Vehicles - Do you lease or buy?

[cflutist]

Seems that most of my neighbors are leasing their vechicles now (they are business owners and must just write it off on their taxes). So I was wondering what the Pricescope community does with respect to their vehicles?

 

[Jennifer5973]

Other--I am BAD. I lease becausI get bored fast with cars and always want a new one. Plus, after a few years, a car is "worthless" to me, so i like to dump it and get a brand new one. In the past, I have been very happy leasing ...but now, I am in a lease I want to get out of and it's very difficult.

I can't get into the pros and cons of leasing--that argument can go on forever

...leasing has worked for me because I like new cars and to change often...it's only when I decided I wanted OUT of my current lease after only one year that I am finding it is a BEAST.

ETA: My usual reply should be "Lease and turn car in at the end of the lease" but my current situation has skewed my answer...I am doing everything I can to get out of this lease becasue I want a different car.

 

[tawn]

I hit the wrong one...I said dealer financing, but meant bank financing. We had a trade-in...and my hubby is getting a decent bonus, so we''re planning on paying most of it off right away. Paying for 7 years on a vehicle seems crazy to me...

 

[cflutist]

Are auto loan terms 7 years now? Used to be 4 years the last time websailor used one. His was one of those dealer zero % APR deals that was hard to pass up. Gee, that was back in 1996, maybe its time for a new truck for him?

 

[Dancing Fire]

here is Jenn''s car.

to match her fabulous jewelry collection.

http://images.google.com/images?q=maybach&hl=en&lr=&sa=N&imgsz=

 

[tanuki]

Wow are we old fashioned! (Actually we are complete nerds).

We are in a cycle where we plan to keep each car 10 years. We replace a car every 5 years so one is relatively new and the other is on the way out.

We don''t borrow money - we pay cash when we drive it off the lot.

We make our car payment to ourselves. I have two mutual funds designated for future car purchases. Both are those "no brainer" funds that move money progressively into bonds as you get closer to a particular date. A number of brokerage houses have them. Ours are Fidelity 2010 and Fidelity 2015.

I like a luxury car and we have been able to afford one so we save enough to plan for a Lexus budget. If we do that we would still have enough to have a new car even if the fund underperformed our expectations. If it overperforms maybe I''ll finally get that Porsche Cayenne I''ve been wanting.

We estimate what we think we will need to pay for the car in 10 years accounting for inflation and an average return and taking out any cap gain taxes and then set the thing on automatic draft from our bank account. We put money into them each month just as if we are making a car payment but we are paying ourselves. When it gets to be time to buy the car the amount of money in the fund determines our car buying budget.

 

[icelady]

Date: 6/12/2005 7:17:36 AM
Author: tanuki
Wow are we old fashioned! (Actually we are complete nerds).

We are in a cycle where we plan to keep each car 10 years. We replace a car every 5 years so one is relatively new and the other is on the way out.

We don''t borrow money - we pay cash when we drive it off the lot.

We make our car payment to ourselves. I have two mutual funds designated for future car purchases. Both are those ''no brainer'' funds that move money progressively into bonds as you get closer to a particular date. A number of brokerage houses have them. Ours are Fidelity 2010 and Fidelity 2015.

I like a luxury car and we have been able to afford one so we save enough to plan for a Lexus budget. If we do that we would still have enough to have a new car even if the fund underperformed our expectations. If it overperforms maybe I''ll finally get that Porsche Cayenne I''ve been wanting.

We estimate what we think we will need to pay for the car in 10 years accounting for inflation and an average return and taking out any cap gain taxes and then set the thing on automatic draft from our bank account. We put money into them each month just as if we are making a car payment but we are paying ourselves. When it gets to be time to buy the car the amount of money in the fund determines our car buying budget.

Wow, Tanuki, your planning is very impressive! Great way to stay out of debt buying a car.

We use bank loans (we are able to get a very low interest rate). We have one car paid off, the other will be soon. We also have a 14 year old getting ready to drive

, and my car is probably the best for her to use so we may end up with three cars in about 4 years. Ideal since mine is paid off. She will need a good job to pay for gas and insurance!!!

