Considering a new car...opinions

[HawkMan]

OP, I don't know you from Adam, but I will say this: Do. Not. Lease! For me, a nearly 50 year old guy, I have one main principle when buying a car: Pay for it all up front or do without. NO exceptions. I don't even finance. With leasing, ask yourself this question: Do rich people lease? No, poor people do.

 

Explain How A Car Lease Works

 

QUESTION: Listener asks Dave to break down the mathematical flaws in a car lease.

 

ANSWER: A car fleece is basically renting a car. You pay $400 a month and at the end of the new car lease, you turn it back in. If you want to buy it, you are buying it for what they estimate at the beginning of the fleece to be the market value. At the end of the lease, it

[sc302 Veteran]

The cost of maintaining an older car is less than a monthly car payment of 300. Let's say you put on the mileage I do and you keep your car to the 200k mile mark (which I have done). What do you think is so extravagant about brakes, tires, plugs, filters, and oil changes? Does any of that sound really expensive? Let's throw on the things that die within 200k miles normally, plug coils, and sensors. 2+ years you aren't making payments if you drive 30+k miles a year, you really think you are going to put 7k in repair in that 2 years? You really think in the life of owning the car after the three year lease is up at 300 a month that you will total the same or more in repairs than you do in payments? Maybe on a luxury car or super car, not on these cars he it's looking at.

Do the math yourself. Tco vs lease. Eventually the car goes down to under 100 a month when owning it long term, the lease never gets that low...but you get that nice shiny new car every three years that you have to watch the mileage on.

[T3X4S]

OP, I don't know you from Adam, but I will say this: Do. Not. Lease! For me, a nearly 50 year old guy, I have one main principle when buying a car: Pay for it all up front or do without. NO exceptions. I don't even finance. With leasing, ask yourself this question: Do rich people lease? No, poor people do.

 

......

Wow!  

Tell me.  How would emulating "rich people" would be smart if you're not rich ?  Most of the time - you cant

Your beliefs might be from bad information given to you, obviously you think your actions are the smartest actions, but have you ever stopped to think that people with different financial resources have different priorities ?  And therefore do things differently ?

As for what "rich people do" - you need to define "rich" as that is a relative term.

For example, I will use someone I have known my entire life.  Lets say this person has assets of around $25 million, and income of about $1 million annually.  He leases 95% of the time he gets a car because he doesnt keep them for long.  Usually it is a 2 year lease, then he gives it back, and gets something else.  For those buying habits - leasing is the ONLY way to do it.

On occasion where he plans on keeping it for various reason, he will finance, or pay cash.  Maybe he finances it and declares it as a business expense so he can deduct the monthly payment - who knows ?  But he has his reasons.

Your thoughts are predicated on your situation - everyone is different.

Like you said, I dont know you from Adam.  Until you stated you are nearly 50, I always figured you as a young kid....

I dont consider myself poor, but I dont consider myself rich.  I used to lease new cars because, like the person in my example above, I didnt want to keep them for long.  However, now I think I like the idea of getting a lease return on a 1 or 2 yr old car - they ate the depreciation, and I can get something nice that I couldnt get brand new...  For my current situation, that makes sense right now. 

And for the times when something does go wrong with the car - it sure is nice to drop it off @ the dealership, they provide a loaner, and when your car is ready - there isnt a gigantic bill.

 

[sc302 Veteran]

Sometimes buying new is only a few more thousand or close to the price of a cpo car. Buying my 2010 with 0 miles was within 2000 of a cpo with 30k miles, after negotiations. My negotiation was give me your best price...

[T3X4S]

Sometimes buying new is only a few more thousand or close to the price of a cpo car. Buying my 2010 with 0 miles was within 2000 of a cpo with 30k miles, after negotiations. My negotiation was give me your best price...

Exactly!  My point was everyone's situation is different - you cant lay a blanket statement out there and say "this is the only way to do it"

In his defense, CoKid did say, "for me....." - I was using his post because he mentioned a common belief by many people, especially older people.... PAY CASH !  NEVER FINANCE !  But it sounded like, & maybe I'm assuming, he thought this was the way for everyone.

My main beef was - "thats what poor people do"

[ITOps]

Some things that will be needed to better answer the opinion peace.

 

What is your budget?

Are you single?

Do you prefer new or used cars? 

If used how far back would you go from this year?

Lease, Finance or Buy, with the first two options you will not own the car unless it is fully paid off.

If you are leasing normally your term options are 24, 30, 36, 42 and 60 months.

If financing your term options are 24, 40, 36, 42, 48, 54, and 60 months.

Also note for the leasing and financing normally you will be paying more than the car is worth in the long term if your payments go past two years.

What type of person are you (extravert, introvert, party person, laid back, etc.)?

Do you like sports and outdoor activities?

Do you normally travel with a more then 3 friends?

