Car buying and car ownership

Sundry Chitchat
44

My main contribution is: never trade in your existing vehicle if you can avoid it. You will always always always get fucked on the deal.

I walked on a basically done deal a few years ago over this. The new car sales manager offered me $4500 for my trade, which I snap accepted because the truck was 10 years old, had a zillion miles on it and the AC was busted (on Dodge pickups, in order to replace the compressor you essentially have to disassemble the entire dashboard and get to it from inside the cab of the vehicle…VERY labor intensive and it was going to cost a ton to get it fixed). By the time ol’ F&I got his meat hooks in me, the $4500 had been completely forgotten by everyone but me. They couldn’t honor the manager’s “offer” so I bolted. Though I had to wait like 20 minutes for my keys…they like to take your keys away to make it harder to change your mind or something.

Now sometimes you will almost have to trade. Like when your only vehicle is the one you’re considering trading, and selling to a third party means renting a car until you can buy another one or something. In that case, settle on a price first and don’t even mention a trade. Once you’ve dickered down to a price you’re comfy with THEN and only then ask them what they will give you for your trade. That keeps their fuzzy math out of the deal somewhat.

But mainly just sell your car to a private party and don’t trade it because more often than not you’re literally just giving them your existing car for free if you don’t know what you’re doing.

45

I think you’re underestimating how much you can save.

46

Right, by “leasing terribly” I mean that demand was exceeding supply, so dealerships weren’t budging on MSRP and were actually getting OVER sticker for a while. Again, that was right after release, so it might have gotten better. The relatively high MSRP, relatively high money factor, and sketchy residual value were adding up to premium-priced leases.

I ended up leasing a Lexus GX 460 event car w/250 miles for significantly less than a Telluride would have cost me. And FWIW there are some good reasons to prefer the Kia over the Lexus (CarPlay, MPG), but I’m happy with mine.

I really do recommend that anybody looking into leasing check out leasehackr, even just to educate yourself. I love making/getting good deals on stuff like this (although in my case the best deal available ended up being through a broker so it was crazy easy), but I know a lot of people would prefer to not deal with the hassle, that makes sense to me too.

Separate topic: I just took over a lease on a BMW for my wife, if anybody has any questions about that process I’d be happy to answer them. Cliffs: it was really straightforward and took about a month start-to-finish.

47

My opinion is that the bulk of the savings are easy to get (if you know what you’re doing) and it’s the last couple/few hundred bucks that require all the shenanigans.

48

Spamming a bunch of form emails and then occasionally talking on the phone really isn’t that much work. Even if it is $100-$300, I’d spend 20 minutes writing emails and maybe another 20 minutes talking on the phone for that.

49

Also, not sure if this is a state by state thing, but at least in NY, don’t forget to factor in the sales tax reduction if you trade in versus sell to a private party. In my state a trade-in reduces the purchase price of the new vehicle, so you pay that much less sales tax. So a trade in worth $5,000 with an 8 percent tax rate saves you $400 in tax off the purchase price of the new vehicle. So you’d have to get at least $5,400 in the private transaction to get the equivalent. Yes, you’ll almost certainly get this and get more money going privately, but it’s not an apples to apples comparison especially when you factor in the inconvenience of selling privately.

50

In to say the Telluride is a badass SUV (don’t own one, but test drove one recently) and I hope you enjoy it.

1 Like
51

I can throw a little in to this discussion.

In 2014 I bought my wife a new Subaru Forester. This was the first year of the new body style and they were flying off the lots. In fact, I couldn’t even test drive the model we wanted because nobody had one anywhere.

I wrote this letter to every Subaru dealer along the I5 corridor from Bellingham to Portland:

"Hello.

My wife and I want to purchase a 2014 Subaru Forester. The options we want are:

Model: 2.5i Premium
Options: All weather package
Transmission: Automatic CVT
Color: Our preference is Gray, but black is acceptable as well.

We understand that these vehicles are in demand; we’re willing to wait up to a month for you get it in inventory, provided that we lock in the price.

This message is going out to multiple Subaru dealers. Please send me your best price, including tax, license, and any fees you include. Assume no trade, and we can finance in-house or out.

We’ll be purchasing from the dealer who sends the best price."

All of the prices came back within a few hundred of each other except for one dealer that was $1500 less. I assume they had to meet a sales quota for a bonus or something. We had to wait about 3 weeks for the car to come into stock but we were prepared for that. We came in with our own financing and let them beat it, which they did, so we financed through them.

I did this recently when I was looking at buying a CRV or a CX-5. The dealers all came back with the same price. The game may have changed because nobody was budging on the prices. Might be because the cars were in pretty high demand and they didn’t need to make any deals. I ended up buying a 2017 CPO CX-5 with 25k miles on it for a good price from the local dealer. I had them throw in a $400 upgrade for android auto/carplay for free as part of the deal.