 

[moremoremore]

I lease. I absolutely want a new car every three years b/c I'm a nervous nelly about cars. So I don't care if I'm wasting money. THe piece of mind I get and the joy of having new car smell every three years is MORE than worth it to me ! We are city dwellers and hubby works in NYC and I drive. We have one car and next year, I'll be smelling the new BMW X5 new car smell and I can't freakin wait I'm so excited!!! Tanuki- the porche cayenne is my absolute favorite...but I just can't bring myself to pay that much for a car....but if you get one I'll be jealous!

Hey JFo, why do you want to get out of your lease..what do you have in mind?

 

[Jennifer5973]

MMM, even TALKING about my car situation makes me sick.

I want a BMW or Lexus. But I got suckered into this 4 yr Solara lease that I am overpaying for. Unless I can transfer it, I am screwed--believe me--I''ve been at the dealers and there is nothing they can do--too much money "to bury." Uh, as much as I want a new car, I don''t think $975/month, + $3,000 down, + $11,000 BALLOON payment after 5 years is worth it for a BMW 325, do you????

 

[abradabra]

Just paid cash for it straight out....

I''m trying to keep my debt as low as possible right now, so I can qualify for the best possible mortgage when I go to buy a house in the next few months (no credit card debt, school loans, etc.).

 

[moremoremore]

Um, NO! Is that what you''d have to pay when they put the penalties into the new lease? Crazy. And why would you want a 325 anyway LOL

You need a 745

Do you totally hate your car? How long do you have to go on the lease?
BTW, this has nothing to do with anything, but I have my hubby talking about a 2.5 G Si1 round LOL...I''ll wait a while, but the flood gate has been opened

 

[Kaleigh]

We pay cash.

 

[Lord Summerisle]

hers: dealer finance... second hand car
mine: bank finance.. new car

both plan to run till they drop

 

[diamondlil]

We have paid cash in years past and used dealer financing as long as the rate is good, but now we use our HE credit line and get to write off the interest. Makes more sense to us. I''m not a lease kind of person (although I absolutely would lease if I had a business). We have always babied our cars and they last for 10+ years. I would rather pay off my HE credit line asap and just enjoy the car for years and year, payment free.

DiamondLil

 

[Momoftwo]

Credit Union finance, pay off early and drive til they drop. Currently own 4 cars: ''98 minivan-paid for, 108k miles; 96 Neon-paid for, 105k miles; 92 Honda-Used, bought for son-paid for, 85kmiles; ''01 Honda (used -oldest son''s) currently paying for, 30k miles. They all run great. We get very low interest loans since we have such good credit and always pay them off a year or more early. We feel that leasing is a waste since at the end, you have nothing to show for it and usually owe for extra miles, etc. Even with depreciation, a car you buy is still worth something when you get rid of it. With 2 kids in college we dont'' have extra cash for anything. That will take care of itself in a few years.

 

[cflutist]

Steve, LOL, my car which I paid cash for 3 years ago only has 12K miles on it.

Is there a limit to the number of miles you can drive without a penalty if you lease? If you go over that, how much extra do you have to pay? (have never leased before, so I don''t know).

 

[perry]

I have purchased 5 Used vehicles, and paid cash for 4 of them. One of them I financed from the car dealer (Used with about 4000 miles on it - the people did not like the car and traded it in).

I try to maintain 2 vehicles. A Car, and a Van.

Thus my last purchase looked like this:

Used "older" conversion van 140,000 miles. Body and interior in much better than average conditon. Full maintenance records fro 5 years. Radiator, Gas tank & pump recently replaced, Front breaks and ball joints/tie rods recently done. Tires in good shape. $2500.

New Shocks, Sway bar bushings, front "wheel well" break hoses. $700

Premium Remanufactured Engine (I figured as much when I puchased it), Rebuild Transmission (it was in much worse shape than it should have been), New A/C condenser, Rear Breaks, Rear-end Seals and oil change (one seal had started to leak), repair AirBag system, and other minor fixes. $7800 (wrote check last thursday).

