New car / automobile buying & leasing tips for CPK'ers

Packerrat said:
Thanks for putting this together Matt. Lots to digest.

I may have missed a statement, or simply failed to connect the dots as I skimmed (pre-coffee imod) but why is the lease to buy option advantageous, other than sheltering you in case of an unfortunate event that damages the car? My caveman mind can't get past the idea that if you are paying the depreciation on the lease, don't you end up paying the same amount in the end? Or is this process a route to avoiding interest on a loan for the full value of the car- so that ALL you are paying for is the depreciation those first three years, and not paying interest on that extra $18k (first three years of depreciation value) as in your Tacoma example?
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Your monthly lease payment is actually Depreciation + Finance Charge. I don't always advocate leasing when it comes to car deals (honestly nothing beats the old fashioned dogged way of seeking a very well maintained and barely used car say a mere few years old from a PRIVATE PART SELLER, but seriously how often does that happen?!) but I recommend leasing over buying with the exception of some very very rare cases when it comes to new car deals.

Apart from the points which you mentioned you can walk away at the end of the lease if you don't like the car instead of having to deal with selling it on your own or if you have a penchant for just changing your cars every few years. Plus if you own your own business, your CPA may come up with more tax saving ideas but that's a point you will have to discuss with your tax professional.

Let's not forget that I also had stated that it is often a very good idea to foresee the ability to buy that leased car at the end of the lease if you should like it so effectively you are leveraging your purchasing ability and paying for all of it down the road. Of course in such cases, you have no control on interest rates on a used car a few years down the road so there's also that unknown unless you have the cash on hand to pay off the RV balance.

Personally speaking in my later years as I have gotten out of the business, I lease for 3 years first and then I buy back. I tend to keep my cars for 5+ years from their new rubber-meets-the-road day and since as my kids are now grown and in the age range that they ought to be thinking about establishing their own families, my autos have been known to get passes down ;)
 
mpjustin said:
Sorry to hear this Justin, that sucks.
You may have already looked into this but some extended warranties has a “if you don’t use them by the the end of the term you can get them refunded”. Not sure if this applies but may be worth looking into.

I have a buddy that works As a Business Manger in a Subaru / BMW dealer group and can make some inquiries if you like. Feel free to text me some details and I can do some digging. Maybe there is a loop hole.

And nice work Casinostocks Casinostocks I agree with your points / rules, especially about considering leasing if you have done your research on the brand around residuals and resale value. I think of it like an extended test drive with more options at the end of the term. My wife’s last Honda Odyssey we bought out then traded back into the same dealer and had approximately $5,500 equity after. Keep in mind that everyone’s situation is different. In the example above we only had 36,000 km’s after 4 years so it was very low mileage. (We live on an Island)
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This is a prime example of a case when I had facetiously mentioned in my OPs that "they pay you to drive their cars" ;)
 
To those of you who may be eyeballing a new auto purchase, feel free to PM me if you get some form of an offer from your local car dealer while mulling over. I can do some research at my end to see if you're being given the honest and straight skinny on things. Those of you who are embarking on such a venture with your BETTER HALF, be aware of my RULE #1 that although counter intuitive, you are not payment shopping but deal shopping. Ladies + Auto will inevitably = what's the payment right off the bat! In order not to be taken advantage of, you must be mentally tough to not shop around for a payment and also to educate the good Missus about this very important factor.
 
Here's a very simple way of working out a BALLPARK monthly payment on a purchase (not lease as I have demonstrated that lease payments calculations are more complex):

Take the asking price / sticker price / MSRP and assume that you can do a deal to get your car purchase for that number OTD (out-the-door with all fees added and tacked on). Let's call this number P. Then you estimate your down payment / perceived trade-in value (equity) and call this D. Then assume that the finance Co out of the goodness of their heart is giving you an interest free loan (never gonna happen but we're talking quick on your feet mental math, even if fuzzy). Lastly the number of months (term) you wanna finance, say 48 / 60 or whatever and call this T.

So the number rattling in your head will be [P - D] / T = $xxx. Of course this is over simplification and kinda best case but this prevents you from answering to what payment you can afford and also prevents you from looking to pay $250 for what will realistically cosy you $600 per month!

Another point, you see all those lease commercials for dog low monthly payments? Read the fine print and you often see things like $4000 down for your Capitalization Cost Reduction (down payment) and remember what I said, go for the higher monthly and don't pay that D upfront joust because of cases like Justin's if that happens to you too and depending on how good the insurance Co is. Ultimately it depends on how much fiscal discipline you have to keep that lump sum D for a rainy day.
 
