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Lyesh posted:and you probably face restrictions in terms of what model you can get. Probably restricted to a model better than the no AC DX you linked.
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Jun 13, 2010 21:23
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Lyesh posted:No, because you have to find the value of the use of that $17000. The financier could have loaned out their money and gotten $1900 instead of what they're getting from the lease. I want you to take a step back and consider what has been posted so far. The Mazda3 that we just talked about MSRPed at about $17k, the same as this Civic you are talking about. The lease is $199/month/36month 0 down. Honda itself has a lease offer on a Civic DX for $159/month/36month/$1700 or so down. Now you are telling us with a straight face that it costs $347/month to lease a Honda Civic DX. I guess I agree that buying a Civic for $35k is a bad deal, which is what you seem to be suggesting.
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Jun 13, 2010 21:30
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hobbesmaster posted:Probably restricted to a model better than the no AC DX you linked. That's quite true. I'm starting to think that we need to know what lease buyouts typically are to say anything for certain about whether leasing makes any sense for somebody intending to drive their car into the ground.
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Jun 13, 2010 21:30
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Throatwarbler posted:I want you to take a step back and consider what has been posted so far. The Mazda3 that we just talked about MSRPed at about $17k, the same as this Civic you are talking about. The lease is $199/month/36month 0 down. Honda itself has a lease offer on a Civic DX for $159/month/36month/$1700 or so down. Sure, in the same way that it costs MSRP to buy one. We also have to consider how likely it is for somebody to get the promo lease (I mean, do you need an 800 credit score or something) and whether or not that lease is a borderline bait-and-switch tactic.
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Jun 13, 2010 21:32
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Lyesh posted:Sure, in the same way that it costs MSRP to buy one. We also have to consider how likely it is for somebody to get the promo lease (I mean, do you need an 800 credit score or something) and whether or not that lease is a borderline bait-and-switch tactic. Yes, because if your credit score is below 800, it actually costs you $35k to buy a base model Honda Civic with a MSRP of $15k. :gun:
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Jun 13, 2010 21:37
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Just so we are clear, here is the lease for the Civic DX on Honda's website. I agree you should not lease a Civic DX for $347/month, because you can lease a base model BMW 328i or Audi A4 for about that much money. I have no idea how the $347 is arrived at(granted I followed the link and there it is) and I'm not particularly interested in finding out.
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Jun 13, 2010 21:48
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Throatwarbler posted:Yes, because if your credit score is below 800, it actually costs you $35k to buy a base model Honda Civic with a MSRP of $15k. :gun: As it turns out, I'm dumb and didn't read all the fine print on the special lease offer. Here's the relevant bit: quote:2010 Civic Sedan 5 Speed Automatic VP (Model FA1F3AEW) for $159.00 per month for 36 months with a $1,240.00 capitalized cost reduction available to customers who qualify for the HFS Super Preferred credit tier. Adding the $5724 in payments to the $1240 cap cost reduction gives us $6964, which is around the $7k in depreciation that the market would give us. So, yeah, special lease offers can be better than buying outright v  v, assuming that you can't get that car much below $16,400 if you're taking out a loan.
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Jun 13, 2010 21:54
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Lyesh posted:As it turns out, I'm dumb and didn't read all the fine print on the special lease offer. Here's the relevant bit: If you have bad credit, you will also not be able to get the best interest rate on a loan, either, and you can haggle on the price in a lease too. Leases are based on price too. I'm just completely bewildered by the $347/month. How bad does your credit have to be for them to literally charge you(you in general, not you forum poster Lyesh) more than twice the list price, and for you to take it? 
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Jun 13, 2010 22:02
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Throatwarbler: Just want to say thanks for opening my eyes on this a bit. Ever since I read your post in AI (I think), it's changed my eyes on leasing versus buying. Some of you need to realize that he's NOT arguing against leasing a new car versus buying a 2-3 year old used car. Everyone knows that the 2-3 year old car is the better deal in the end. This isn't the earth-shattering news that some of you make it out to be. Quick question for you, just to complete my understanding of this. If you're interested in leasing a car, you would want to negotiate for both the lowest buy price as well as the lowest buyout price, correct? So you could lose ground on one to make some up on the other?
