saturno_v

I consider myself a fairly good car buyer. I always pay well below invoice regardless of brand, I have patience and I know when and where to buy. I usually always get more than KBB trade-in value for my old cars or I sell them privately.

I did never lease a car but I know how the game is played in that sandbox as well....you still negotiate the price as if it were an outright buy and you never put any money down on a lease (it is lost anyway, you will never have any equity in the car), just pick a monthly payment you are comfortable with for the joy and peace of mind of having always a new car and wrap everything into it.

Still, I'm baffled at some people that change cars extremely often, repeatedly...every six months or one year.....I did every possible calculation and play any scenario but I cannot see any of them not involving a massive loss of equity in trading so soon...depreciation it's just a killer initially...

So are these people happily wrap losses after losses (or always put down more money) into new car payments?? There are 6 months or one year leases in place?? What is the penalty to get out of a lease contract early??

I got the itch of trading up one of my cars (bought one year ago) but doing it would imply a significant loss so I will not do it....still curious about people that seem to be able to do it so often....and I'm talking about ordinary folks not business owners that may have some special commercial short-term lease agreements.

ucf_bronco

iTrader: (1)

Even better, the people who get a 'new' car and spend thousands of dollars modding it...only to part it out and move on to a different car a short time later. I always wonder if they are horrible at managing their money, or just have enough so they don't really have to. It's a question I'll never ask (and would never get a straight answer anyway) but it's always on my mind when I see those cases.

I had my last car for six years, and just reached four years with the TL. I plan to keep it as long as I can since I love it more now that I did when I drove it home, and because it's the financially responsible thing to do.

juniorbean

iTrader: (5)

<p>Most of the time when I've done it I usually either break even or come close to it. &nbsp;They are typically &quot;weekend&quot; cars so I'll wait to find a good deal, then buy it. &nbsp;Drive it for a year or so and typically sell it for what I paid for it. &nbsp;The biggest hit I took was the Porsche which cost me about $3k for ~15 months of ownership. &nbsp;Still, when dealing with a weekend car I'm using &quot;disposable&quot; money so I really don't care about that $3k. &nbsp;If I did I would never have bought it in the first place.<br /><br />Now, people who buy new and do this a lot are a different story. &nbsp;I don't do that so can't help you there </p><p>But cars, for the most part, are a depreciating asset... so it's a losing proposition regardless. &nbsp;I guess when making a decision you just need to decide how much you're willing to risk losing by selling and buying something else and if it's worth it. For some people it may be worth a few thousand to be happier in the long run. &nbsp;In the end it's their money and they can spend it however they'd like,&nbsp;so I say more power to them...</p><p>&nbsp;</p>

CLtotheTL32

iTrader: (3)

It's amazing what financial decisions some people make. We just had a RC350 traded in with only 391 miles on it Talk about losing your ass...

00TL-P3.2

Reminds me when I worked at a local Chevrolet dealer when I was in college.
Guy traded in an '08 Z06 with 722 miles on it for a Duramax 3500 long bed crew cab. Talk about opposite ends of the spectrum.

CLtotheTL32

iTrader: (3)

Yep, I've seen that before too! Earlier this year we had a 2009 GT-R traded in for a 2012 RX350

JS + XES

iTrader: (1)

OP, maybe some people don't care how much $$$ you lose by changing cars often.

ucf_bronco

iTrader: (1)

I appreciate this type of person, because then people like me can get a great deal on a gently used car. I bought the TL with just under 9k miles on the odometer. Hell since it was CPO I had a longer warranty than if I had bought new!

My brother is my polar opposite. He's eight years older than me but he's owned probably 40 cars over the years (compared to my five). I know at least eight of those were Mustangs.

SuperTrooper169

iTrader: (2)

It's obviously going to be a much bigger issue if you're trading in that often on new cars vs. pre-owned. I had a problem with trading my cars in every year or so but it was on pre-owned cars that already had the biggest hit on loss of value being driven off the lot when new, so for me I would usually roll the negative equity into the new loan, one time even extending my term to 6 years in order to make my payment doable. I eventually grew up and realized I was being stupid and haven't gone down that road in 2 1/2 years and now am only a month or two away from having my car paid off, 2 1/2 years early. So to answer your questions, yes, people that do that with new cars or even pre-owned are terrible money managers and will eventually figure it out and live with a car for longer or they'll eventually get in so far over their head that they'll lose the car to the bank.

carz0159

I got out of a car I've had for a year via lemon law. Only cost me $1600 to drive a $32,000 Chrysler 200 for 1 year (although it was basically undrivable for 5 months and change (5500 miles in the first 6 months, 1500 in the last 6) It was a lot of headache and effort to get rid of though. Would not recommend, FCA sucks ass!