Grand total: $10,000 for an older van with body and interior in much better than average shape and drive train like new. A new set of Micheline tires and it will be set for many years.

Perry

 

[jorman]

I had my last car for 10 years. I am almost 26. You do the math. Let''s just say when I was right out of college, I was baby sitting for a professor and his little boy asked me, "Are you from the ghetto?" When I said, "No, why?" He responded with, "Because you have a ghetto car!" Betsy was a 1994 TEAL green Ford Escort. My parents bought her for me when I was 15. She is now happily putting around town with a college student.

In March I purchased my new Honda. I researched many possibilities from leasing to financing (through the dealer and through banking institutions and credit unions). I wanted the best deal in the long run. I went with a 60 month financing program with 5% financing through American Honda. It includes a GAP policy and dent and scratch protection as well as the 100,000 bumper to bumper.

For me this was a great deal. I found most banking institutions were giving the low interest rate of about 6%, so I was happy with what Honda offered. I also avoided the leasing option because I heard about what a nightmare it was to get out.

I am very happy with my Honda too, which is good since I am moving to the expensive gasland of California!

Janna

 

[aljdewey]

Is there a limit to the number of miles you can drive without a penalty if you lease? If you go over that, how much extra do you have to pay? (have never leased before, so I don''t know).

Yes, there is a limit.....it varies according to the lease plan. There are a few different plans that let you select from a few options on mileage....the more mileage you want allowed, the more expensive the lease plan. When you lease, the payments you make are the dealer''s estimate of how much your use of the car will cost again the total value of the car.

My husband leased a Mountaineer - his lease was 36K miles over 3 years. He only drove half of that, so no penalty.....but he paid to have used all those miles, and he only used half. Half of what he paid for didn''t get used.

How much the penalty is also depends on the lease term.......it wasn''t bad when he leased the Honda, but the penalty on the Mountaineer was something like 10 cents a mile.

 

[cflutist]

Date: 6/12/2005 2:59:28 PM
Author: aljdewey

Is there a limit to the number of miles you can drive without a penalty if you lease? If you go over that, how much extra do you have to pay? (have never leased before, so I don''t know).

Yes, there is a limit.....it varies according to the lease plan. There are a few different plans that let you select from a few options on mileage....the more mileage you want allowed, the more expensive the lease plan. When you lease, the payments you make are the dealer''s estimate of how much your use of the car will cost again the total value of the car.

My husband leased a Mountaineer - his lease was 36K miles over 3 years. He only drove half of that, so no penalty.....but he paid to have used all those miles, and he only used half. Half of what he paid for didn''t get used.

How much the penalty is also depends on the lease term.......it wasn''t bad when he leased the Honda, but the penalty on the Mountaineer was something like 10 cents a mile.

Thanks for the info. So its almost like a cell phone. You pay for x amount of minutes, and if you go under (last month I used only 35 of my 500 minutes) then they win, if you go over, you pay a higher rate for the extra minutes, and if you want to cancel before your 2 year contract is up, you really pay through the nose. LOL

 

[hoorray]

We pay cash, but if they have any of those 0% financing deals next time out, of course wewould use their money instead of ours

. My car will never die. I drive it about 3-4k miles a year. Dh''s car is the car we take on the road, so it will need to be replaced periodically. he''s thinking about the Lexus SUV Hybrid...

 

[strmrdr]

I pay cash and buy used.
Thank you to everyone that leases cars it makes for some very affordable quality used cars that you have taken the biggest hit in value on for me :}

 

[MissAva]

Edmunds is like the car version of Pricescope...It gives you a ton of info and is a great way to compare cars. Something I hadnt realized when I was looking to buy my SUV was that the RX330 uses regular gas, a major thing for me. I

reading the articles and seeing how they rate. They also have a lot of info about cost to own which is spiffy too.

 

[ForteKitty]

Pay w/ cash, buy brand new. I know what people can do in their cars, and the thought of owning something that''s potentially contaminated, well, that just grosses me out. My friend bought a used M3 from a dealer, and found a small slit in the hand break leather area... upon deeper probing, he found a small vial of cocaine!!!