How do you like your music quality while driving?

Do you like bass in your music? If so you will need to think about trunk size.

Do you want a car that is very responsive or a regular joe car or don't car?.

How big do you like your rims? 17, 18, 19, 20+

Do you want a muscular sound and be pushed back in the seat when you gun it or do you prefer the regular gradual get up and go?

How many vales do you want in your engine V4, V6, V8, V12, V16?

How tall are you?

Do you like a tight car or do you like to have some room to move around?

What is your window size preference?  Some cars have tall or short windows?

Do you like a large amount to technology in your car?

Are you a business type person, White/Blue collar?

Do you have a problem with paying ~$200+ just for an oil change?

Do you have a problem with paying ~$400+ for a new set of fresh tires?

Would you prefer the finer things in life like plush leather seats, NAPA leather, real wood or carbon fiber trim?

Would you prefer a high end audio system or a regular one?

[123456789A]

The cost of maintaining an older car is less than a monthly car payment of 300. Let's say you put on the mileage I do and you keep your car to the 200k mile mark (which I have done). What do you think is so extravagant about brakes, tires, plugs, filters, and oil changes? Does any of that sound really expensive? Let's throw on the things that die within 200k miles normally, plug coils, and sensors. 2+ years you aren't making payments if you drive 30+k miles a year, you really think you are going to put 7k in repair in that 2 years? You really think in the life of owning the car after the three year lease is up at 300 a month that you will total the same or more in repairs than you do in payments? Maybe on a luxury car or super car, not on these cars he it's looking at.

Do the math yourself. Tco vs lease. Eventually the car goes down to under 100 a month when owning it long term, the lease never gets that low...but you get that nice shiny new car every three years that you have to watch the mileage on.

 

My car is 20 years old and I spend on average $80 a month on it, whether that's tires, service, oil change, repair, etc. Basically everything but gas. Plus it's so old I hardly pay any annual taxes on it anymore.

 

I could buy a Ferrari with all the money I have saved.

[Jim K Global Moderator]

To the OP.  Whatever car you decide on...don't lease.  It really isn't worth it in the long run.  Mileage restrictions, not putting any equity into it...basically just renting the vehicle.  At the end of the lease you'll either have to get a new car or take out a loan to buy the car you were renting.  You've had your car for 6 years...so I don't know if you want to be trading in a car every couple of years.

 

 

Does the math also include the extravagant service costs of owning an old car that he could afford to buy without leasing ? cause usually it doesn't and after 5 years the older the car gets the higher the yearly service and repair costs rise, and they start out really high to start with. This also doesn't include the aggravation and inconvenience of having the car break down or being without the car while it's being serviced. 

 

I've only had a few minor repairs to mine (fuel pump and front ball joints being the only "major" repairs).  It has been paid off for the past ten years.  The repairs have been hardly extravagant and certainly cost less than monthly payments.  ...and I own a Ford.

 

Edit:  The Fusion is a nice car.  I also rented a Toyota Avalon when I went TDY.  I was impressed with it except the interior chrome trim around the controls, air conditioner vents, and doors caused a blinding glare when driving in the sunlight.  To be honest...that chrome was one of the dumbest interior design flaws.

[ralphie_boy]

Breaking it down by category:

Rightness: Electric

Reliability: Honda

Comfort: Bigger

Economy: Used

Novelty: Elio 3-wheeler

 

P.S. Don't forget the insurance. Most companies can give you an exact quote if you give them a VIN number.

[#Michael]

To the OP.  Whatever car you decide on...don't lease.  It really isn't worth it in the long run.  Mileage restrictions, not putting any equity into it...basically just renting the vehicle.  At the end of the lease you'll either have to get a new car or take out a loan to buy the car you were renting.  You've had your car for 6 years...so I don't know if you want to be trading in a car every couple of years.

 

 

 

I've only had a few minor repairs to mine (fuel pump and front ball joints being the only "major" repairs).  It has been paid off for the past ten years.  The repairs have been hardly extravagant and certainly cost less than monthly payments.  ...and I own a Ford.

 

Edit:  The Fusion is a nice car.  I also rented a Toyota Avalon when I went TDY.  I was impressed with it except the interior chrome trim around the controls, air conditioner vents, and doors caused a blinding glare when driving in the sunlight.  To be honest...that chrome was one of the dumbest interior design flaws.

 

You don't ever get any equity out of a car in the first place.  A car loses 10% of its value the moment you drive off the lot.  A car is a money pit...pure and simple.  I don't care if all I ever spend money on is basic maintenance...I will never make any money off of it.

 

Domestic cars have been and will be pieces of crap.  Ford/GM/Dodge need to get their collective heads out of their asses and learn how to actually build cars again.

