Age old question...Buy or lease...long

mikester · 09-15-2004, 10:39 AM

Alright - The wife and I are considering replacing The Xterra with a more economical car.

We've got a child on the way so we want to have some space (which the SUV is great for) but we also want better gas mileage as most of her driving is city driving.

Here's the list of problems.

We want the car payment to be low. We're starting a family and just bought a house. We both make good money but we want the new car payment to be less than the Xterra (~just over $400).

The Xterra (2001, SE 4x4) isn't worth as much as we owe on it. Typical as the used car market is so upside down of late (Except for my Porsche of course) the Xterra is a horrible trade-in and when I tried to do a private sale on it I failed miserably. It's been about a year since I attempted that via the online version of the auto trader. Had a few bites but nobody serious. I still might attempt it again as it is a popular SUV around these parts and it's in great shape.

The Xterra is due for some major maintenance. At 60k the tires are ready to be replaced and the fluids all around need to be replaced as well as a few other tune up style requirements. So - the choice is now - do all the maintenance or trade it in. If I tried to sell it now I'd have to get those things done to it for it to be sellable.

If I can trade it in and spend that money I would have spent on the maintenance to get out of it and into a car the wife likes then I'll be cosmically ahead.

That leads to the next problem. The cars we like and the cars that meet the requirements we've set don't match at all.

Requirements:

~$20k
~24 MPG city (give or take a few)
Manual Transmission

She really likes the Passat wagon and in fact she had a leased Passat when we met. We let that lease run out since I had the Xterra and the Porsche. Now she drives the Xterra (and the Porsche whenever she wants to) but she's a typical California granola head girl (I love it though) and she wants something that fits her ideals. The problem with the Passat wagon is that it doesn't get decent enough mileage for her so now she's looking at the Jetta wagon. We both like it but we're not sure it's big enough so I think we’ll try to test drive one this weekend.

She also loves the Honda CR-V's but particularly the older body style. Problem with the Honda is that they don't seem to come with a manual in the 2WD models. I need to research that one a bit more though.

Other than that – what she likes is limited (I can’t fault her really considering my choice of transportation), she doesn’t find any of the American cars particularly attractive and she feels ordinary in considering the run of the mill sedan.

So, after all that she came to me and suggested that we look into a lease of something like the Jetta wagon (If we like it) which is what I was considering as well. My experiences with leases so far have not been terribly positive but not terribly negative either. The lease on her Passat was good and if it wasn’t a 4motion V6 that got poor city mileage we would have bought it. So – our thought is to lease something for a year or two and then revisit it at that time when hopefully the hybrid Market may be a little better or the conventional cars are a little more attractive.

I’m also looking at the used cars I know she likes (Jettas and CR-Vs) to see if maybe we can buy something outright reasonably and then just attempt to sell the Xterra again privately (likely at a loss).

Whatcha think?

RickM · RickM's Garage

The first generation CRV received low marks in their mini-ute category. How about a Ford Escape Hybrid? It will probably be much less than $400 on lease.

The manual shift may be a problem though.

I believe the type of car you describe is an up-and-coming segment. I'd like a vehicle like this but instead of manual I'd want 4-wheel drive.

mikester · 09-15-2004, 10:52 AM

The wife would go for an Escape in a heartbeat but Ford is only making a few for 2005.

Supply will not meet demand and thus the price will be higher than the suggested retail much like it is for the prius (~$30k).

SteveStromberg · 11:12 AM

How about a Crown Vic Just did a search and there are some on the lot in OC, listing at $25K but they are not going to sell for that. You could get them down to the $20k range. as the 2005 are are now on the lot.

Big Ed · 09-15-2004, 11:12 AM

Hey Steve, they have 24 MPG city manual transmission Crown Vics in CA? I think all we get on the east coast is crappy huge overweight gas guzzling V8 automatics.

You guys in CA get all the good stuff.

mikester · 09-15-2004, 11:13 AM

Besides that a Crown Vic ain't gonna be something my wife or any other CA girl wants to drive - it doesn't meet the requirements.

