Sell older car, bank the money and lease new car? (vehicle, mortgage)
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I just ran kbb for the top line Camry 2004 and trade in came in at 7600-8000 and private party at 9900.00 for excellent condition. A 2003 in good condition trade in is in the 6ks and private party near 8k I have no idea where you're getting your figures. She may not get 9k but if she only get 4-5k she's probably getting robbed
Fwiw I sold an 04 accord with double the miles of this yota, 158k and no nav for 5500 private party within two days of parking it with a for sale sign. That was below market however I wanted it sold prior to going on vacation. There is certainly more money in the yota
Thank you. I'll be going around with her when she makes the decision. She is not financially savvy unfortunately and the way the dealers work the numbers for actual cash value can be daunting.
Leasing is generally the most expensive way to own/operate a vehicle. If the goal is to save money over the long-term I don't see how choosing to lease would be a good idea (on average of course because I realize now someone will respond with their 'special snowflake' situation where they tell us how leasing saved them money).
Having to put $1,200 into an older car every few years doesn't mean the car is falling apart or is a lemon. Things wear out and need to be replaced and some of them are a little pricey, a car repairs fund needs to be factored into any budget for someone who owns a vehicle. It sounds like her only source of income is social security, I don't think hacking off a chunk of that every month to make lease payments would be a great idea, I like the suggestion to get something else used, maybe a few years newer with good long-term JD Power & Consumer reports track records.
If her car is in mint condition as you state, it shouldn't be breaking down frequently, she is just looking for an excuse to buy a new car... She is in this situation because she has made bad decisions and is thinking about making another one..
The lease car $200.00 a month PLUS the down payment of a couple thousand. A lease is designed for people who can afford it or can write it off, not for poor people who want a new car.
Better to trade it for a low mileage used car, or keep the one she has.
If her car is in mint condition as you state, it shouldn't be breaking down frequently, she is just looking for an excuse to buy a new car... She is in this situation because she has made bad decisions and is thinking about making another one..
The lease car $200.00 a month PLUS the down payment of a couple thousand. A lease is designed for people who can afford it or can write it off, not for poor people who want a new car.
Better to trade it for a low mileage used car, or keep the one she has.
Evidently you know my sister in law very well? Bad decisions? It wasn't her decision to lose her husband 8 years ago; luckily he left her with a fairly new beautiful automobile and no mortgage. Lots of medical and other debt after he passed though. She never had to work a day in her life, even though she was well educated and had two degrees; she was well provided for and had no children. Would you want her to go ring a cash register now at WalMart? I'll help her any way I can.
How much have the repairs cost, total over the last 2 years?
How much value has the car lost in the last 2 years?
Add these up and divide by 24. This is how much the car costs each month, not including gas, insurance, or parking. If this is less than the lease payment (plus the down payment divided by # of months of lease), you are better off keeping the current car, assuming a good driving record and insurance wouldn't change much.
I never saw this question answered, and it is an important one.
Your SIL is wanting to spend $200 a month to avoid paying $1200 a year. Do the math, there, and you'll see that is a bad decision. She could simply set aside the $200/month she was going to pay, and have plenty to pay for any needed car repairs.
I never saw this question answered, and it is an important one.
Your SIL is wanting to spend $200 a month to avoid paying $1200 a year. Do the math, there, and you'll see that is a bad decision. She could simply set aside the $200/month she was going to pay, and have plenty to pay for any needed car repairs.
She "thinks" she's paid more than $1200 over the past 12 mos. or so, and is just getting nervous about taking money out of savings for what she considers an old car now. Next will be tires she says. True. I told her that she already has a good used car with low mileage, why buy another used car unknown; to save up for the new tires, and wait another year or so before doing anything. She may never have another problem. She's just a fearful lady at this point. I'm going to take her around a few car dealers for a dose of reality.
She "thinks" she's paid more than $1200 over the past 12 mos. or so, and is just getting nervous about taking money out of savings for what she considers an old car now. Next will be tires she says. True. I told her that she already has a good used car with low mileage, why buy another used car unknown; to save up for the new tires, and wait another year or so before doing anything. She may never have another problem. She's just a fearful lady at this point. I'm going to take her around a few car dealers for a dose of reality.
A lease down payment of $2700 (not uncommon) on a 36 month lease is $75/month. Add to actual payment of $200, you get $275/month. And more expensive insurance.
Even if current car costs $1200/yr. in repairs, that's $100/month. Depreciation is perhaps another $1200/yr. or so, with 8-10k miles per year, which is $100/month. Total is $200/mo. , which is cheaper than the lease when you account for the amortized down payment. And that doesn't even account for the insurance difference.
If 15,000 miles per year are put on the car, then you'll end up paying more either way, either in over-mileage fees or added depreciation.
05-24-2014, 02:09 PM
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n/a posts
She's 74 and apparently in decent financial shape. She should just go for it.
Is it the best thing based purely on numbers? Probably not (although with included routine maintenance, it may very well be about equal). Does it really matter if she could save a trivial amount of money by keeping her old car? No.
It's not like she's thinking of eating cat food and skipping her medication so she can cruise around in a Mercedes S class. She seems to simply want a reliable, affordable car that doesn't break down and cause her headaches.
She's 74 and apparently in decent financial shape. She should just go for it.
Is it the best thing based purely on numbers? Probably not (although with included routine maintenance, it may very well be about equal). Does it really matter if she could save a trivial amount of money by keeping her old car? No.
It's not like she's thinking of eating cat food and skipping her medication so she can cruise around in a Mercedes S class. She seems to simply want a reliable, affordable car that doesn't break down and cause her headaches.
Thanks Jason; I have to delve a bit more into her financial situation. So if I take her to a few dealers and sit down and talk lease / trade / sell outright / buy new or used, she'll come forward with info. Because she was thinking to pocket some money from selling the old car, put a d/o on a lease and have more cash on hand. So that tells me she needs some cash. Taking her out next week to look at used cars first. But like I told her, "you already have a used car". And 7K or 8K miles per year is about avg. for her so far. 82K on the 2004 Camry.
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