It turned into a huge mess with the police and all, and he ended up selling the car because he hated it. Even w/ a brand new car, I still bring my portable blacklight... just in case.

 

[Kaleigh]

Ewwww! I didn''t think of that. Yuck!!

 

[moremoremore]

My pleasure strmrdr! I just love the fact that I never have to put a penny into my car and I get to have some hot new wheels every few years! I never had a car growing up and then had my father's hand me down hunk of junk. The maintenance was crazy and I was always afraid of problems...so that's part of why I go shiny and new

 

[icekid]

Date: 6/12/2005 4:01:42 PM
Author: strmrdr
I pay cash and buy used.
Thank you to everyone that leases cars it makes for some very affordable quality used cars that you have taken the biggest hit in value on for me :}

haha, well said strmrdr. cars are the biggest waste of money EVER, unforunately (b/c i do like nice ones!). i live in the city and walk 5 min to school, so my car is sitting in my parents'' driveway at the moment (an older Audi w/ low miles).

our personal finance prof in college drilled it into our heads that buying a brand new car is silly, when it depreciates thousands the moment it leaves the lot. someday i will probably buy a nice splurge car though... well after i''ve finished med school.

doctors are reputedly horrible with their money, so i''m making sure that we are as careful with our saving and spending as possible. we want to retire early!! or at the very least have the financial freedom to do to if we want to.

 

[lost on 5th]

before NYC.. i was into a pattern of lease and rollover lease. (get a 4 year lease.. and upgrade to a new car within those 4 years....resign a new 4 year lease etc.)

reason.... i like new designs.. i like perfectly running new cars.. and i like to drive hard. the cost of leasing is offset by never having to go to a mechanics shop to get work done. **i however feel bad for the people who get the car after i had it. for the few years in my possision it will look great....run great.... but i know how much ware i put on engine and brakes.

once i leave NYC....someday. i may lease my everyday car... and buy our "toy car"

with the change in cost of living.... im sure we wont second guess the $$$ of monthly payment...

 

[Patty]

Date: 6/12/2005 4:42:34 PM
Author: ForteKitty
Pay w/ cash, buy brand new. I know what people can do in their cars, and the thought of owning something that''s potentially contaminated, well, that just grosses me out. My friend bought a used M3 from a dealer, and found a small slit in the hand break leather area... upon deeper probing, he found a small vial of cocaine!!!

It turned into a huge mess with the police and all, and he ended up selling the car because he hated it. Even w/ a brand new car, I still bring my portable blacklight... just in case.

Do you ever stay in a hotel room? Because I think people do things there too.

 

[Jennifer5973]

Date: 6/12/2005 6:44:03 PM
Author: Patty

Date: 6/12/2005 4:42:34 PM
Author: ForteKitty
Pay w/ cash, buy brand new. I know what people can do in their cars, and the thought of owning something that's potentially contaminated, well, that just grosses me out. My friend bought a used M3 from a dealer, and found a small slit in the hand break leather area... upon deeper probing, he found a small vial of cocaine!!!

It turned into a huge mess with the police and all, and he ended up selling the car because he hated it. Even w/ a brand new car, I still bring my portable blacklight... just in case.

Do you ever stay in a hotel room? Because I think people do things there too.

I sooooooooo get where ForteKitty is coming from. My mom's motto growing up was "there's NO clean like a BLEACH clean..." lol. We're all germophobes. I am super picky about hotels and still Lysol everything in the room, don't walk on the carpets or sit on bedspreads, and wear flipflops in the shower. I heard that Joan Rivers travels with her own toilet seat but I haven't graduated to that... yet...lol/j/k.

Hey--I like new cars. I know I pay for it in the lease. But that's my choice. I am not interested in owning a car for 10 years. Hey, I wish I was-I would save a lot of money. But leasing works fine for me and my picky nature. And I'll lease again when I am out of this one. I am on my 5 th car lease and the problem isn't the lease but that i got a car I really don't want. I am capitulating to my inner snob and the need for a trendy name-brand car. But, I may have to wait. Such is life.

"Hear me world, I am throwing money away on leased vehicles and I LOVE LOVE LOVE it!!!"