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Cars - How Long to Keep, Buy Outright, Loan or Lease?

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Honored Social Butterfly

Cars - How Long to Keep, Buy Outright, Loan or Lease?

I dodged a bullet last week, when my almost 10-year old car with 110K miles, started making a "funny noise" one evening. It turned out to be a reasonable repair .. but I was preparing by reading up on the new model I'd want, and getting prices for that & a tradee-in.

 

I keep my cars until it's not economic to continue, or there's some "can't live without" upgrade in the new models. It's comfortable, and I've never felt a need to impress anyone. I've always bought them new & outright, not getting a used car, loan or lease.

 

How about you?


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Honored Social Butterfly

Old thread, I know, but I'm trying to figure out what to do for my next car.

 

I generally keep them 8 years and have about 200,000 miles on them by that point. But I moved and my life changed and now I have fewer than 100,000 on my car.

 

I generally upgrade for safety features too. But my current car has most everything. Nothing really significant has come out over the past several years...

 

I purchase new. But not high-end cars.  I had Tesla lust for awhile but I'm over it.

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Honored Social Butterfly

@ManicProgressive - So what exactly is your question? Are you trying to decide if now's the time to trade in or wait longer, or do you want to figure out what car to get? Or is your question something totally different?

 

My last 3 or 4 cars were Toyota Camrys, and I've been happy with them. They did a total redesign for the 2018 Camrys, with all the latest safety features. Late fall 2017 when the new models became available, I had a 2005 Camry (12 years old) with about 140K miles on it. The only problem .. and expensive repair .. was that the moonroof was't sealing 100%. No leaks yet, but you could hear the air rushing thru. When I first looked at the new cars, I was annoyed that the GPS required a smart phone to provide a connection, and I didn't have one at the time. I looked at various other models, but came back to the Camry having he best features for the cost. I got a smart phone & got the car spring 2018.


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@EveRH wrote:

@ManicProgressive - So what exactly is your question? Are you trying to decide if now's the time to trade in or wait longer, or do you want to figure out what car to get? Or is your question something totally different?

 

My last 3 or 4 cars were Toyota Camrys, and I've been happy with them. They did a total redesign for the 2018 Camrys, with all the latest safety features. Late fall 2017 when the new models became available, I had a 2005 Camry (12 years old) with about 140K miles on it. The only problem .. and expensive repair .. was that the moonroof was't sealing 100%. No leaks yet, but you could hear the air rushing thru. When I first looked at the new cars, I was annoyed that the GPS required a smart phone to provide a connection, and I didn't have one at the time. I looked at various other models, but came back to the Camry having he best features for the cost. I got a smart phone & got the car spring 2018.


No real question. Just responding to the thread. It was interesting to read different people's perspectives. I added my own.

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Newbie

I would like to buy an suv.  However, I am only 5 ft tall.  Most are too difficult to climb up into.  ( Also, I am 81 years young)  Any suggestions for one that is not so high off the ground?

 

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Retired Community Manager

Find out how long should a car last and how to make it last longer in AARP's new article: How Today's Cars Are Built to Last

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Honored Social Butterfly

Today everything lasts only as long as the electronics don't become outmoded .. which is not as long as things that didn't depend so much on technology. My guess is that retrofitting of newer safety systems will be too expensive, or operating systems will become obsolete .. just like computers & smart phones. Every few years there will be so many improvements to cars, that the longevity of the mechanicals & body will be the least of the considerations, when it comes to replacing them.


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Conversationalist

I buy new and buy cars with good track records like a Toyota or Honda. I also keep them; the last one for 15 years which was then sold to a friend.

 

I do my own maintenance, servicing and repairs.

 

I also pay cash for my new cars. I am too poor to make those extra interest payments.

 

As for leasing, that has got to be the dumbest way of owning a car. You are making monthly car payments for the rest of your life. How smart is that?

Alex
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Bronze Conversationalist


@TravelledOne wrote:

I buy new and buy cars with good track records like a Toyota or Honda. I also keep them; the last one for 15 years which was then sold to a friend.

 

I do my own maintenance, servicing and repairs.

 

I also pay cash for my new cars. I am too poor to make those extra interest payments.

 

As for leasing, that has got to be the dumbest way of owning a car. You are making monthly car payments for the rest of your life. How smart is that?


I seriously doubt that you do all your own repairs, unless you're an ASA-certified mechanic with the required tools and test equipment, and buy all your parts wholesale. Unless, of course, you own a vehicle from the 1970s or 1980s. Just saying - I did major and minor work for 20+ years before regulation put the kibosh on that.