A note on the CRV’s in case anybody is looking in to them - The small 4 cylinder turbos they put in them run so efficient that they have difficulty burning off the fuel vapors and you end up with fuel in the oil. They came out with a software fix that supposedly runs the engine at a higher temperature but it only works in some cases. Some owner’s oil is testing at greater than 5% fuel contanimanation, and their oil levels are going up almost an inch over the full mark due to the amount of fuel in oil. This was prevalent on 2017 and 2018 models, but the 2019 models didn’t change anything and it’s likely an issue with them, too. I really wanted the CRV when I was looking but the issue was enough to move me to the CX-5. Happy I made the choice because Mazda’s are a lot more fun to drive.

2 Likes
52

None of mine have come from auction. The first one had one previous driver on a lease, this one had one previous driver who traded it in and got a new one IIRC.

1 Like
53

I don’t know, I still think this works. I utilized a similar strategy when helping my mother buy a new Honda Accord at the end of last year. I did not get the same price from every dealer and got a number of them to go lower with competing prices.

54

It’s not really a simple as that. There’s a big category of losses that aren’t enormous, but are also large enough that they can’t comfortably be covered from cash-on-hand. Self-insuring those risks has real costs, either in the form of holding more cash than you’d need in a riskless world or else having less-than-perfect protection if the loss occurs (e.g., maybe you have to cash in a CD or take an early withdrawal from a 401(k) or go without a car for a few weeks). The value add of insurance is that aggregating risks can make these real costs ~disappear (albeit not without introducing new administrative costs and such). A lot of insurance is actually written at an underwriting loss, meaning that expected value of payouts is higher than the commissions, because the insurer gets to hold a big pool of money against future claims and run a little hedge fund where you get to keep 100% of the profits rather than 20%.

2 Likes
55

Who are you talking to? I said to never buy insurance FROM THE DEALER. I can assure you that shit isn’t being sold at an underwriting loss.

1 Like
56

image

Sick new Discourse feature!

1 Like
57

Oh thanks this makes sense. Can I ask how much you are paying for the Lexus then? Feel free to PM me (or not). Like I’m not looking to make some sick deal on a lease, I just don’t want to get ripped off if there’s something I’m missing. Again I don’t have a problem with paying around $350/month to drive an SUV but I’m curious if my price point is off.

Our plan is to test drive a few cars this weekend and then go with whatever one we think is the most reasonable. The Telluride and Pallisade were our original top choices but I do have concerns that there will be stock issues with both of them based on inventories I’m seeing on websites (most of the available ones are suped up and therefore more expensive than we were hoping for). Meanwhile my local Honda dealer has about 30 Pilots with different customizations on hand and as far as I can see the Pilot is ranked similarly to the former two at a comparable price, so might end up going with them out of convenience.

58

FWIW, I love my Honda Pilot. Never thought I’d get an SUV, then I had my first kid and was driving a ton with her to visit family several hours away like every weekend with stuff literally on my wife’s lap because we coudln’t fit everything we needed in my civic, and it’s been a great car. Honda sensing is great, makes long drives much easier.

Edit: Also I don’t know if you have young children, but the trunk area of the pilot has a removable panel that can be tucked in such that you end up with an impression that makes a great changing table on the road.

1 Like
59

I’ve heard a few good things about the Pilot and I put a fair amount of stock in “current owners not saying anything bad about their car.” We have a Santa Fe sport and while it’s fine it’s probably a little lacking in features that we would want and feels a little smaller than we like while our Elantra GT has been awesome; meanwhile I believe Hyundai has discontinued the former and is bringing back the latter after they had stopped making it the year after we got ours.

60

I’m paying $465/mo including tax for the Lexus, $0 due at signing (literally nothing, every cost rolled into the lease). That’s with 15K miles per year, which I need. I did put down max MSDs (multiple security deposits) but that gets returned at the end of the lease. I would really recommend rolling everything you can into the monthly payment - if you put down cash up-front in order to knock down the total cost of the lease and thus the monthly payments, that money is just gone if the car gets totaled.

2 Likes
61

Agree with $0 at signing. Could make a really strong case for buying Lexus and leasing Euros. Impeccable reliability but Toyota parts / mechanics if something goes wrong. An off-warranty Audi/Benz/BMW is not a problem I would want to have.

62

I think this matters a lot. It just doesn’t make much sense that the VERY BEST cars coming in would be shipped off to auction since they should be the used lot gems. Not impossible because there are other factors like inventory, demand, etc., but I’d consider it a red flag. Also, the selling dealership will be familiar with the car and generally have more detailed service history. Obv I have no way to verify this story but it’s exactly why I am skeptical of auction CPOs:

63

This is the one I’m shopping for. It’s Mazda 3.

image
image1668×1254 1.4 MB
image
image1668×751 869 KB

2 Likes