A lot of good reminders here. I've done plenty of car buying over the years, and fortunately Mrs. fromMT is pretty dang smart about all this, too. This week we learned that her daily driver needs about $2600 in repairs. In my experience, the car is not going to be worth that much more after putting the money into it than before. The upshot is that we are now looking at cars again. Debating new versus used. I'd prefer new but more economy minded, she'd prefer used but a premium brand. We have to work out our own dilemma before stepping onto a lot, I suppose.

Sucky think is this blew our spring break plans right outta the water...
 
Some links for you smart shoppers. I don't take everything on these sites as gospel, but I often peruse 'em nonetheless just to update myself with the current trends:

https://cars.usnews.com/cars-trucks

New deals: https://cars.usnews.com/cars-trucks/best-car-deals

Lease: https://cars.usnews.com/cars-trucks/best-car-deals/car-lease-deals

Used deals: https://cars.usnews.com/cars-trucks/best-car-deals/used-car-sales-and-deals

You can also try KBB.com and also Edmunds.com but be aware that if you give any of these sites info, you will be spammed and contacted by selling dealers. The best way to cut out the middleman is to email the dealer's Internet sales manager / Team directly and start from there without having to go in to chase lot lizards! On Edmunds, you can search various forums related to the makes / models which you're after and the Mods seem to be really cool giving you the current RV & MF for what you desire, once you post your State of domicile.

I'll probably add some more thoughts in OP #3 which I had created as a requiem for Justin's BMW but really as a post place holder ;)
 
Interesting thread. IMHO, when you go lot a dealer to buy a new car, take a tube of KY with you. Most car salesmen like to play a game. Very few dealers post a fixed price on the window. There is a Nisson dealer near here that did that. It didn't last long. I think car buyers like to think that they played the game and won.:rolleyes:

In 1988 we were looking for a new car. We keep them for a long time, but new. We decided on a Camry. I worked for Xerox and the fleet department would send you a printout of the actual dealer cost. I took it to the local Toyota dealer and showed it to the salesman. He said that we could make a deal. He left the room and showed to the sales manager. The manager came in and blew a gasket. "Where did you get this? You're not supposed to have this! I can't sell you a car for this!" The salesman apologized and we left.

We went to another Toyota dealer in Ventura. I showed the printout to a salesman there. He took it to the sales manager and came back. He said that he couldn't sell a car for that. It's true that there are incentives and such from Toyota, but if they sold cars at dealer cost, they would go out of business. He gave us a price that was $650 over the bottom line on the printout and we left with the car. We had it until 2002 when it was read ended and totaled.
 
Another tip that works for me is buying at the end of there year normally it’s in December. Dont be afraid to walk away a lot of time they’ll
Call you back with the price you wanted and the best advice iv ever recived was from my dad if you not embarrassed by your offer it wasn’t low enough lol I put these tools to work this year and it worked out great!!!
 
Uffda:

Franchise dealers have two different costs, one is the invoice from factory which they even go to the length of showing you because they want to show you that they are making you a “great deal” by selling you at that invoice which they can falsely claim to be their absolute cost but here”s the kicker; that’s really not theor net bottomline cost. Franchise dealers get “back end $$$” from the factory based on theor performances and the volumes which they move, and that determikes the actual net cost or pretty darn close to it. Very few in the dealerships know those numbers and in some cases even the sales manager is not privy to those figures; the owner, CEO / CFO and the general manager are typically the only ones in the loop.

Auto dealerships as much loathed as they can be, they’re still commercial enterprises which employ a multitude of people and offer products & services which most people need,.My objective for posting a few tips is not to show you how to beat the dealer because by and large you will not be able to! Just conveying some learned pointers to be better equipped to tread the car buying mine fields better :)
 
The Shatz said:
Another tip that works for me is buying at the end of there year normally it’s in December. Dont be afraid to walk away a lot of time they’ll
Call you back with the price you wanted and the best advice iv ever recived was from my dad if you not embarrassed by your offer it wasn’t low enough lol I put these tools to work this year and it worked out great!!!
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Better dealmakings at the end of the day, weekends, end of the month, end of the Summer Solstice and end of the year are all myths :) because of what I said in my previous post, i.e, certain numbers must be attained to get that nice backend $ so if someone is willing to make a deal, they are there to make a deal no matter when, unless they are being run by un professional emotional basket cases :confused:

The key is to have the discipline top walk away, absolutely. Most often they will call you back and then if you wanna be even a bigger arse, you can leverage them more, like saying oh I forgot to tell you about my trade-in which I incidentally need lots of money for :D
 
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