 

Leasing is only a dumb move if the tradeoffs don't outweigh the benefits. That calculation differs for each driver - and each situation. It's simply a matter of assessing your own needs, short and long-term. Money is only one part of that assessment. If that's your only priority, though, then yes -  buying a beater and running it into the ground is your best bet. You're betting that the old heap will deliver when you need need it the most. Good luck.

 

Parts, labor, and repair costs have skyrocketed since my last new vehicle in 1992. For this and other reasons, for the first time I'm considering the leasing option when beetlebomb finally succumbs to nature. At some point, ya just gotta let go.

 

As far as the monthly payments go, there are upsides to that as well. But, that's an important part of the total assessment required before you make the decision. You're certainly not going to be paying "for the rest of your life" if that option doesn't work out. A lease is a finite contract - just like a new car note. In this age of 6-year (or more) bank notes, that's something worth considering.

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Periodic Contributor

Alex, the dumbest way to own a car may be to purchase it.  Leasing can be very attractive financially if the money factor is low enough and the residual is high enough.  If you understand the innards of car leasing and the factors that affect it, you can often construct some very good deals. 

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Honored Social Butterfly


bk3688 wrote: "...... the dumbest way to own a car may be to purchase it.  Leasing can be very attractive financially if the money factor is low enough and the residual is high enough.....".
   IF you purchase a car and keep it until the paint falls off, you'll save money. Leasing is nice because you get to have a shiny new car, possibly much nicer than you can afford to purchase, under warranty, probably no repairs needed other than normal maintenance, easy trade in, low payments.   That's a nice lifestyle choice many, if not most of us, would like.
   But long term, you'll spend far more money than if you purchase the car and keep it until the paint falls off. There is nothing 'dumb' about that. It can be inconvenient, especially once the car gets older, because you'll need any number of expensive repairs. But, by then, car should be paid off. Also, keep in mind, cars are so much better built than they used to be. We all grew up with exhaust systems needing to be replaced every few years, tune ups every year, and in general, all parts needing replacement far sooner than they do now.
  

"...Why is everyone a victim? Take personal responsibility for your life..."
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Honored Social Butterfly

@bk3688 wrote:

Alex, the dumbest way to own a car may be to purchase it.  Leasing can be very attractive financially if the money factor is low enough and the residual is high enough.  If you understand the innards of car leasing and the factors that affect it, you can often construct some very good deals. 


So why are all the experts consistent in telling people that leasing isn't a good deal? Don't they always find ways to decrease the residual value, by penalizing for even the teensiest dings & scratches? And if you go above the allowed mileage?


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Honored Social Butterfly

 
"The key to success is to keep growing in all areas of life - mental, emotional, spiritual, as well as physical." Julius Erving
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Bronze Conversationalist

Good topic, considering how much vehicles have changed over the last 20 years. Consider the following:

 

Used to be that a reasonably skilled owner could perform most of the routine maintenance and repairs themselves. I was in that category for many years - and saved countless dollars in the process. Those days are long gone. Mandatory fuel efficiency, safety, and pollution standards have forced manufacturers to basically re-invent the wheel. All good measures, IMHO, but these mandates dramatically drove up the cost of even the most basic vehicle. And, have severely limited the amount of work the average owner or backyard mechanic can perform. All modern vehicle functions revolve around a system of computer modules and sensors  - everything from the radio to the engine trim. Replacing a single module can set you back thousands. "Smart" ignition keys now cost about 30-50 bucks for a spare - no more 2-dollar copies from your local hardware store. Just getting to the spark plugs on some vehicles requires lifting the engine off it's mounts! The list goes on, but the bottom line is that, in addition to the purchase and operating costs, maintaining today's cars is a significant expense.

 

I can see why someone would consider leasing these days. In the past, most drivers would spend less over time by buying over leasing. But with gas prices and the cost of repairs, that option is looking more attractive - if you don't expect to go over the mileage limit. I may consider that option myself, when it comes time to retire my current ride.

 

I can definitely understand why so many folks are holding on to their 10+ year old vehicles. I'm one of those, driving an '02 S-10 Blazer. It's got over 250K miles on the clock, and I expect to get at least another 50K-80K miles out of it. I need a 4WD vehicle up here in snow country, but the prices of late model trucks and SUVs are just too far out of range. Over the last 5 years, I've spent around $8500 in repairs for ol' Betsey. Still, far less than I would have paid for a decent 2-3 year old replacement. On some new vehicles, I would have lost that much money just driving it out of the showroom. Yes, times have changed.

 

We're fortunate to be living in a time when vehicles can be expected to last 300K miles or more. My neighbor's 1998 Camry just passed the half-million mile mark. But to get this kind of longevity from a vehicle, regular maintenance is imperative. Eventually rust will get the better of any car or truck, and there will also come a time when the frequency of repairs outweighs the cost of replacement. However, I remember the days when cars were much cheaper to purchase, but were ready for the junkyard after 80K miles. Either way, keeping a vehicle has always been expensive - but I wouldn't go back to the old days.

