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

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

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Message 11 of 28

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

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Message 12 of 28

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

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Message 13 of 28

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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Message 14 of 28
 
"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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Re: Cars - How Long to Keep, Buy Outright, Loan or Lease?

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Message 15 of 28

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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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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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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Message 18 of 28

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

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Message 19 of 28

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

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Message 20 of 28

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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