How do you handle the car buying experience? ) (2/26/2021)

Posted by: @jkuvakas

@terryslekar...when you see a manufacturer offer $12K off the price of a car, it not the dealer's profits they're giving away. It is usually a combination of option package discounts, consumer rebates, and dealer rebates...as in any advertising, things may not be how they first seem. 

Exactly - it’s all an illusion...& that’s where most people fail at car buying, they’re swept up in the illusion that they’re saving tens of thousands...

But not me - I see right through that schitt...👍

@terryslekar, well said! In the end, it's just like buying a model. It's not as much about the deal as it is the satisfaction of owning it!

JK, I have noticed lately that there are STILL NOS 2020 cars in stock in my area and for sale at very decent discounts; especially the higher end units.  Note: I have only looked at Japanese cars.  Nissan/Infiniti and Honda/Acura are particularly well stocked with these 2020 units, much to my surprise.  I realize that if I purchase or lease one of these I am taking on a car that is almost 2 years old depreciation-wise; which makes me lean more toward a 3 to 5 year lease arrangement.  I am going to change my 2017 Rogue next year or sooner so I am trying to educate myself about how to do the best deal.  This is particularly important this time around as I'm retiring within a year so my mileage will be much less and I will likely keep the next car longer.  What I find interesting at this point is that the sticker on a full load 2021 Rogue is only 3K less than a NOS 2020 Infiniti SUV.  On a 5 year lease arrangement I might be wiser to go with the Infiniti; depending on the comparative lease rate between the two cars.  What are your thoughts about all this?

It's harder to negotiate on a lease but not impossible. Leases are designed to benefit businesses more than private individuals. Yet, some folks are more comfortable with them. That's OK. As long as you're aware of the end costs and options in the lease. 

Infinities depreciate rather quickly. I'm not sure why, but it's a fact of life. I think they're great cars. But the depreciation affects the math of the lease. The lease is designed to help you pay only for that part of the vehicle you use. It does this by anticipating the value of the car at the end of the lease. That value is subtracted from the purchase price (which is negotiable) and you make payments on the difference. If one car loses more value over the term of the lease than another, then your lease will be a bit more expensive. If you choose a vehicle that depreciates less, your costs will be less, all things being equal. It all gets down to the numbers. I always lean toward the better-equipped car but I have to balance that with how much it's costing me. 

My advice, always, is that you should buy rather than lease if you intend to keep the car longer. If you are eligible for tax deductions on your vehicle, leasing may be a better alternative. In the end, it's a toss-up. If you lease, you never really own the car and you will always have a payment. But, you will turn the car in before it hits the more expensive years of its life cycle.  If you buy and make the payments hurt, just a little, once you own it, there are no payments. You can tailor your loan to any number of months you like. You're not locked in to 48, 60, 72 months. I bought a car and wanted my payments to be $500 a month. To do that, I had to finance for 40 months. It took a half-hour to convince the business manager he could do it. That bank is more flexible than most folks think.

@jkuvakas  Thanks for your insight John.  I have leased several cars over the years but have found that doing so only makes sense if it is a fairly inexpensive unit and that it is a Japanese SUV (Honda or Toyota ideally) which has excellent residual value.  It seems with these brands that the dealership can offer (usually toward model year end) pretty good discounts (up to 10%) AND a very low lease rate.  Regarding the Infiniti brand, I too have noticed that all their cars and SUVs depreciate more than say Lexus and Acura products.  Same goes for the Honda and Toyota vehicles compared to Nissan.  Hard to understand because IMO they are every bit as good to own and maintain. 

The best lease deal I ever made was on a demonstrator 2008 Acura TL full load.  It stickered at $49,000 and it had 3600 miles on it; driven by the dealership owner apparently.  It was the last 2008 in stock and I desperately did not want to buy/lease the origami looking 2009, which was UGLY and out of my price range.  I got the TL demo for $34,500, which IMO was an awesome deal for a full load TL.  I guess the dealership had their tax write off from it being a demo car, so it all worked out well for both of us.  Nicest car I ever owned. 

It sounds like you're doing well, Jack. I think you have a grip on how it works!!

I have been dealing with the same dealership for 25 years. My salesman now is the son of my original salesman. So it has stayed in the family and easy. I do a little research beforehand. When I am ready, I call Joe, tell him what I want. he finds one for me if it isn't already on the lot. I go in and sign the papers, pick it up and go. I've always got a good price, but I have employee discount too. It's been a pleasant experience every time.

@terryslekar 

Yep, the ability to walk is priceless.  Used that method several years ago when we bought Cathy's Endeavor.  We walked out of the dealership and went home. 

Later, as I was about to call the dealership and accept their final offer, the phone rang.  It was the dealership.  

They accepted our offer.

Before I sit down with the salesperson I tell them upfront that all quoted prices must be "out the door."  I don't want to hear later into the process that the price did not include some BS fee just to jack up the price. 

@jkuvakas, Maybe it's dictated by geography, but just about everyone in my circle leases their rides, not just limited to businesses.

I've been leasing since 1993. One of the very best lease deals I ever had, was on my current Infiniti. At the time dealers were demanding crazy prices on newly introduced Honda Accords.  I was able to lease an Infiniti with an MSRP of $45K for just about the same $ as a $28K stickered Accord.  IMO the Infiniti is head and shoulders above any Accord.

@sizedoesmatter...yep! I forgot to mention that...”out the door” or no deal!

I bought my first new car when I retired!

I lived in Manhattan from 1979 to 2014, and owned a few old clunkers in my teens and early twenties before then. 

I know my strengths, and I have quite a few. However, do not ask me to negotiate or do bad cop. These I do badly. So when I bought my car, I did every thing wrong and wound up paying well over market, although, as pointed out by JK, there's little room for an inexpensive small car. Having said that, I love my car so much, I would have paid more.

I did pay cash, and it felt good. I've read, however, that financing helps get a better deal, and the loan can be paid off in a few months to make everyone happy.

Also, from my other post, I've known and read of clients who saved thousands of dollars using a broker like Tom McParland, so I'd happily use him if and when I buy another car (I hope to donate my car to Honda's Marysville museum when I give up my keys in 25 years).

@sizedoesmatter Honda is notorious for their lease prices. And they're unwillingness to bring down the price. Love their cars, though.

Posted by: @terryslekar

@sizedoesmatter...yep! I forgot to mention that...”out the door” or no deal!

Oh, I've learned how to buy a car now...of course almost 7 years too late.

Posted by: @jkuvakas

@terryslekar, you're wise. Cash is the way to go. But a lot of folks believe it to be a negotiating advantage when it's not. I always arrange to finance on my own or, like you, I pray cash. 

Lovely Freudian slip there 😉