Sad Day! Guess I will never get an 07!
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Joined: May 2005
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From: VA
That sucks. You should go into a dealer though and see what they can do for ya... sometimes eating a little negative equity can balance out. I unloaded my 05 coupe before the new 08s come out... I am certain the value on the coupes are going to drop significantly when the new body style comes out. Much like what the 07s may be doing to your 05 now.
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Joined: Aug 2006
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From: Chicago
As we are talking about leasing, I want an opinion on this-
Does it not make sense to get a clearbra on a lease?
I mean, anything that would happen to the hood (within reason) should be covered as "wear & tear" over a 39 month period, right?
Does it not make sense to get a clearbra on a lease?
I mean, anything that would happen to the hood (within reason) should be covered as "wear & tear" over a 39 month period, right?
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Joined: Jul 2004
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From: SoCal
Originally Posted by kring
It's not actually $11,000... it appears that way, but you have to look at the big picture, that $11,000 if you pay it for a new 2007, your getting a new car, new warranty and your getting 2 more YEARS of the car. so over the course of 5 years your paying the same amount to drive the car, it's roughly $3.5K a year.
Also, you are forgetting one critical element -- a higher price = higher financing costs. So, you have to factor in the extra $3,000 or so it would cost to finance the extra $11k over 5 years. According to your example, that would put it at $4,100 per year (if I followed you correctly).
Also, a new car will loose a huge chunk in the first year, so if you sell it before your 5 year theorizing, you will end up paying even more per year.
The best way to go is actually a 1-2 year old used car. But that is a whole different story.
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Joined: Nov 2006
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From: Connecticut
Originally Posted by Rampant
Umm, not sure I agree there. Cost per year means about as much as hp/liter. Sure it is nice to talk about, but doesn't mean too much when all is said and done. Out-of-pocket cost is what people need to worry about. If they don't have the extra $11k to spend, then they can't get it -- simple as that.
Also, you are forgetting one critical element -- a higher price = higher financing costs. So, you have to factor in the extra $3,000 or so it would cost to finance the extra $11k over 5 years. According to your example, that would put it at $4,100 per year (if I followed you correctly).
Also, a new car will loose a huge chunk in the first year, so if you sell it before your 5 year theorizing, you will end up paying even more per year.
The best way to go is actually a 1-2 year old used car. But that is a whole different story.
Also, you are forgetting one critical element -- a higher price = higher financing costs. So, you have to factor in the extra $3,000 or so it would cost to finance the extra $11k over 5 years. According to your example, that would put it at $4,100 per year (if I followed you correctly).
Also, a new car will loose a huge chunk in the first year, so if you sell it before your 5 year theorizing, you will end up paying even more per year.
The best way to go is actually a 1-2 year old used car. But that is a whole different story.
It's all about making the money work for you as best as possible, one of the the keys to wealth is being comfortable with (the right) amount of debt. everyone's situation is different and of course to quite a few temporarily laying out $11K is a too much, but some may argue that if you can't do that your probably in the wrong bracket of car to begin with.
Naturally it depends on everyone's situation, but no matter what way you look at it, new cars are not that much more money then used cars... when comparing the same cars.
I want to know why people seem to think they must use KKB to determine thier car's value? FYI, KBB is a dealership-sponsored publiciation therefore it's going to under estimate trade-in value. You really should be looking at NADA values which is what the banks use. I have never let a dealer tell me what my car is worth. I always use NADA and I always get NADA value which is usually 10-15% higher than KBB. According to NADA, my mostly loaded 03 with 45K miles is worth $19,600 on trade and $22,600 for retail. The retail value is right in line with what private parties are asking in Kansas City and about $700 less than what dealerships are currently asking for 2003 sedans.
Originally Posted by kring
It's not actually $11,000... it appears that way, but you have to look at the big picture, that $11,000 if you pay it for a new 2007, your getting a new car, new warranty and your getting 2 more YEARS of the car. so over the course of 5 years your paying the same amount to drive the car, it's roughly $3.5K a year.
If you were to buy the used car for $22,000 and drive for 2 years (5 years from the "new" date) the car is only worth $15K after 5 years. The used car cost you $7K for 2 years. which is $3500 a year. The New 2007 cost $33K but after 5 years of driving, it's worth $15K, your cost of driving was $18K, or $3600 a year. For arguments sake, it's a wash on the annual cost of driving. So it doesn't really cost you $11K, it cost you nothing more. you may have "paid" 11K more, but after 5 years of driving it, you have $11K more in value in the car. .
