buying new car from dealer - questions - need help today (Atlanta: lease, credit rating)

[clarksvillemom]

Ended up at Round Rock Honda because they had the car. Could not have gone better/more smoothly!

[ScoPro]

Originally Posted by clarksvillemom

Ended up at Round Rock Honda because they had the car. Could not have gone better/more smoothly!

We bought our new Accord there in October from a very nice saleslady. We used the Costco sales program which made it all a lot easier and at a price MUCH better than I anticipated.

It was the first time in 10 years since we had bought a new car.

[Srszee]

Originally Posted by trevorphilips

Why not lease? I like to get a new car every 3 years, always under warranty etc. That's just me though, I like piece of mind. I don't want to own a vehicle that might give me issues 4+years down the road. Keep in mind you do need good-great credit for leasing.

CASH! Lol here in New York, if you walk in and want to buy a car with cash, they will laugh. Those sharks get paid by spiffs fro the banks, if you're paying cash....means the finance manager AND the salesman are getting ZERO.

What they do to cash buyers is add on like 10% of what the car costs JUST SO THEY CAN MAKE MONEY!

Best way to literally get the most for your money is to go in the END of the month and get a lease and NOTHING DOWN except 1st payment and tax/registration fee's.

Leasing is the most expensive way to get a car, actually. I'm a Dave Ramsey fan. Dealers push leases because they make more on them. Basically, you're renting the car but you still have to pay for insurance, registration, upkeep, over mileage, etc. "Broke people don't ask how much. They ask how much down and how much a month." (Dave)

[10scoachrick]

Originally Posted by Srszee

Leasing is the most expensive way to get a car, actually. I'm a Dave Ramsey fan. Dealers push leases because they make more on them. Basically, you're renting the car but you still have to pay for insurance, registration, upkeep, over mileage, etc. "Broke people don't ask how much. They ask how much down and how much a month." (Dave)

Not all leases on all vehicles work out to be more expensive, especially if you can/do adhere to the terms of the contract. With no money down and zero disposition fees, one simply makes payments on the vehicle for the contract term and if one decides to buy it at the end, Bob's your uncle! If circumstances dictate another vehicle would be better, one turns in the leased vehicle and goes on about life. I actually 'made' money on our Acura RDX at lease end...buying out early by a couple of months and getting a trade value for the RDX well in excess of the buy-out price. If one leases a piece of junk overpriced vehicle, that would not be a financially viable option. With money factors and interest so low, leasing isn't nearly the "trap" it once was...again, one must abide by the terms of the contract.

The City of Austin does have a sneaky ad valorem tax on vehicles leased within the city...a tax not paid on a purchase, so something to consider.

[austin-steve]

Originally Posted by 10scoachrick

Not all leases on all vehicles work out to be more expensive ...

Uh, yeah they do.

With the exception of being a certain type business owner with a fleet, or otherwise able to deduct vehicle expenses for business up and above the standard mileage deduction, there is no "smart with your money" case to be made for leasing a car rather than owning. It is almost always, in all cases, dumber, if measured strictly from a "wise with dollars" standpoint.

I've discussed this extensively, every few years, with my accountant and other Realtor friends who know how to handle money. Including a year ago before I paid cash for a new Jeep to replace my 8 year old truck. We all put high miles on our vehicles, can deduct for business, and for none of us does it make sense to lease.

The situations where is can make sense do exist, but are very limited. But it would make sense in the same "lifestyle" way that someone might justify owning a boat, or a pool, or a bigger house than they really need. To that type of person, driving cars that are never more that 3 years old makes complete sense. But I'll bet they are not building wealth. They are just living for today.

Steve

[Trainwreck20]

Originally Posted by austin-steve

Uh, yeah they do.
The situations where is can make sense do exist, but are very limited. But it would make sense in the same "lifestyle" way that someone might justify owning a boat, or a pool, or a bigger house than they really need. To that type of person, driving cars that are never more that 3 years old makes complete sense. But I'll bet they are not building wealth. They are just living for today.

Steve

I did have a realtor friend that used to lease vehicles so that he always had a nice, new car for driving clients around. I think he only did it for a few 'cycles' and not sure how the economics worked out, but he did not do it on a whim and had apparently decided the non-monetary aspects off-set the higher costs.