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Conversationalist

Every time I've 'run the numbers' on buy vs lease using those free Web calculators, it comes out "no advantage either way". We've bought new and used, had mostly good luck with used but prefer new. We keep our cars for a long time and maintain them rigorously. 

 

Plan to buy a new car in 2016, but no urgency about it except that I LOVE CARS. If I won the lottery (which would be a miracle, since I never buy tickets, LOL) I would probably end up with at least four different cars - the first one being a Tesla S. Gad, that car is so gorgeous.............!

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Contributor

I have been in the car business for almost twenty years at the same dealership.  I was always a firm believer in buying a used vehicle and keeping it until it doesn't owe you anything.  It took me many years (about 18) to realize my happiest customers are those that lease.  They get a new car every three years and keep their payments very low at the same time.  So, a year and a half ago I leased a Prius for $200/month and have never looked back.  I decided to lease, also, because I have never seen electronics and safety equipment change as rapidly as it has been in the last few years.  i will always have a payment--but it will be low and one I can plan on.  No maintenance or repair costs.  I am paying myself the difference between a "normal payment" and my low lease payment--so I pay myself my own equity.  I hate the trade-in process (and I sell cars!) and I will never have to go through that again.  Does it cost a little extra to lease over purchasing?  Yes, but if I get in an accident I want the best safety equipment available.

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Contributor

Thanks for your input. I have never leased. You mentioned no maintenance or repair costs. Is this true for all car dealers? My 2003 Rav 4 has 175,500 miles and I am researching leasing vs purchasing.

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Gold Conversationalist


@kl103796 wrote:

Thanks for your input. I have never leased. You mentioned no maintenance or repair costs. Is this true for all car dealers? My 2003 Rav 4 has 175,500 miles and I am researching leasing vs purchasing.


Most leases will run for only a few years, maybe 2-3-4 years. Leasing works best if you have it until the factory warranty expires (no longer). In this case you're protected from major repairs and you have a known predictable cash flow for auto expense.

But for someone who keeps their vehicle for many years and well over 100,000 miles it's probably more cost effective to purchase from the beginning, no lease.

Hmmm, I did once lease a car. A Toyota Corolla. Bought it after the lease ended. I crunched some numbers and in the end I think I may have come out slightly ahead this way versus outright purchase...but this involves some guessing on purchase price. Anyway, I felt better about it then. Likely will not lease again.

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Trusted Contributor

Enjoyed your article. 

I also absolutely hate purchasing a new car. In fact studies have indicated that is one of the most hated things people do.

Re. Leasing I am also considering that again because i no longer drive as much.

Re. buying. i had AAA buying service look into  a new 2015 volt as I was so sick of the process. Dealers had them advertised at 28000 to a  little over 29000. He called me back and said the best he could do still ended up at about 35000 (the Mfgr. sticker price). The reason for this was ad ons such as paint protection, fabric protection, glass tinting etc. that were not included in their advertised price. Also he said the loan process would nick me fro about $3000. Net result auto cost just over $35000 .

No wonder dealers have such a bad rep.

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I have never leased a car, and have no plans to do so.  I have a 2001 Toyota Camry with 290,887 miles.  All I have done is change the fluids, tranny and engine.  I have used synthetic oils so that has definitely contributed to it long life.  It still runs like a top and I am going to keep it until it cost me some money or it dies, whichever comes first.  Then I am going to go out and buy myselft another one.  

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I have always puchased cars on credit. However, we normally keep cars until they are at 150000 to 200000 milwa.

That being said, I purchased a 2010 Pruis as I wanted a high gas mileage car and Toyota had 0% financing for 5 years. 

our other car is a 1998 mercury mountaineer with just over 200000 miles. Keep in mind that at an average of 18 mpg  and  an ave. of $2.50 per gallon I have spent approximately $28,000 on gasoline.

That is more than what I paid for the car.

My last car had 140,000 miles was 10 years old and had 140000 miles when we  traded it in on the Prius.

I am seriously considering leasing for my next car if i can find a great lease deal, as we no longer drive nearly as much each year. I will also consider buying  if 0 interest is available. I would also be inclined to purchase an electric (chevy volt?) as they have close out deals on the 2015 ($5000 off sticker) plus you get the $7500 federal tax credit.


@EveRH wrote:

I dodged a bullet last week, when my almost 10-year old car with 110K miles, started making a "funny noise" one evening. It turned out to be a reasonable repair .. but I was preparing by reading up on the new model I'd want, and getting prices for that & a tradee-in.

