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re: How stupid are the owners/managers at car dealerships?
Posted on 7/28/14 at 11:52 am to Topwater Trout
Posted on 7/28/14 at 11:52 am to Topwater Trout
quote:
so the whole depreciation factor is a myth also?
Not at all.
New cars depreciate, that is a fact.
When you lease, you are conceding the deal to the dealer. You are also buying into way too many "X" factors to even remotely negotiate a fair deal.
Plus, you are absolutely guaranteeing that the car you turn in will be perfect condition. No accidents, paint work, tires are perfect, etc.
That whole "I can driver a nicer car for the same money" is bull, too.
Remember, in a purchase, you will, at some point, have some equity.
1
Posted on 7/28/14 at 11:54 am to VetteGuy
quote:
Remember, in a purchase, you will, at some point, have some equity.
for most people i doubt they have some after 3 years
quote:
you are absolutely guaranteeing that the car you turn in will be perfect condition. No accidents, paint work, tires are perfect, etc. That whole "I can driver a nicer car for the same money" is bull, too.
you seem to know a lot about this and I have never leased so how does it work if you wreck a leased vehicle?
Posted on 7/28/14 at 11:55 am to Gaston
quote:
My friend is leasing an M6 gran coupe and he went in there with cash to purchase it outright. Selling a 3 year old $130k car may be difficult if the vehicle isn't a success, or another brand starts offering a comp at a better price. They have to take it back, and he knows upfront his total liability.
You just named the rare instance where it may be better to lease than to buy. (Marque depreciation)
Let's be honest though, the dealer factored that into the deal and not many of us buy six-figure German cars.
Posted on 7/28/14 at 11:57 am to Topwater Trout
I can't argue your first point, but they really should. I was talking more at end of loan, payoff.
Problems, even if you have gap insurance. It varies by contract, but it could be a huge liability. Think: diminished value.
quote:
you seem to know a lot about this and I have never leased so how does it work if you wreck a leased vehicle?
Problems, even if you have gap insurance. It varies by contract, but it could be a huge liability. Think: diminished value.
Posted on 7/28/14 at 12:02 pm to VetteGuy
quote:
Problems, even if you have gap insurance
I know all GMAC leases used to carry gap within them, and I would assume this is required for all leases.
I don't see how gap wouldn't make this right, can you explain further?
Posted on 7/28/14 at 12:04 pm to VetteGuy
quote:
I was talking more at end of loan, payoff
yes and I understand that. I personally hate having a car note and love going few years w/o one.
quote:
Problems, even if you have gap insurance. It varies by contract, but it could be a huge liability. Think: diminished value.
i didn't know if the dealership still carried some insurance on those cars or not.
Posted on 7/28/14 at 12:08 pm to KosmoCramer
quote:
I don't see how gap wouldn't make this right, can you explain further?
No, it wouldn't. I used the wrong term. That's only for if you total the car and the insurance payout is less than what you owe. It may help, IDK.
Also, from I read, leases have changed. Some (not all) contracts waive diminished waive as long as you have the car satisfactorily repaired. Just have a party of lawyers look over the documentation you sign when you lease and you'll be fine.
ETA:Leases include Guaranteed Auto Protection (GAP). Customers who lease have no risk should the vehicle suffer a total loss during the lease period, through accident or theft. Insurance companies pay the actual cash value for total losses and as mentioned above most vehicles have little to no equity during the first 75% of the life of the loan. That makes you financially responsible for any deficiency balance due.
This post was edited on 7/28/14 at 12:15 pm
Posted on 7/28/14 at 12:09 pm to Topwater Trout
quote:
I personally hate having a car note and love going few years w/o one.
Agree.
Posted on 7/28/14 at 12:21 pm to VetteGuy
Vette you say if you drive minimal miles you will have a nice trade after 3 years. Once again you do not no what you are talking about. Unless you put a good bit down or fincance short term you will be upside when you trade after 3 years which will have to be rolled into the vehicle you are buying.
So for someone that trades every 3 years and does not drive lots of miles.....You can lease and have a lower monthly payment and turn the vehicle in at the end of the lease and lease or buy another vehicle. Or you can have a much higher monthly payment and have negative equity when you trade that will roll into your new vehicle......
Also your vehicle doesnt have to be in perfect condition. You are not charged for minor wear and tear.
So for someone that trades every 3 years and does not drive lots of miles.....You can lease and have a lower monthly payment and turn the vehicle in at the end of the lease and lease or buy another vehicle. Or you can have a much higher monthly payment and have negative equity when you trade that will roll into your new vehicle......
Also your vehicle doesnt have to be in perfect condition. You are not charged for minor wear and tear.