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Jun 14, 2010 17:41
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Leases are also great if you don't want to keep a car for longer than a year or so (because you move very frequently for jobs reasons, for example, and you pay more per year in car transport fees than gas) but can't justify renting a vehicle every time you need it.asdf32 posted:Disagree strongly here. I think Hyundai and Kia are the best buys because their reputation doesn't match their quality. They have both been putting out great cars for 5+ years in my opinion and only now are people realizing it. This makes them the best used car buys. Quality and reliability numbers are proving this out and consider those warranties has huge votes of confidence by these companies for their products. Five year old Hyundai's will be priced the same as 8 year old Hondas and have less miles.
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Jun 14, 2010 18:21
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Residency Evil posted:Quick question for you, just to complete my understanding of this. If you're interested in leasing a car, you would want to negotiate for both the lowest buy price as well as the lowest buyout price, correct? So you could lose ground on one to make some up on the other? Yes, you should negotiate the lowest buy price. As for the buyout price, there are a number of things to consider. If you have a higher buyout price, you are paying less in depreciation (depreciation is the difference between buyout and purchase price divided by the number of months) but more in interest, since you are paying off less principle on the loan. If on the other hand, you go for a lower buyout price, your monthly payments are more, but you'll pay slightly less in interest, plus at the end, if the market value of the car is higher than the buyout, you could sell the car and recover some of your payments (it's not really a "gain", since you're just getting back extra depreciation that you paid for but didn't happen. I guess the concept would be similar to having "equity" in your house). You could do a spreadsheet to model how exactly each variable affects your bottom line, but I think it's probably easier to just take the buyout price as given and negotiate on the purchase price. Now I'm of the opinion that car dealers are pretty free wheelin' with what they can and can't do, but the general policy in most new car deals is that they move on the purchase price and the buyout is fixed, so it's probably an uphill battle if you want to change the buyout, for questionable gain.
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Jun 14, 2010 18:26
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^^^ You're over thinking this. In your car-lease-is-a-valuable-option mindset, you unambiguously want a higher residual; it lowers your payments and increases your option value. However, car lease residuals are set by actuarial models and are not negotiable, so it's kinda moot point.
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Jun 15, 2010 14:46
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I'm looking at a car, roughly $15K after tax and title. Fairly confident in the car, it's 2 years old with 30K on the clock. What I'm considering doing is taking out the minimum auto loan from the bank ($8K) and putting in the rest in cash. That would leave me, at this point, with a cash reserve of $9.5K. Minus insurance expenses and whatnot, probably closer to $8K. I'd be taking out a longer loan (48mo) to keep the initial payments low, but would pay it off really early--as in, after tax time as I should be able to have enough cash on hand at that point to pay it off and keep a healthy reserve. Bad idea?
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Jun 15, 2010 15:13
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Matlock posted:Bad idea? Sounds pretty solid to me. Pay it off quickly and take good care of her, and you should have reliable transportation for years.
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Jun 15, 2010 15:14
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Something about the lease vs buy thing is that with buying you can use the https://www.costcoauto.com program to get cars for dealer invoice with *NO* negotiation. I know a lot of people who despise cars salesman or who are not good at bargaining and rather skip the whole process altogether.
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Jun 15, 2010 19:29
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Omegaslast posted:Something about the lease vs buy thing is that with buying you can use the https://www.costcoauto.com program to get cars for dealer invoice with *NO* negotiation. I know a lot of people who despise cars salesman or who are not good at bargaining and rather skip the whole process altogether.