 

I keep my cars until it's not economic to continue, or there's some "can't live without" upgrade in the new models. It's comfortable, and I've never felt a need to impress anyone. I've always bought them new & outright, not getting a used car, loan or lease.

 

How about you?


 

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Super Contributor

Buy 2-3 year old cars, sell at 150k before they have a really major mechnical. Pay cash only.


Sincerely,
Peter
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Honored Social Butterfly

A lot of the decisions we make about cars really has to do with our economic circumstances. It is, imho, always, without a doubt, less expensive to fix an old car and keep it going. Even a relatively inexpensive car these days will be in the $20000 range and devalue by the second as you drive it away from the dealer. Your insurance goes up. You pay interest on a loan.

   One could put $10,000  into an older car and replace the engine, do body work, tranny, and it would be good for another 10 years. I realize that it's age and elements that are hardest on a car, not mileage.

   I too have only had a handful of cars and kept them a minmum of 8 years, and 125000 miles. We then decided to spend the money to avoid the 'nuisance factor'. The older the car gets, things start to rust and fixes of various kinds are needed more frequently. 

   We always made a conscious choice to trade in a car because we had the means to do so, not because it was the least expensive option.

  Things have changed as we all know, in more recent times. Cars don't rust much, including underneath the cars. All of us oldsters remember when your muffler lasted only a few years, brake lines would rust out, electrical connections would rust, radiators needed to be flushed every year to keep them clean, and you needed a tune up every 12,000 miles. Stuff lasts now.


"...Why is everyone a victim? Take personal responsibility for your life..."
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Periodic Contributor

I'm also a long-term car owner.  Of course, my mileage tends to be fairly low as I am also a fan of being very efficient in my route when running errands and I like to use light rail when feasible.  I also do proper maintenance.  My last two (10 years old and 8 years old) were only replaced due to them being totalled (one by my father in law, one by a car hitting me hard enough to accordian me into the driver in front of me).  I'm 8 years into my Honda Accord and 12 years into my late spouse's CR-V.  While it might be fun to have a new car I likely won't spend the money on a new car in the foreseeable future.

 

I spend that money keeping up the 1968 Ford Mustang convertible that my husband bought before he died....  Woman Wink

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Super Contributor

Buy 3 year old cars with ~45k miles on them... drive for 100,000 miles... sell before they have a major breakdown.


Sincerely,
Peter
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Honored Social Butterfly


@3278443860 wrote:

Buy 3 year old cars with ~45k miles on them... drive for 100,000 miles... sell before they have a major breakdown.


Have done that a couple of times over the years. Usually works out pretty good.

 

Now have a 2000 Maxima, bought in 2005, with 45,000 miles then and 87,000 now. I don't think we have spent more than $1,000 total in repairs for the last 10 years. We're holding on to it as it stills looks good and is still mechanically sound.

 

Even our independent mechanic says it is in too good of a shape to get rid of it.....he must be telling the truth because he sure hasn't made any money off of us on this car.

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Honored Social Butterfly


@EveRH wrote:

I keep my cars until it's not economic to continue, or there's some "can't live without" upgrade in the new models. It's comfortable, and I've never felt a need to impress anyone. I've always bought them new & outright, not getting a used car, loan or lease.

 

How about you?


We don't agree on much but on cars, we do. The average age of our cars when we get rid of them are somewhere between 10-13 years old with somewhere between 120,000 and 160,000 miles.

 

At one time, I bought late model used vehicles but several years ago, the pricing of used vehicles changed. They got more expensive and new cars had more incentives so that the gap between a two or three year old low mileage car and a new one got quite small. I think the cash for junkers program might have had an influence on that pricing structure.

 

I see no reason, unless you use it for business, to ever lease a car.

 

I would consider a short term, low interest or no interest loan as long as the money I would have used (in a cash purchase) is earning more than the loan interest on the car.

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Honored Social Butterfly

Just changed out my timing belt and the other stuff for the 2nd time - I drive it until . . . . . . . I am very small so when I find a car that fits me, I love it and take care of it extremely well.

 

2001 Honda Accord EX, loaded, with 105,000 miles - (purchased new on January 27, 2001)

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Regular Contributor

Changed timing belt and all suggested parts past 90,000 on my 2001 Camry. Love it. Comfortable, dependable and excellent mileage. At 119,125, it's the nuisance items forcing me into a new car loan. What to do about a $50 plastic door handle that's a $400 labor replacement (x2!), the cracked cup holders, malfunctioning CD & DVD players, loose sun visor, plastics and rubber pulling off various locations, electronic door locks not locking all doors, diagnosed EPA problems that won't permit passing VA 2016 emissions tests at reasonable cost.  Have started my research. Cost of used below 40,000 miles/5 years make a new finance best option for me.  Already missing my Camry. Intend this to be my final vehicle purchase.  

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