jnc2000

Yes I mean cars

Here's my dilemma I'm hoping you guys can lend some too...

I typically switch cars ever 18-24 months. I never hold on to my vehicles long.

Case point the my 3G TL lasted me 21 months exactly. My problem lies in I rack miles a bit more then the average consumer (~30k-40k) a year or so.

I get bored with cars - I see something I want, and I can justify the purchase so I jump. Financially not the best decision through life... but while I'm young, I figure why not.

So I'm back looking shopping at cars again... Part of me feels I should be leasing both vehicles for the wife and I instead of purchasing and then trading back in a practically new vehicle with slightly higher mileage.

The wife's car get's driven maybe 3k miles a year if that. (she's a homemaker) Mine gets the brunt of the driving. So by leasing 2 cars and alternating the driving between both of them I could avoid racking up too many miles on one and hardly any on the other.

...Thoughts..?

jnc2000

Mods ->> Move to Car Talk please

chill_dog

Don't swap out the wife's car that often (try 5 to 7 years); buy new or CPO when you do. Buy your car as a CPO (30k or less miles), drive it for 2 years, and sell it. You'll always be under warranty, you'll always have something of some value to be able to sell/trade, and you'll minimize your financial hit (missing a year or two of depreciation, having a warranty, having something to trade in two years, no fees for being over your mileage, etc.).

black label

Leasing is a good bet for the extreme high mileage folks. If you are going to put 90-120K on a car in 3 years you will absolutely kill it's resale/trade value. If you want to purchase a new car, finance for 5 years then trade it in in 3 you will be upside down in your loan unless you made a substantial down payment.

Leasing a car with a 30K per year mileage allotment will be more expensive than the advertised lease (typically 10K per year) but you know what your cost will be over the next 3 years and there is no chance to be upside down in the loan as in 3 years you can just give it back.

Buying it, paying it off and keeping it is always the best bet but it sounds like you can't pull that off so leasing is a better alternative if you want something new more frequently.

Buying instead of leasing because you want to have something to trade in is not beneficial if your trade is worse less than you owe. It can also cost more to finance the car and trade it in before it is paid off then it is to lease it for 3 years.

jnc2000

Exactly my point. I don't intend to buy to trade in to use it as a down payment / benifit. I'm not looking to buy and keep a vehical. What I'm mainly looking at is do I buy a CPO sedan / CUV for the wife and lease my vehical... or lease two vehicals and alternate between driving them (givin 20k year driving allowances.

We have a house, a newborn and our financial situation is setup proper. I've got a nice 401k plan at work I'm growing out, and have been since I was 18... I have other assets within the markets but right now they're stagnate.

Really my main purpose of a vehicle is a commuting (between Ohio and Pittsburgh) and weekend back road fun...

The wife doesn't want nor desire anything I want in a vehical, so she's easier to shop for...

However, I'm a bit more picky.

1. Sport Sedan
2. Proper Lux features
3. AWD capabilties.

I make my list, then let the wife narrow it down. I guess right now I'm just torn between a couple of cars... Mainly the S4 / CPO... 535xi.. m37x... xf supercharged to name a few. But what I like, the wife doesn't like.

The wife just needs a FWD CUV / Sedan. ??

Price stays under 15% GAI so call it $900-950.

Suggestions?

Street Spirit

Buy your wife's vehicle and don't get rid of it in until it dies. Literally. She rarely drives it, why keep getting rid of it when it should last her a long, long time as long as it is well maintained. Pay hers off and enjoy it until you absolutely need to replace it wayyy down the road.

EDIT: Does she already have a vehicle in good shape with low miles that you plan on getting rid of? If so, why?

Never Summer

This is the way to go I would think. Seems much more financially viable to me.

NJ SHAWD

I go through this all of the time. Leasing will kill you because of the mileage overage. Even if you pay for extra miles up front, you still end up paying more overall.
The goal is to buy right, and sell off before 50K miles. Rule of thumb is you will take a hit on the trade, but with low monthly payments the overall expense isn't too bad. It didn't seem to matter what car I was turning in, I usually would be about 3k upside down. Throw 2K as a down payment, and stretch the term out to 60 or 72 months (which keeps your payment low during the term). There's a lot more to it...PM me if you want more details.

Crazy Bimmer

Agreed.

Buy the S4 over the 535xi or M37.. better chance of you not getting bored with it. Ask me how i know...

Just dont buy the V8 version, its a pig when it comes to fuel consumption.

jnc2000

The wife wants a new car... well, because she wants one. We bought her's cash in 2008 and its been that way since... but since 2008, I've had three vehicles and she wants a new one because its "her turn".

Myself, I love the Ridgeline - it's just not the vehical I want right now. It served me well last year driving through the hills of WV and PA and it's unstoppable in the winter... but as a 2010 I've already put almost 30k miles on it.

I want a vehicle that will be comfortable for long rides, I can take clients and colleges out in but at the same time have fun out on the backroads...

If my wife must have a new car my vote for her is the new Hyundai Sonata SE... I like the suspension setup in the SE trim, and it's big enough for her the car seat and the stroller.

NJ SHAWD -- I know I'm going to take a hit when I trade but I'm trying to minimize that as much as possible. I owe less the what the Ridgeline is worth so I'm not worried about that at this point... Just trying be as fiscally savvy about this as possible while at the same time getting what I want.

Aman

Have you considered a beater for your high mileage commuting? Get an old GM or Volvo that's fuel efficient, and you keep your nice car to drive every once in a while. Keeps the mileage lower and you don't get bored as quickly.

That being said, maybe having a special high-mileage lease is still cheaper than buying and selling every few years. Assuming you own each of your cars for 2 years, depreciation on new cars takes the biggest hit then, within the first few years. You're looking at probably 10Gs, if not more on depreciation. See what lease numbers you can work out with a dealer, and if it'll help you any.