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Jun 21, 2010 18:22
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This may be better suited to the AI sub forum, but I'm in a bit of a predicament with regards to my truck. Water is getting into the combustion chamber of my 96 Toyota T100, and my mechanic thinks it could either be the heads or a crack in the block. He's thinking a rebuilt might be the best option, because I could spend a bit of cash getting the heads fixed only to find out it's the crack in the block that's letting water in. So I'm left with the dilemma of spending the money keeping my 14 year old truck running, or spending twice (or 3) times as much getting a newer (2000 - 2005ish) truck. I love my truck, and while there are a few things wrong with it (bit of rust, ac/heater not working, dog chewed a few of the console knobs) it gets the job done. I'm just hesitant about rebuilding the engine only to have the transmission or timing belt need replacing in a year. I plan on getting a few quotes for the rebuilt engine, as well as the cost of any major work that might need to get done within the next 2-3 years (just had the front ball joints done, but as I mentioned, I'm not too confident in the transmission or timing belt, as well as possibly new leaf springs). How should I compare these costs with a newer truck. I'm trying to look at this from the best dollars and cents point of view. If I can keep my current truck running at half the cost of a newer used truck, is it worth it to start looking at Craigslist ads?
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Jun 28, 2010 02:36
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So the huge debate that happened as a result of my previous question was excellent, sorry I didn't reply again but I didn't want to interrupt it. One thing that stuck out though is the assumption that I have 0 cash savings, which isn't actually true. I have an "emergency fund" ie enough money in the bank to live for at least 3 months or so and when I said I had "no money" it was in regards to money I could spend on a car. Also in my current living situation I am spending a ton of money on what would probably be considered "blow" in this forum but am saving at least $1000 a month. I agree with the people who said it would be much better to save for a year and then buy a 10-12k car with cash but what do I do in the meantime, buy a $2000 car and hope it doesn't break down? I think I'm fairly mechanically savvy and can do things beyond basic oil changes but to me the prospect of being left stranded somewhere by a broken car is far worse than having to deal with actually repairing anything. So to take this back full circle I present an new situation: my dad's car lease on a 2007 Impreza is expiring at the beginning of august and I have the opportunity to buy it out for $11,500. It has 13,000 miles and is in perfect condition basically. Also my parents offered to give me $1000 for the down payment and cosign on a loan if it gets me a better interest rate than what I can get myself (they can get 5% I think at the credit union). So figuring the $1000 of my own money I'd also put down will about cancel out the taxes and registration fees, my loan amount would be about $10,500 and my monthly payments on a 36 month loan would be about $315. I would plan on basically driving this car into the ground and hopefully keeping it for a decade or longer. To me, it seems the downside is "what if you lose your job and can't make payments" and yeah, there is always that risk, but I am saving money every month and feel that I'm a pretty employable person at the moment. If I came to a worst case scenario where I couldn't afford the car I would just sell it. Looking at craigslist right now I see 3 Imprezas exactly like this one for 13-15k and they have 30-50k miles on them. Tell me why I'm retarded for wanting to buy this car.
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Jun 30, 2010 02:50
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artard posted:....buy a $2000 car and hope it doesn't break down? Just an anecdote, but three years ago my wife paid $2500 for a '95 impreza. We put ~$125 into a new timing belt (yay ebay), $300 into tires, and that's about it. Hasn't broken down once, so no problem there. Most of my friends bought ~$3k cars many years ago and are still driving them, with no major issues. Of course, the plural of anecdote is not fact. Just sayin'... The other fun thing about beaters like this is that you don't give a crap when people door ding you at the mall, run into your rear end when the light turns green and you weren't on the gas yet, or whatever. It's so fun to not give a drat about your daily driver. artard posted:my loan amount would be about $10,500 and my monthly payments on a 36 month loan would be about $315. I would plan on basically driving this car into the ground and hopefully keeping it for a decade or longer. If you decide to go this route, I'd just personally push for you to plan on paying it off much sooner than the 3 years and maybe put that $315 away for car maintenance/replacement. But that's just me. artard posted:Looking at craigslist right now I see 3 Imprezas exactly like this one for 13-15k and they have 30-50k miles on them. Tell me why I'm retarded for wanting to buy this car. It's definitely a good deal, you just gotta make sure it fits into your financial goals. Only other thing is to see what else you can find for the money you plan on spending, and make sure you get the best deal and a car you like (especially if you're planning on living with it for a decade). I've kicked myself more than once when I found out some dude was selling a really awesome car for less than I just bought a really mediocre car for - not that a 2007 is "really mediocre". one last thing... artard posted:If I came to a worst case scenario where I couldn't afford the car I would just sell it. This always sounds easier than it is. Last year it took me a little over 4 months to sell a 2002 WRX for $2k under KBB "good" condition. A lot of people on the car forums in the state are complaining about the same thing.