Flipster23

iTrader: (15)

<p></p><p>&nbsp;</p><p>Someone must have had a kid, or something along those lines....</p>

black label

You never know. I had a very low miles rx350 traded on an mdx because of knee surgery and a bulky center console on the RX. I've seen an element traded in with 81 miles because the guy bought it, drove it home, then realized it wouldn't pull the trailer he used for cabinet installation, drove it back and traded it in next door for a fj cruiser.

A car like a gtr could make minor back issues into major back problems and make you switch to a rolling watebed like an RX.

As the dealer, those are some rough negotiations. No one likes to hear their car depreciated at a rate of $100 per mile driven.

saturno_v

The problem is that it is very difficult for a dealer to sell an almost new used car....for only few thousands of dollars of difference people would buy it brand new and often with better financing rates.

black label

It can be difficult but CPO programs can make it attractive. In the case of an Acura you can end up with a much longer factory warranty and they can have good subsidized rates as well. Also, unless your dealing with a factory subsidized finance rate, a new 2015 and a used 2015 both can get the same rate.

The bigger issue for a dealer is a used 2015 won't get any factory rebates that a new 2015 could. I've seen situations where I could sell a new Acura tl or less than one that was gently used because the factory out a $2000 incentive on the new one so he dealer owns new ones for less than used ones.

Costco

Hmm, how do you tag/mention people on here...

NJ SHAWD

He's been through like 50 cars, a good amount of them new.

oonowindoo

this is one of those things that really depends on the person's preference and financial situation.

I have not owned a car for more than 3 years since my first car regardless lease or bought. After many lessons, i have learned that i should not be buying any car (Except S2000), i should only lease because in most cases, i would always end up upside down in equity in 3 years unless i put a huge down payment

oonowindoo

WTF. Half of what i typed disappeared

anyways.

As of right now i prefer paying rather than dealing with used/older cars. I know i will always be under warranty, loaner cars and the latest tech and performance and that means i have to pay for it.

I am not looking at it from the financial perspective, rather my personal enjoyment. I guess this is the classic case of what you want vs. what you need. Similar to Iphone buyers. Why do they always have to buy 1 whenever a new one is released when the old one is just fine?

But even the financial perspective is highly debatable.

Like i told my friends, dealing with a long term gf/wife is hard enough, at least i still can get a new car every few years.

Does everything in your life make sense financially? i doubt it. Sometimes you do it because you like it and you want it.
Why did you buy a Q50 when a $15k Nissan Versa Note can do the job just fine?

justnspace

iTrader: (1)

<p>Hi @Costco</p><p>&nbsp;</p><p>to add to the discussion; it's the American Dream! buy cars on credit and switch often!&nbsp;</p>

knight rider

iTrader: (1)

Interesting topic. My brother is a habitual car trader. You name a car; he's had it. I always attributed it to his personality. The same personality trait that prevents him from committing to one woman for any significant length of time. That trait? IMO, is trying to find happiness in things, and not realizing that (especially if you're a car guy) no car will make you happy. There is always a "better" one out there. Just sayin...

On another note, when you continue to trade in vehicles that frequently you don't think about the financial factor. It's similar to buying a car (period). Everybody always says, "I got a great deal" after they leave the dealership, knowing full well that they just got took, at least a little bit. But we are always happy with our new car, and okay with the deal that we got.

Short story - Frequently trading cars is not financially logical. It is an impulse.

AZuser

short answer: YOLO

Booya4139

wife lol

Booya4139

from what i've seen of people making these bad decisions the typical attitude is concentrating only on monthly payment. Roll negative equity, extend the term, who cares about the rate...

I'm all for spending a little extra to get what you really want... but you do it in a grownup way where you have a plan to get value from whatever you are doing.

If you took an hour you could pretty closely figure out what your real yearly cost of any car is by looking at projected mileage and depreciation, maintainence, insurance, gas. Its the depreciation that really drives the value you get out of driving that car those extra bunch of years when you look at the opportunity cost of jumping back into a purchase.

Everyone knows this stuff, but putting it in practice you don't think about paying yourself 5k a year to drive your perfectly fine car a little longer.


To all the YOLO, you can take that 5k and put it into a vacation or experience you wouldn't have otherwise had the chance to do.

TacoBello

Yes and yes.

Do you know the difference between wealthy people and average people? When wealthy people come into, say, $5000, they invest it and make more money off it. When average people come into, say, $5000, they spend it because they have "extra" money.

012TL-GLM

all about disposable income

plenty of folks would love to be able to switch cars frequently, but most can't. I think I just read that the average american holds on to a car for 11 years now?

I think the financial gurus say your best best is to always buy a 2 year old car. Maximizes lifetime of the vehicle compared to cost, as the initial depreciation hit is past.

With cars embracing technology the push to trade often is strong. My issue is I love so many different vehicles and life is short I rarely keep a car longer than 3 years.