[#Michael]

OP, I don't know you from Adam, but I will say this: Do. Not. Lease! For me, a nearly 50 year old guy, I have one main principle when buying a car: Pay for it all up front or do without. NO exceptions. I don't even finance. With leasing, ask yourself this question: Do rich people lease? No, poor people do.

 

Explain How A Car Lease Works

 

QUESTION: Listener asks Dave to break down the mathematical flaws in a car lease.

 

ANSWER: A car fleece is basically renting a car. You pay $400 a month and at the end of the new car lease, you turn it back in. If you want to buy it, you are buying it for what they estimate at the beginning of the fleece to be the market value. At the end of the lease, it

[Joe User]

OP, I don't know you from Adam, but I will say this: Do. Not. Lease! For me, a nearly 50 year old guy, I have one main principle when buying a car: Pay for it all up front or do without. NO exceptions. I don't even finance. With leasing, ask yourself this question: Do rich people lease? No, poor people do.

 

Explain How A Car Lease Works

 

QUESTION: Listener asks Dave to break down the mathematical flaws in a car lease.

 

ANSWER: A car fleece is 

 

 

 

Stopped reading there. 

 

A lease can make financial sense in some situations. Especially if you have a 2 year $250/mo lease and it comes with 2 years included maintenance. Mostly, if you want a new car every few years and don't care about owning, it's not a bad deal. Take the time to actually research the lease deals, ask the dealer what the money factor is and calculate how much the lease costs vs how much owning would cost, going under the assumption that the car is going to be gone after two years. 

[#Michael]

Stopped reading there. 

 

A lease can make financial sense in some situations. Especially if you have a 2 year $250/mo lease and it comes with 2 years included maintenance. Mostly, if you want a new car every few years and don't care about owning, it's not a bad deal. Take the time to actually research the lease deals, ask the dealer what the money factor is and calculate how much the lease costs vs how much owning would cost, going under the assumption that the car is going to be gone after two years. 

Exactly...most car companies include 2 yr no cost maintenance now.  And depending on the leasing terms, it may be a better option than owning.

[Jub]

I'm currently driving "the new" Mazda3, which I bought about nine months ago. I've driven nearly 4,000 miles and it's an absolutely lovely car. I can wholeheartedly recommend it. It's pretty fun to drive, it feels really stable and solid, and it's quicker than most competing cars at a decent MPG.

 

There are two quirks which can annoy the heck out of me at times, but I don't know if it's specific to my particular car or not: the GPS can (rarely) lose track of you for a couple of minutes and the network connectivity (using your mobile as a hotspot) is wonky at best.

 

Apart from that it's genuinely awesome. Perhaps worth saying that I'll be changing car soon-ish though. While I love my Mazda3, I'm looking for something tighter, faster and more fun to drive. It's not strictly necessary, but the girl and I are going to be out on a lot of road trips through Europe and such, and we want to enjoy the ride to the most. We don't have kids and such so we currently prefer joy over value. I don't know how old or what kind of driver you are, but keep it in mind at least.

 

Also, buying a new-ish car might be more expensive than buying an old car, even considering maintenance and repairs of the older one, but there is an even more important factor to keep in mind: security. A 20-year old vehicle is considerably more dangerous to drive than a recent one. We all hope and some might pray that nothing will happen, but in my case I'd rather be safe than sorry when possible.

 

Oh, and carbon emissions.

[Jim K Global Moderator]

You don't ever get any equity out of a car in the first place.  A car loses 10% of its value the moment you drive off the lot.  A car is a money pit...pure and simple.  I don't care if all I ever spend money on is basic maintenance...I will never make any money off of it.

 

Domestic cars have been and will be pieces of crap.  Ford/GM/Dodge need to get their collective heads out of their asses and learn how to actually build cars again.

 

I agree.  However, what do you get after a lease?  At least after you pay the car off you own the car.  At some point, you will have equity in the vehicle (i.e it is worth more than what you owe).

[T3X4S]

I agree.  However, what do you get after a lease?  At least after you pay the car off you own the car.  At some point, you will have equity in the vehicle (i.e it is worth more than what you owe).

 

As mentioned, a lease does make sense in some situations - for example, the situation I mentioned where the person only kept the car for 2 years than returned it for something else - and repeated the process.  In that case, a lease is the only way to go.

[Jim K Global Moderator]

 

As mentioned, a lease does make sense in some situations - for example, the situation I mentioned where the person only kept the car for 2 years than returned it for something else - and repeated the process.  In that case, a lease is the only way to go.

 

Well yea, I agree.  If you always want a car note...a lease is most certainly the way to go.

[T3X4S]

Well yea, I agree.  If you always want a car note...a lease is most certainly the way to go.

Not that you "always want a car note" - its that there are other things that are more important to some people.

To some people - the only thing to consider is getting a car they want, driving it for a short time, then as soon as they get tired of it, they trade it in and walk away from it with another new car.  The fact "they dont own it " and "you have to make payments" doesnt matter.

