I would lease is if I could turn it in within 6 months.

I can't imagine why you couldn't get a 6 month lease. If that is the case, leasing would definitely be the way to go...you don't want to buy and sell every 6 months, unless you are Mike.

Not a bad way to go too, if you have the bucks then why care if your car will last 10 years and go 150K miles-another factor in favor of leasing.

Your tombstone can say, "He drove all the cars he ever wanted to drive".

mako1a

Ahhh, the perfect epitaph. My first would be the 2014 Corvette. I doubt they lease those, but hey you never know. Don't know if I can bend low enough to get in, but for a few months some ibuprofen might git er done.

oldfarmer50

"...your tombstone can say..."

My tombstone could never say that even if I live to be 200.

sterlingdog

I forgot that your wife was working at the time. That WOULD have made a difference.

Richard