Should I buy out our leased car?

[SunnY S]

I have old guys (and guys like you) who come in every 3 years to buy the same Camry they bought the last time.

They are not "like me", even more foolish is buying a new car with cash every 3 years.

Me and others have been advocating keeping the car as long as possible. My previous car was 14 years old, and I still sold it for a decent dollar (thanks to the power of Honda resale)

The current vehicles in my stable are going on 7 years and 10 years. They both still look and drive like "new"

When I do the math, I shudder to imagine how much cash I would have blown on lease payments, first year depreciation, down payments, interest, extra silly fees, and re negotiating new leases and pizzing even more money away.

 

[mimico_polak]

4 and 5 years works too depending on the car....but that assumes no value in having a new car. Some people just want one. If we were all just going for lowest cost we'd all be driving 20 year old corollas. But we don't.

Reddit PFC agrees with you. 20 year old Corollas for all….better if they’re 30 years old.

I fit the profile of ‘I probably should be leasing’ IF I bought new cars. I did once, and the depreciation made me sick. So now it’s 2-3 years old at the very least. The WRX was the most recent as it was 2 years old, but somehow I traded it in for what I bought it (not including tax) and on paper. It’s still for sale by the dealership that screwed my Volt.

I’ve always considered leasing but being taught to own things has been drilled into me for years and I just can’t pull the trigger. I typically pay off my cars within 2 years….drive for an additional 2-3 years with no payments, and then buy something else. I try to keep my delta around the 15k mark as payments are fairly easy in this range.

Best advice I got was from my mortgage broker. “Even if your car is paid off, keep paying into a fund as if though you have car payments. Then when it’s time to trade you have plenty cash to buy it out. The majority of financial issues I see, and hindrance to home ownership, is people stuck in long car payments that don’t allow them to buy a house.”

Volt was bought and is paid off. Been putting away money every month for a future car anyway.

Not to derail but I’d be better off investing that money.

 

[Lightcycle]

They are not "like me", even more foolish is buying a new car with cash every 3 years.

Me and others have been advocating keeping the car as long as possible. My previous car was 14 years old, and I still sold it for a decent dollar (thanks to the power of Honda resale)

The current vehicles in my stable are going on 7 years and 10 years. They both still look and drive like "new"

When I do the math, I shudder to imagine how much cash I would have blown on lease payments, first year depreciation, down payments, interest, extra silly fees, and re negotiating new leases and pizzing even more money away.

The decision of whether to buy a new car every three years, or to keep a car for 14 years, or to buy a 2-year old car and keep it for 3 years is a an entirely separate issue from leasing.

Yes, it is financially stupid to buy a new car every 3 years and take a hit on the steepest part of the depreciation curve. But that's got *NOTHING* to do with leasing.

Leasing is only paying for the portion of the usage of the vehicle's life. It makes better financial sense to do this rather than pay for all the incidentals like sales tax, and never recouping those costs back when you turn the vehicle in for another.

Also, It is entirely possible to lease a used vehicle and only pay for a much smaller portion of the depreciation.

Leasing has nothing to do with buying a new car ever 3 years.

 

[danp]

Have you guys seen what's going on with car prices these days? I was checking used car prices on the internet, and my own car is selling for more than I paid for it 2 years ago! I'm wondering if I should sell it and buy a beater. I'm tired of the stress that comes with owning a nice car.

‘The Market Is Insane’: Cars Are Sold Even Before They Hit the Lot (Published 2021)

A shortage of computer chips is keeping automakers from producing enough cars to meet rising demand. Used cars are scarce, too.

www.nytimes.com

 

[ChrisCBR]

Please do not buy it out with the intention to then sell it. You instantly lose 13%.
20k plus tax is $22600. plus a safety plus license transfer $50 plus the fee you are going to get charged.
And then (using numbers from this thread) maybe sell it for $25k? to net $2k depending on the fees?

Instead: sell it before you buy it out. Do the same things and advertise on auto trader and kijiji....DO NOT tell anyone it is a lease.
When you have your agreed price from the buyer....just bring them to the dealership for the paperwork. if you sell it for the same $25k you will put $4500ish (depending on the fee) into your pocket.....even better if you buy the junker you want from them as you'll not pay taxes on $4500 of junk. The equity on your sale of $4500 saves you another 13% so $5085 off of the cost of another car.

How do you get the tax break if you transfer the car privately? If its a lease you dont actually own it.

 

[ChrisCBR]

They are not "like me", even more foolish is buying a new car with cash every 3 years.

Me and others have been advocating keeping the car as long as possible. My previous car was 14 years old, and I still sold it for a decent dollar (thanks to the power of Honda resale)

The current vehicles in my stable are going on 7 years and 10 years. They both still look and drive like "new"

When I do the math, I shudder to imagine how much cash I would have blown on lease payments, first year depreciation, down payments, interest, extra silly fees, and re negotiating new leases and pizzing even more money away.

It also depends on the car. I would never keep a German car for 14 years. You make up the gap with the amount of money it can cost maintaining those things.

If you can get the right deal with little to no interest, it can be worth it to get a new car every 4 years. In the long run it costs more money but you get to enjoy new vehicles so it can be worth it.

 

[Relax]

It also depends on the car. I would never keep a German car for 14 years. You make up the gap with the amount of money it can cost maintaining those things.