Does that make more sense? you can't look at the the numbers at face value, you have to look at the cost of driving a car over time. And in the example above it's costing you the same to drive a new car with better features etc...!
Used cars work out good when they at like 100K miles and you pay $7K for it and your looking to run it into the ground for another 100K miles. then your getting bang-for-your-buck but your also risking repair costs should something go wrong. Or the other scenario is if you can jump in to a used car that's only 1 year old and the car already took a big depreciation and your coming in at a sweet spot, i.e. car was $33K, and you pick it up with 7K miles for $24K and it still has 4 years of warranty left.
If you were to buy the used car for $22,000 and drive for 2 years (5 years from the "new" date) the car is only worth $15K after 5 years. The used car cost you $7K for 2 years. which is $3500 a year. The New 2007 cost $33K but after 5 years of driving, it's worth $15K, your cost of driving was $18K, or $3600 a year. For arguments sake, it's a wash on the annual cost of driving. So it doesn't really cost you $11K, it cost you nothing more. you may have "paid" 11K more, but after 5 years of driving it, you have $11K more in value in the car. .
Does that make more sense? you can't look at the the numbers at face value, you have to look at the cost of driving a car over time. And in the example above it's costing you the same to drive a new car with better features etc...!
Used cars work out good when they at like 100K miles and you pay $7K for it and your looking to run it into the ground for another 100K miles. then your getting bang-for-your-buck but your also risking repair costs should something go wrong. Or the other scenario is if you can jump in to a used car that's only 1 year old and the car already took a big depreciation and your coming in at a sweet spot, i.e. car was $33K, and you pick it up with 7K miles for $24K and it still has 4 years of warranty left.
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Actually it is a great thing that I leased my car. If I hadn’t leased it I would have to take a serious loss on it when I sell it. Now I can just wait till the lease end and hand the car back to them. I just paid about $50 less per month for a car that the dealer underestimated the value of. Leasing can be a great thing in some cases.
In my cases I only pay $450 a month for an 05 with premium, sport, and aero packages. That is a pretty good deal considering I won’t loose any money when I turn it in after only 39 months. If I had bought my car at that time then I would probably have about $4000 of negative equity at the end of 39 months. The only disappointing thing to me is that I have to wait to get the new car. Oh well, I think I can maybe make it.
In my cases I only pay $450 a month for an 05 with premium, sport, and aero packages. That is a pretty good deal considering I won’t loose any money when I turn it in after only 39 months. If I had bought my car at that time then I would probably have about $4000 of negative equity at the end of 39 months. The only disappointing thing to me is that I have to wait to get the new car. Oh well, I think I can maybe make it.
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Remember, KBB is the only thing that matters when trying to get out of a lease early. The dealer gets to set the value of the car when you go to break a lease. That is what makes breaking a lease so hard.
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Joined: Nov 2006
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From: Connecticut
Originally Posted by DaveB
I don't completely agree with your rational. I bought my 2003 sedan 26 months ago for $25K. The factory sticker said $34,500 so I assume the originial buyer paid ~$32,500. Right now, I could easily get $22K for my car in Kansas City. That's only a loss of $3K. That first owner lost well over $10K in 18 months of use.
$1 per mile!!!!!!!
Originally Posted by mpgxsvcd
Remember, KBB is the only thing that matters when trying to get out of a lease early. The dealer gets to set the value of the car when you go to break a lease. That is what makes breaking a lease so hard.
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checked today and the KBB value of my 05 actually increased about $700 since the beginning of the month. One of the dealers said that that would happen. He claimed that a lot of cars will increase in value as the March,April, May time frame rolls around. I wonder how high it will go. Oh well, maybe I will be able to get a new G after all this year?
Joined: Nov 2003
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From: Rothesay, New Brunswick, Canada
Originally Posted by mpgxsvcd
checked today and the KBB value of my 05 actually increased about $700 since the beginning of the month. One of the dealers said that that would happen. He claimed that a lot of cars will increase in value as the March,April, May time frame rolls around. I wonder how high it will go. Oh well, maybe I will be able to get a new G after all this year?