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Jun 30, 2010 03:25
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I agree with shredwithpiks that you seem to have an overinflated sense of how unreliable a used car will be. Personally I think $2k is on the low end but you can certainly still find a decent running car for something close to that. Cars don't just magically break down; they break down because something wears out and breaks, and if you pick a reliable model and do your preventative maintenance, you can prevent most of the likely breakdown scenarios before they happen. I'm not saying there isn't any risk, it's just not as bad as it seems like you think it is. And having your car break down is not the end of the world. It's inconvenient, but if you bother to get roadside assistance on your insurance (which is incredibly cheap and well worth it) you are often only out a couple hours of your time, and worst-case scenario, you have to get a repair done and you rent a car in the meantime. You'd have to break down a hell of a lot of times to make up the difference between a reliable $4k to $5k beater, and an $11k 2-year-old low mileage '07 or (especially) a brand new car. All that said: the impreza does seem like a good deal, especially if your parents are happy to spend a grand to help you out.
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Jun 30, 2010 05:49
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What's a good ratio of car payment to income? I might be looking at buying a truck soon, and although I was originally looking at a 3-4 year old truck with low km's, the American companies are selling their trucks for cheap. I'm finding alot of 05-07 trucks on the market are the higher trim lines, whereas base trim lines of the 2010 trucks are only a couple grand more.
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Jul 4, 2010 08:09
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Zero. Zero is a good ratio. Jesus. Don't shop for cars by monthly payment. If you need a car and don't have the cash for it, buy cheap and take out the smallest loan you can manage.
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Jul 4, 2010 16:01
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Fiancé and I are selling two 14 year old cars and are planning on buying a slightly used car (2009ish). Does anyone know what a good target is in terms of percent of annual income to price? I do NOT mean monthly payments/DTI, but are we being too spendy by spending 15k on a car? To be clear, we are going to be paying cash and just want to get a sense of how much income one should have to justify this.
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Jul 4, 2010 16:49
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I'd say if you have made your retirement contributions, met your other savings goals, and won't cut into your emergency savings, any additional money you have is for spending on whatever the hell you please. It doesn't depend on your income but on how much cash you have saved. From the other side of the question, I'd say $15k is pretty reasonable for a car. This changes if you have neglected to mention some credit card debt or something. In that case maybe you should be paying off the debt with $10k and buying a $5k car.
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Jul 4, 2010 16:59
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Thanks, that is sort of what I was thinking. I have maxed 401k and IRA to federal limits (as has she) and we still have plenty of cash left over. I feel totally comfortable paying for the car, but it starts to get into a sort of nebulous big picture budget question. How much should I be saving for retirement, possible house downpayment/rennovation, big expenditures like vacation, are there any other big ones I am missing here? This goes beyond the scope of this thread, but I am curious to see goon's budgets for this stuff (not month-to-month). Maybe I'll start a longterm budget thread.