They want something nice, dont want to keep it for long because there will be something else in 2 years they will want - so what is the smartest way to do that ?  lease.   

Thats all I was saying.  It makes sense in some situations -

The comment of "thats what poor people do"   LOL - well that person has a lot to learn. - only problem is he is 50 years old... might be too late.

 

[Jim K Global Moderator]

Not that you "always want a car note" - its that there are other things that are more important to some people.

To some people - the only thing to consider is getting a car they want, driving it for a short time, then as soon as they get tired of it, they trade it in and walk away from it with another new car.  The fact "they dont own it " and "you have to make payments" doesnt matter.

They want something nice, dont want to keep it for long because there will be something else in 2 years they will want - so what is the smartest way to do that ?  lease.    Thats all I was saying.

 

Jesus F. Christ.  I'm well aware of the pros/cons of owning/leasing...no need to lecture and/or nitpick.

 

The OP did not state how long he intended on keeping the car nor did he state a price range.

 

So, I based my opinion off the fact that the OP has owned his current car for 6 years.  If you intend on keeping a car for that length of period...you are (more likely than not) better off buying.  Period.

[T3X4S]

Jesus F. Christ.  I'm well aware of the pros/cons of owning/leasing...don't lecture me.    

 

The OP never stated how long he planned on keeping a car (nor did he state a price range).

 

So, I based my opinion off the fact that the OP has owned his current car for 6 years.  If you intend on keeping a car for that length of period...you are better off buying ... not leasing.  Period.

I thought you were trying to be kind of passive/aggressive with the "well sure if you always want a car note" comment - so I was trying to be clearer. 

I haven't slept in about 20 hours and thoughts are making it all the way to the fingertips.

How did you know my name ?  (got the middle initial wrong though)

[Jim K Global Moderator]

I thought you were trying to be kind of passive/aggressive with the "well sure if you always want a car note" comment - so I was trying to be clearer. 

I haven't slept in about 20 hours and thoughts are making it all the way to the fingertips.

How did you know my name ?  (got the middle initial wrong though)

 

Well...if you want a new car every couple of years...then yes...you'll have a car note every month (really doesn't matter if you want it or not).  So...my comment "well sure if you always want a car note" is no more or less incorrect regardless of how you perceive it.  

[T3X4S]

OK I guess we are both misunderstanding one another - and it might be because I cant think clearly.  I know your statement was correct - no way to argue that. 

What I thought was you were saying it like, "well sure if you want to be attached to something crappy - then, yeah! go for it !" -

Meh, regardless - it doesnt matter - I need sleep - hopefully, tomorrow I can make more sense than my 90 yr old grandmother after a Vicodin & Crown Royal cocktail.

[#Michael]

I am soo not sure why or when this thread descended into a flamewar of owning vs. leasing (which I don't want to get into).  I was just looking for some opinions on a couple of makes/models.

 

That being said I took another test drive of the 2016 Mazda6 GT last night and it is one sweet ride.  Choosing between it and the Legacy 2.5i Limited is not going to be easy.

[sc302 Veteran]

I would go with the legacy. Cabin noise and road noise increase with the Mazda. When a friend got in my altima coming from his Mazda 6, he said "so this is what it sounds like when you don;t hear every rattle or the noise of the road". I was a little floored when he said that. I have never been in a Mazda, but that is a common complaint from owners. Here is something to ask current Mazda owners that have owned their cars to 80k miles (sorry new car buyers this isn't a question for you being that new cars are always nice to have), would you buy another right now if you had to? That should tell you everything you need to know about them if you plan on keeping it long term. I personally have never met anyone who had their Mazda long term say that they would defiantly buy again and they are a Mazda owner for life.

Edited March 25, 2015 by sc302
added "don't" in the quote...posting from phone sucks

[Draconian Guppy]

I would go with the legacy. Cabin noise and road noise increase with the Mazda. When a friend got in my altima coming from his Mazda 6, he said "so this is what it sounds like when you don't hear every rattle or the noise of the road". I was a little floored when he said that. I have never been in a Mazda, but that is a common complaint from owners. Here is something to ask current Mazda owners that have owned their cars to 80k miles (sorry new car buyers this isn't a question for you being that new cars are always nice to have), would you buy another right now if you had to? That should tell you everything you need to know about them if you plan on keeping it long term. I personally have never met anyone who had their Mazda long term say that they would defiantly buy again and they are a Mazda owner for life.

I own a mazda 3 2010, around 40k down the road. ###### that is one rattle machine, everything creeks, I wouldn't want to own it in the long term though... it's been a noisy from day one, but that is in part due to their "tight" suspension...  cousin owns a 2011 mazda 6. Same juice as well, noisy mofos. That said, i've driven, Kias, Hondas and toyotas 2010ish and Mazda just seems "funner" to drive.