From my observations and what I've learned from salesman the guys who are trading in a car after a couple months generally are not rich. They're either content to live in debt or still in mommy's basement

Costco

How did you do this?!

mvp2765

iTrader: (1)

I too find it crazy how people switch up cars like cell phones these days. It's not financially smart, however, my wanting to hoard cars isn't smart either.

I like buying cars and always want more, however, I don't like selling them which is why I have them for so long.

oonowindoo

YOLO only make sense to a certain extend. There are people who can't afford it in reality but still force themselves to get a new car every few years to show off.

And is also another group of YOLO, who realistically can afford a monthly payment of $400, $500 or $600 .... and it is really not much different than say the cable bill, phone bill or other utility bills. It is just something they will always have.
And at the same time, it does not really affect their vacation or savings.

That is why i said earlier it is heavily based on your personal preference and financial situation. You cannot judge others based on your own situation because you just don't know.

Also, there are plenty of people who could buy new cars every 2 or 3 years like pocket changes but chose not to because it is just not their thing.

honda_nut

I think what you said sums it up perfectly. My dad says the same thing. There's a reason he daily drives a 15 year old Odyssey with peeling paint, while his employees earning minimum wage have nicer cars and phones and such. He calls them "rich" lol. They get a pay check, pay their bills, and spend the rest on extra junk because apparently their pockets are overflowing. My parents on the other hand invest most of theirs back into their businesses. Their new MDX, which I made them get since their car is embarrassing, sits in the garage all week until they go out somewhere. They paid the whole thing off in cash lol.

Curious3GTL

Do you know what the reason was? How long did he own it, two weeks?

NSXNEXT

iTrader: (2)

Wow thought you were describing me.
Drives a 16 yr old TL
Wife drives a 9 year old Sienna
2013 Genesis RSpec sedan sits in the garage 2 1/2 yrs old 7k miles

All paid off.
The entitled generation thinks they all have to drive new Bimmers.

TacoBello

A friend of mine was a general manager of a Ford dealership here in town (he's now an owner of another )

Anyway, he would occasionally tell me about the amount of people who'd come in and buy shit they couldn't afford. It happened daily. Countless people would sign for shit they didn't understand or couldn't afford.

One fellow came in and "bought" a brand new, 90k truck. Except he still owed 30k on his last truck (after trade in), so that amount got pushed on to the new one. Already at 120k, plus it was all financed. By the end, that 90k truck will cost him over 150k because he "needed" the newest model.

It's terribly sad to see people make extremely bad financial decisions all the time. Instead of teaching some of the bullshit they do in school, they should have some basic finance classes to teach people how to be responsible in the real world and live within their means. Countless people would sign on the dotted line for stuff they didn't fully understand.

TacoBello

yup, I'm in the same boat. Car payment? What's dat?

All but one of my/our cars were paid for in cash.

Financed once. Never again.

CLtotheTL32

iTrader: (3)

It wasn't traded in on another vehicle but that's all I know

Ratheruneeq

I bought a 91 legend coupe LS in 2000 with 132k on it. I owned it for 13years until someone totaled it... quality is quality.

Legend2TL

paid for in cash

1985 500 Interceptor
2003 Pilot
2005 TL

Have some friends who've done pretty well buying used cars and motorcycles, using them then reselling, sometimes for profit. Comes down to timing, patience, knowing where to look for buying and selling, and having a good eye/mechanic. One got a used Diablo after it's 30K mile service, and sold it for slight profit before it's 45K service. If you include inflation the cost of then it was a wash, only insurance and minor service for expenses.

Booya4139

I financed the minimum amount possible on my TL because it was .99% financing and cost me basically nothing to do it. I didn't plan on it, but it seemed to make them more willing to take my CPO low ball offer. 2 year loan paid off in 8 months because it was irking me having to pay each month.

thoiboi

<p>1.75% 60 month loan..&nbsp;</p><p>&nbsp;</p><p>Anything under ~2% in my book is worth financing due to 'time value of money'</p><p>&nbsp;</p><p>You can pay cash all you want and that's great for you but if I can invest all that money at the beginning, I think I can easily net more than the interest amount paid in 5 years </p>

SuperTrooper169

iTrader: (2)

Pics of Honda Interceptor now! That was my first bike!! Miss that little rocket.

wackjum

I bet many people know full well but they lack the self control. I've been taken along on many trips to help people buy cars because I'm the resident "car guy." Sometimes my advice is followed, but sometimes its clear their mind is made up and they just want me to validate their horrible decision.

It takes a lot of self-control and self-assurance to not play keeping up with the Joneses.

TacoBello

It's funny you say that, because by not playing "keeping up with the joneses" early on, one has the ability to become the joneses later on and have others follow them. Society as a whole is demanding instant gratification, and as such, they rarely look at the bigger picture.