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Jul 4, 2010 17:14
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slap me silly posted:Zero. Zero is a good ratio. Jesus. Don't shop for cars by monthly payment. If you need a car and don't have the cash for it, buy cheap and take out the smallest loan you can manage. Your right. I just started doing independent sub-contracting, so I think my biggest problem is to start separating personal and business income a bit better ect ect, but that could be for another thread. I have personal mutual funds and stuff, but at this point it's more of a cash flow issue. Just invested a lot into tools and my truck just died. I need a truck for business, and although I personally have about $5-6 for a truck, I was looking at financing a brand new truck for it's warranty and image. (It sounds vein, but image means alot in the area I'm selling jobs (unless your a landscaper I guess). Reggie Died fucked around with this message at 17:47 on Jul 4, 2010 |
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Jul 4, 2010 17:44
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Well, I see where you're coming from. I still suggest you try to keep it cheap. How much is a $6k truck really going to damage business considering you already have a good rep? If you get a newer truck, don't go overboard just because you're able to get a loan. That monthly payment seems low at first but really starts to eat at you after a while. See what you can comfortably manage with a 3-year loan, don't stretch it out any longer than that, and be sure you get a good price on the truck and a good interest rate.
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Jul 4, 2010 17:58
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slap me silly posted:Well, I see where you're coming from. I still suggest you try to keep it cheap. How much is a $6k truck really going to damage business considering you already have a good rep? If you get a newer truck, don't go overboard just because you're able to get a loan. That monthly payment seems low at first but really starts to eat at you after a while. See what you can comfortably manage with a 3-year loan, don't stretch it out any longer than that, and be sure you get a good price on the truck and a good interest rate. I see your point, and I think I oversold how important image is in my last post. My main concern is with the reliability of a used truck. Up in Vancouver, $6k can buy you a late 90's F150 with ~150-200km on it. And I'm sure that'll last a long time. But I'm coming from a 96 Toyota T100, which I thought would be really reliable but has bitten me in the rear end over the 3 years I've owned it, despite proper maintenance ect. That's why I'm starting to look at 4-5 year old trucks with 50-100km. I'm just having difficulty finding such a truck that is significantly cheaper than buying brand new once you take into account the $9-$12k incentives that Ford and GMC are offering right now. I'm actually going to check out a 89 F150 later this afternoon, asking $1500 with under 100k. I can buy that with cash and start saving up for a newer truck. But right now I'm working 4 projects/7 days a week, and a few days without a truck can really screw up my timelines.
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Jul 4, 2010 20:03
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Having looked at new truck prices a bit, I see your dilemma. I suspect you can probably manage just fine with a $6k truck and use part of the uncommitted $300-400/mo to save for repairs. New cars can have problems too, you know. http://www.truedelta.com/ has high quality reliability stats if you're model shopping. If you do get a loan, I would suggest to limit the price to ~$15k, and make it a 3 year term. At least it sounds like you see all the angles though.
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Jul 4, 2010 22:35
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slap me silly posted:If you do get a loan, I would suggest to limit the price to ~$15k, and make it a 3 year term. At least it sounds like you see all the angles though. I'm doing my best to search out all the scenarios. Thanks for the feedback. You probably assumed this but whatever I do, I should be able to write off ~80% as a business expense, if that makes any difference.
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Jul 4, 2010 22:56
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No, I was thinking more like 20% and was ignoring it. I also don't know all the implications. So... factor that into what I said.
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Jul 4, 2010 22:58
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So, here is a stupid situation: While I was in school I drove a 2001 Ford ZX2. I financed it at the time because I really needed a new car (my previous car, a Jeep, had crapped out), and I didn't want to tap into savings or anything. I got a $4k loan at 4.5% and got 60 month terms, so my payments on the ZX2 are like $36/month. I just started a new job, and I'm driving more now so I wanted to get a nice new ride. I got preapproved for a $30k loan through USAA, decided on an Infiniti G35, found a beautiful lightly used one listed at $28k. I went to the dealer and proposed that they pay off the remaining $3,300 on my ZX2 and give me the Infiniti. They said they could do it for $31k. I thought this was a bad deal, so I just paid the $28k and kept the ZX2. Now, I have the ZX2 sitting there doing nothing and costing me $36/month. It still has a lien on it, although I do have the title. I would like to get rid of this thing and pay off as much of the $3,300 I owe on it while doing so. Blue Book for a private sale is around $3,200. Is there an easy way for me to sell this on eBay or craigslist or something despite the fact I have a lien on it? What other options have I? bewbies fucked around with this message at 15:44 on Jul 8, 2010 |
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Jul 8, 2010 15:37
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That loan is hilarious, do you have enough cash to pay it off completely? It is impressive that you've managed to get upside down on a car you paid $4000 for.