Posted on 7/28/14 at 12:31 pm to mouton
quote:
Vette you say if you drive minimal miles you will have a nice trade after 3 years. Once again you do not no what you are talking about.
How do I not know what I am talking about? Have you priced used cars lately? Three year old cars with low miles bring top dollar, ask anyone in the business.
quote:
You can lease and have a lower monthly payment and turn the vehicle in at the end of the lease and lease or buy another vehicle. Or you can have a much higher monthly payment and have negative equity when you trade that will roll into your new vehicle......
Yes, and you never ever build any equity.
I guess we should all rent furniture, too.
Look, leasing has improved somewhat over the last few years re: turn-in and wear and tear.
It is a decent device for people with weaker credit to sport a bit better car. (and stay in debt forever).
If you sit down and work a calculator, you'll see that, long term, it is not a wise choice. Unless you're the lessor.
Posted on 7/28/14 at 12:34 pm to Topwater Trout
quote:That is my plan. I have paid off 3 trucks so far and it is a good feeling not to have to keep putting money into my savings for that. I can buy a cheaper truck with more miles, and still have extra cash to fix it if something goes wrong. Hell, I can probably get an entire 5.3 or 6.0 engine for $1500 and a transmission for $500. That is a far cry from the almost $30k I have put into fixing my current truck. Hell, I've got to pay back the money on that loan anyway
I personally hate having a car note and love going few years w/o one.
Posted on 7/28/14 at 12:37 pm to VetteGuy
You are beyond freaking clueless....
First you will not have any equity after 3 years you will be upside down.
Second you can not lease if you have weaker credit. There are much stiffer credit requirements than on a traditional auto loan.
A person that trades every three years never builds any equity.
First you will not have any equity after 3 years you will be upside down.
Second you can not lease if you have weaker credit. There are much stiffer credit requirements than on a traditional auto loan.
quote:
Yes, and you never ever build any equity.
A person that trades every three years never builds any equity.
Posted on 7/28/14 at 12:38 pm to VetteGuy
quote:
How do I not know what I am talking about? Have you priced used cars lately? Three year old cars with low miles bring top dollar, ask anyone in the business.
This. I could probably sell my 2012 F150 for the amount I paid for it new. The cheapest one on autotrader within 500 miles of me with under 30k miles is $3k MORE than I paid new.
Posted on 7/28/14 at 12:42 pm to mouton
quote:
You are beyond freaking clueless....
Says the guy advocating leases.
quote:
First you will not have any equity after 3 years you will be upside down.
Maybe if you bring negative equity, or get hosed on the price, or you're talking about super expensive cars with terrible resale.
Even then, I brought negative equity into my truck purchase, and still have positive equity after 2 years. And that's not on a short term finance either.
quote:
A person that trades every three years never builds any equity.
If they buy solely on MRSP maybe. But even then, if you buy a new Accord or similar every 3 years, you most certainly will build equity. You shouldn't be throwing around the term clueless, unless you're describing yourself.
Posted on 7/28/14 at 12:44 pm to mouton
OK, forget it.
Lease to your heart's content.
Lease to your heart's content.
Posted on 7/28/14 at 12:47 pm to LNCHBOX
You honestly believe most people have equity after three years when the vehicle has depreciated and very little of your payments have went to the principle?
Posted on 7/28/14 at 12:51 pm to mouton
quote:
You honestly believe most people have equity after three years when the vehicle has depreciated and very little of your payments have went to the principle?
Are you kidding?
Let's use a $30k car as an example. 6 year loan, 3% APR. After 3 years, the unpaid balance is $15,673. A low mileage car will bring that for sure.
ETA: A 5 year term lowers that number to $12,541. That's a way better option than leasing, as you'd actually have a decent chunk of equity at the end of the 3 years. With a lease, you'd have nothing.
This post was edited on 7/28/14 at 12:53 pm
Posted on 7/28/14 at 12:51 pm to mouton
Which "store" do you work at?
You are a perfect example of why people shouldn't lease.
They also shouldn't finance over 48 months, but that's another story.
You respond on the assumption that every idiot comes in and puts $500 down and finances for 72 months.
Leasing is a great way to move product and keep the average buyer in a note. No wonder you're all about it.
You are a perfect example of why people shouldn't lease.
They also shouldn't finance over 48 months, but that's another story.
You respond on the assumption that every idiot comes in and puts $500 down and finances for 72 months.
Leasing is a great way to move product and keep the average buyer in a note. No wonder you're all about it.
Posted on 7/28/14 at 12:52 pm to mouton
quote:
very little of your payments have went to the principle?
how bad is your credick?
Posted on 7/28/14 at 12:53 pm to VetteGuy
quote:
You respond on the assumption that every idiot comes in and puts $500 down and finances for 72 months.
Even then it makes more sense to purchase
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