I have a personal goal of trying to keep a car at least 10 years. I figure every car I do not buy is one more year early I can retire.

OTOH, we do have a boat, which ends up costing about $3,000/year with fuel, service, and slip fees; however, it is long-since 'paid' for and we use the hell out of it, so we are saving some money on what we would be doing on the weekend with the kids instead of boating .

[10scoachrick]

Originally Posted by austin-steve

Uh, yeah they do.

With the exception of being a certain type business owner with a fleet, or otherwise able to deduct vehicle expenses for business up and above the standard mileage deduction, there is no "smart with your money" case to be made for leasing a car rather than owning. It is almost always, in all cases, dumber, if measured strictly from a "wise with dollars" standpoint.

I've discussed this extensively, every few years, with my accountant and other Realtor friends who know how to handle money. Including a year ago before I paid cash for a new Jeep to replace my 8 year old truck. We all put high miles on our vehicles, can deduct for business, and for none of us does it make sense to lease.

The situations where is can make sense do exist, but are very limited. But it would make sense in the same "lifestyle" way that someone might justify owning a boat, or a pool, or a bigger house than they really need. To that type of person, driving cars that are never more that 3 years old makes complete sense. But I'll bet they are not building wealth. They are just living for today.

Steve

Steve, I said "not all ....not all" and your response was "Uh, yeah they do"; but then you open the door for certain exceptions. Like I said, "not ALL".

Also, paying cash for a vehicle(can't see you driving a Jeep that cost less than $30k) when a .9% loan is there for the taking means that thirty grand can't be used for anything else. Even in this lousy economy, I have a number of places to park $30k that would bring a multiple of that rate. Of course, taxes must be considered; but I ain't paying cash for a car when I can use someone else's money for under 1 point. I like for things to be paid off as much as the next guy; but...

[Trainwreck20]

Originally Posted by 10scoachrick

but I ain't paying cash for a car when I can use someone else's money for under 1 point. I like for things to be paid off as much as the next guy; but...

We were somewhat disappointed with our last auto purchase when we tried to finance at the <1% rate advertised - it seemed it had caveats, like minimum 5 year note and for a minimum of how much we financed (80 percent or maybe more of the car cost?). It has been a while, not sure what the rates/requirements are now, but still annoying.

Yeah, no kidding about better places than in a (depreciating) car - Valero stock is paying 4.3% annually currently ($0.70/share/quarter). Dozens of other high-dividend stocks that can cover losses (if they happen) via the dividends after a few years.....

[austin-steve]

Originally Posted by 10scoachrick

Steve, I said "not all ....not all" and your response was "Uh, yeah they do"; but then you open the door for certain exceptions. Like I said, "not ALL".

OK

Also, paying cash for a vehicle(can't see you driving a Jeep that cost less than $30k) when a .9% loan is there for the taking means that thirty grand can't be used for anything else. Even in this lousy economy, I have a number of places to park $30k that would bring a multiple of that rate. Of course, taxes must be considered; but I ain't paying cash for a car when I can use someone else's money for under 1 point. I like for things to be paid off as much as the next guy; but...

Well, I think we all have some hard and fast rules of life that we live by. One of mine is "never borrow money to pay for a depreciating asset". Period. That includes cars and furniture, basically anything other than real estate, which appreciates.

I'm not unaware of the opportunity cost of cash, and for a good reason I will violate the rule. I bought a new car for my daughter to take to college and decided to make the largest downpayment allowed under the deal ($10K) and borrow the other $7K in my daughters name with me as co-borrower, so she can build a credit score.

So, absent a strategic reason, I'll never borrow money to buy anything that goes down in value.

Now, if there was a 6% CD to put my cash into for the life of the loan, and I could borrow at 1% to buy the car, maybe that would be a strategic reason. But I wouldn't buy stocks with it.

I think the OP paid cash. I made my Mom pay cash for hers after we sold her house. She also said "but the interest rate with USAA is so low". I said, "Mom, you're paying cash, don't argue with me".

[trevorphilips]

Question, but how do y'all go about not leaving any money down? Here in NY all I see is lease advertising with always "$1999 down+1st month payment+tax/tags".

I've known 4 coworkers that got lease cars, all of them had to leave roughly $3000 down to cover everything I mentioned above. MYSELF included.

I just want to know for the next time I or someone I know gets another lease.