Best of luck

jnc2000

I would except when I got out to meetings with vendors, or offsite meetings spur of the moment lunch deals we often just take my car and go... Jumping into an Aveo doesn't leave me with any warm and fuzzys :P

I'm not worried about fuel efficiency. Figure I'm I'm spending at least $5k a year in fuel costs alone right now... If I save a few sure that would be dandy... but fuel cost is bound to go up over the next couple of years... So even If I go from a 20mpg car to a 30mpg car I'm not going to gain all that much.

Crazy Bimmer

Lets be honest here, you already have the idea of leasing two cars in your head.

Will anything we say actually change that?

<--- ex addict.

Name a few of the cars you had. My bet is nothing was all that special. TL and Ridgeline? No wonder you getting bored so fast. Jump into a M5, CTSV, S4, M3 etc and enjoy it!

Get some snow tires for winter, no need for AWD.

Aman

What if we flipped it? DD is your nice luxury car, beater is your fun weekend toy. Maybe a Z car, or an MR2?

jnc2000

I was thinking S4 DD toy as a Z or S2000.... That poses an interesting option.

jnc2000

Yes, RWD with snow tires is more desirable then AWD...

AWD through gives you that extra edge in the Burgh hills

I have leasing in my head... But, I'm not opposed to other options. As NJ SHAWD states in his epic thread leasing ties you down. You have a contract with a set beginning and end and you know your in it till then. If you want to get out earlier then then its much harder.

And lets face it, whatever car I do get I'll most likely be modding lightly as well.

Aman

There are websites where you can pass on your lease to someone else. Check out leasebusters.com.

black label

This is a misconception. There is a set beginning and end to a finance contract as well with a much larger monetary commitment. Put less than $3000 down on any of the vehicles you are interested in, then try to get out of them in 2 years with 40K on them and you will owe more than they are worth.

NJ SHAWD

I must be the exception to the rule. You WILL pay more to get out of a lease early compared to the right buy up front, and the right trade out.

OP, whatever car you are looking for can be had. Even if you wait for a model year end, leftover, or a pre-owned with 3k or 4k miles. This will lessen the blow if you are that upside down. You may have to make concessions to get out easy, but do what you have to do to make it work.

nspec_ya4

iTrader: (38)

Imo, stay away from payments. Save up enough to pick up a cpo cash, put some miles on it and then sell it before u rack up the miles, then use the cash plus a little extra to buy the next one.

Also be very smart when trading in and buying, do all ur homework, find out what the cars are worth before u even walk in to the dealership.

I do work for lots of dealerships and let me tell u, they make the most money on trade ins.
When the see that the customer is really interested in the new car, they will reduce the profit on the new car to sell it, but hit you up on the trade in.

Crazy Bimmer

Nothing wrong with payments these days. Some of these companies are offering 1.9% on CPO, its better to borrow their money than tying up your own cash. IMO

black label

OP drives 30-40K per year. If he bought a 1 year old CPO with 12K on it for cash, it would have 40-50K on it in one year. How much do you think his 2 year old car will be worth at that point? He's going to get hammered on the trade value because it is a high mileage car and is much less desirable in the retail market.

The OP destroys any cars value with the mileage he puts on it. Would you rather destroy the value of something you own, or something you rent?

Lets say he gets into an accident and does $5000 in damage to it. If he owns the car his insurance will cover it and he will own a car that has lost more value because it has been in an accident. If he is leasing it, the insurance company still pays for the repairs, but the fact that the car has been in an accident (further depreciating it) won't concern him, it's not his car he's renting it, in 3 years it goes back.

Personally, I'm all about buying CPO but I buy a car, pay it off and keep it for an extended period after I have the title in hand. The OP has confessed that he can't do that, that coupled with the high miles he drives, he is a good candidate for leasing.

jnc2000

Ok question.... Most dealers have their (manufacture financing) leasing companies and THEY know and set the terms... sure you can negotiate, but is there somewhere I can shop for a leasing company beforehand? Approach bank xyz and state I want to lease car X and I intend on putting 30k a year on it.

jchan2

Sure. I'm fairly certain most banks (Bank of America, Chase, Fifth Third, etc) will write you a leasing contract. Just let them know the make, model, and year of what you're considering, how many miles you're throwing on the car annually, how long you want to lease the car, and a few other bits of info and they should be able to spit you out a monthly lease payment.

Chances are their rates won't be as low as the manufacturer's captive financing company and their special lease deals, but if you're throwing 30-40K per year on a car, those special $270/month with $0 down and $0 due at signing deals are not going to work for you.

Personally, though, I would see what the payments would be like for a 30K/year lease for 2 years. I would venture to bet that the payments wouldn't be too far off from a conventional 36 mo. loan at the manufacturer's special interest rate, though I could be wrong. Plus by financing at 36 mo. you will get the low rate (1.9% at Honda typically, 0% at some other automakers, like Infiniti).

I'd buy something that resales well (Acura TSX, Infiniti G37, BMW 5-Series), take the 0/1.9/2.9% APR special financing, finance at 36 months, and trade every 24 months. You shouldn't be upside down with only a year to go on a 3 year loan even with 0 down (assuming you picked a car that resales well) and this way you aren't worried about mileage limits or excess wear and tear.

My parents on their last two cars (an Infiniti I35 and a Nissan Altima) did the special APR (1.9% on each car) for 36 months, put 0 down, and just paid the monthly payments. Neither car was upside down for long, if at all (certainly less than 12 months), and they didn't have to worry about mileage overages. They are slightly different in that they like to keep their cars to 120K miles plus, but the strategy might work even for a more frequent trader.