Interesting. I buy German for the exact opposite reason, at least for BMW. I'm chasing more problems on my 2012 Subaru than on my 2001 M3, and maintenance parts are actually about the same if not more for the Subaru since I have to buy them from Subaru, whereas I can get OEM parts for the BMW.

 

[ChrisCBR]

Interesting. I buy German for the exact opposite reason, at least for BMW. I'm chasing more problems on my 2012 Subaru than on my 2001 M3, and maintenance parts are actually about the same if not more for the Subaru since I have to buy them from Subaru, whereas I can get OEM parts for the BMW.

The E46 is fairly reliable but are you daily driving it?
Ive never liked Subaru, their boxer engines are subpar imo.

German cars require much more maintenance long term imo. I know of quite a few people who all had have issues.

Ideal to get the best lease deal possible and get a new one every 4 years imo.

 

[SunnY S]

Interesting. I buy German for the exact opposite reason, at least for BMW. I'm chasing more problems on my 2012 Subaru than on my 2001 M3, and maintenance parts are actually about the same if not more for the Subaru since I have to buy them from Subaru, whereas I can get OEM parts for the BMW.

for every story I hear like this, there is a 10,000 more that go the other way.

 

[Evoex]

Do they?

i wonder. Do people in general just not follow the directions and when something fails and they see the bill it’s suddenly an issue.

Not going to say the Germans don’t over engineer things, certainly they do. But I can’t say for certain that it means more attention is required. Certainly means more things to break.

 

[Relax]

for every story I hear like this, there is a 10,000 more that go the other way.

I won't hold it against you that you don't like German cars (or is it that you only like Hondas), but I won't lie or exaggerate to get my point across. I use actual personal experience. Including the fact that my Acura is the only car I've owned that needed the motor replaced.

 

[SunnY S]

. Including the fact that my Acura is the only car I've owned that needed the motor replaced.

see my post before this one.

 

[SunnY S]

Have you guys seen what's going on with car prices these days? I was checking used car prices on the internet, and my own car is selling for more than I paid for it 2 years ago! I'm wondering if I should sell it and buy a beater. I'm tired of the stress that comes with owning a nice car.

‘The Market Is Insane’: Cars Are Sold Even Before They Hit the Lot (Published 2021)

A shortage of computer chips is keeping automakers from producing enough cars to meet rising demand. Used cars are scarce, too.

www.nytimes.com

.
.

Old cars with more than 100,000 miles are worth real money now

A lot of people still think that, once a car has been driven more than 100,000 miles, there's not much value left in it.

www.cnn.com

 

[800over]

How do you get the tax break if you transfer the car privately? If its a lease you dont actually own it.

you do not sell it privately....the dealer runs it through the books. You cannot sell a lease privately....you just bring them to the dealer. The equity you have is plus tax ONLY at the dealer you are running it through the books. You can do the same thing selling something privately that you do own...but most people don't know and leave a lot of cash on the table.

 

[Relax]

The E46 is fairly reliable but are you daily driving it?
Ive never liked Subaru, their boxer engines are subpar imo.

German cars require much more maintenance long term imo. I know of quite a few people who all had have issues.

Ideal to get the best lease deal possible and get a new one every 4 years imo.

The M3 has 310,000 km's and yes, it's a daily driver. Knock on wood, no bearing or VANOS problems. I've only used the mandated Castrol TWS 10w60, and with discount from the dealership, made no sense to take a chance on anything else. The only major problem I've had is the alternator went bad. Other than that, anything else has been wear and tear items.

 

[Relax]

see my post before this one.

Here's another for you Sunny - the guy I usually ride with just blew the motor on his Honda XR650L. Meanwhile my SXV 450 is still kicking ass and taking names after nothing more than oil changes.

 

[timtune]

You do 5-7000km a year so is a $20,000 car with likely full coverage insurance worth it?
I'm guessing no. My opinion is buy a decent beater for $5000 or less and just have liability insurance on it. Saving a ton of money and not worrying about scratches or dings.
If you ever have to take a long trip and need something more reliable then you can just rent something.

This makes perfect sense to me. FWIW my son just bought a 2013 Matrix for 7500$. It would likely do everything you need for the next decade except maybe look good in your driveway. Would an extra 10K for bike stuff make that right?

 

[Deleted member 50930]

The demand for used cars is very high. PLUS side is you can get rid of that accident car for a decent profit right now but if you need another car it gets complicated ^_^.

 

[mimico_polak]

This makes perfect sense to me. FWIW my son just bought a 2013 Matrix for 7500$. It would likely do everything you need for the next decade except maybe look good in your driveway. Would an extra 10K for bike stuff make that right?

That car will do everything he needs and more. Hell the back is big enough to have sex in. Mind you so is a Genesis Coupe!

Ah to be young and nimble again. Wife refuses to check out how comfortable the Odyssey is

 

[mimico_polak]

The demand for used cars is very high. PLUS side is you can get rid of that accident car for a decent profit right now but if you need another car it gets complicated ^_^.

I’m pretty sure I could sell my car today for more than I bought it for….but what the hell am I gonna buy after? LoL same as the housing market! Never goes down!

Cousin called me today he saw my car being taken for a test drive. Maybe the dealer finally found a sucker to buy my WRX.