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Jul 8, 2010 15:55
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sanchez posted:That loan is hilarious, do you have enough cash to pay it off completely? It is impressive that you've managed to get upside down on a car you paid $4000 for. Yeah the guy I bought it from was...amused as well. That said I don't think I could managed a cheaper car for the last 9 months. $40 payment and $25 insurance! Over the last month I've had to shell out close to $5k for moving expenses and whatnot, so I'm not very liquid at the moment. The only way I'd have the cash on hand is if I tap into my retirement business and I'm not interested in doing that.
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Jul 8, 2010 16:01
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bewbies posted:Yeah the guy I bought it from was...amused as well. That said I don't think I could managed a cheaper car for the last 9 months. $40 payment and $25 insurance! I know this is not the best idea, but how about trying to get a balance transfer offer from some credit card company at a low interest rate, pay off the car, remove the lien, and then sell it using the proceeds to pay off the card? I actually did that like 7 years or so ago ofr my car and it worked out pretty well.
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Jul 8, 2010 16:52
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Ordinarily when people advertise a car that is inviting someone to "take over mah payments" they're stupidly high and nobody in their right mind would do it, but: I think in your position it might actually make sense, since the payments are so incredibly low. I'd put it up on Craigslist or something. Offer to transfer ownership & payments for zero down. All they have to do is take over the loan. At $36 a month, someone who has no cash at all but really needs a car might be willing to go for it. Of course this is dependent on you being able to transfer the loan to another party, so call your lender first and see if you can do that.
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Jul 8, 2010 18:18
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I have plenty of credit left on my card...would my loan company go for that? I guess they probably wouldn't care one way or another. Any other unforseen issues in using a credit card to get the lien released?
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Jul 8, 2010 19:59
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bewbies posted:I have plenty of credit left on my card...would my loan company go for that? I guess they probably wouldn't care one way or another. I had absolutly none. I told Cap one (the card I had at the time) that I wanted to do a balance transfer. They sent me a check. I wrote the check out to the finance company. They sent me the signed title. I went to the registry and re-titled the vehicle. I sold the car about a couple of weeks later, and used that to pay off the card. If I couln't sell immediatly, I was getting like 2% APR for 12 months anyway.
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Jul 8, 2010 20:11
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When you use a CC to make a balance transfer, they send a check to the other party. It's the same as cash and the leinholder does not give a gently caress whose check it is. Just keep in mind that you'll pay a substantial fee for the transfer. A few years ago you could still get good deals on balance transfers, but these days, 3-5% is a common fee. The CC companies lost a lot of the bullshit fees they used to charge in recent legislation, so they're making it up by jacking up the fees they can still charge, balance transfers and cash advances being one of the key ones. Your advantage here is that you're shifting from secured debt (a car loan, where if you don't pay they can recover the car) to unsecured debt, so you can then sell the car for whatever you can get for it. It might be worth 5% of the balance to you to get to do that.
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Jul 8, 2010 20:31
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bewbies posted:I have plenty of credit left on my card...would my loan company go for that? I guess they probably wouldn't care one way or another. The other option is you pay it down just below payoff, and sell the car. Depending on what state you're in, and whether the bank that holds your loan has a physical location to fill paperwork out in, this ranges from easy to complicated-as-crap. In my state, you basically sell the car with a bill of sale stating you'll pay off the car and have the bank send the dude the title (don't let the bank send it to you, and then from you to him... also, good luck getting a craigslister to not think you're trying to scam him). Or if the guy who's buying it is taking out a loan (not likely on a $3k car) his loan company will do all the paperwork for you. I'd just call your lienholder and ask them what the process is - they'll know what's up for whatever state you're in.
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Jul 9, 2010 01:08
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