Quote:

Originally posted by Big Ed
Hey Steve, they have 24 MPG city manual transmission Crown Vics in CA? I think all we get on the east coast is crappy huge overweight gas guzzling V8 automatics.

You guys in CA get all the good stuff.

We do have Natural Gas powered Crown Vics here - not sure if that is what Steve's talking about though.

einreb · 09-15-2004, 11:21 AM

As for selling....

I've sold 2 cars to CarMax (assuming they have them near you?). I sold them a 2 year old Passat for $3.5 k less than I paid (not including taxes) and an old Maxima that the dealer offered $800... carmax gave me $1800.

Neither occasion did I buy a car from them. It was a little more of a hassle than trading in to a dealer, but no hassle as to compared with a private party and I felt no guilt about any issues with the car like I would have if I sold it to an individual.

We have one small rugrat and have a Jetta 1.8T GL wagon. Tons of power (too much for the base wheels) and enough room for us. It is however... a 'chick car'.

If I had it to do over again, I'd have gone with the GLS 5speed... rather than the tip GL. We paid under 20k.

The other option might be a 5 speed Outback... with the new models out, you might be able to pick up a good deal on the outgoing model year.

SteveStromberg · 11:33 AM

Actual they get about 20 in town maybe more as everyone pulls over and lets you by LOL

Here is a place that sells P71 CV's these are the One to get
Just watch COPS

These will do 200K miles no problem I know a livery driver who does Airport shuttling he has 5 of them All Black and debadged and Tinted . He likes them better than the Lincolns he used to use
http://www.used-police-cars.com/03-black-police-interceptor.html

http://www.used-police-cars.com/cardetails.html

http://www.used-police-cars.com/policecars.html

RickM · RickM's Garage

I wonder if the Ford Escape's Mazda counterpart will be offered in Hybrid configuration. I have some connections there.

mikester · 09-15-2004, 11:54 AM

Quote:

Originally posted by einreb
As for selling....

I've sold 2 cars to CarMax (assuming they have them near you?). I sold them a 2 year old Passat for $3.5 k less than I paid (not including taxes) and an old Maxima that the dealer offered $800... carmax gave me $1800.

Neither occasion did I buy a car from them. It was a little more of a hassle than trading in to a dealer, but no hassle as to compared with a private party and I felt no guilt about any issues with the car like I would have if I sold it to an individual.

We have one small rugrat and have a Jetta 1.8T GL wagon. Tons of power (too much for the base wheels) and enough room for us. It is however... a 'chick car'. If I had it to do over again, I'd have gone with the GLS 5speed... rather than the tip GL. We paid under 20k.

The other option might be a 5 speed Outback... with the new models out, you might be able to pick up a good deal on the outgoing model year.

I'll have to check into that Carmax thing. I think we do have one around here.

As far as the outback is concerned - the mileage is just too low in the ciry because of the AWD. Otherwise - it's a great car.

einreb · 09-15-2004, 12:12 PM

Quote:

Originally posted by mikester

As far as the outback is concerned - the mileage is just too low in the ciry because of the AWD. Otherwise - it's a great car.

21/28 for the 2004 5 speed 4 cyl. But keep in mind that it takes regular fuel rather than the premium required by the VW.

how about a new mazda 3 Wagon? they got a bit bigger. do they sell 6 wagons for less than $20k? I've heard great things about those cars.

mikester · 09-15-2004, 12:14 PM

Quote:

Originally posted by einreb
21/28 for the 2004 5 speed 4 cyl. But keep in mind that it takes regular fuel rather than the premium required by the VW.

how about a new mazda 3 Wagon? they got a bit bigger. do they sell 6 wagons for less than $20k? I've heard great things about those cars.

I think the 3 might be a bit small - but I'm not averse to looking at it. I think the 6 is freaking cool but it comes with a 6 cylinder with no 4 option and the mileage on it was a bit under the mark.

Still...that Carmax thing really intregues me.

mikester · 09-15-2004, 12:37 PM

PH&CK!!!!

I just checked KBB again on the value of my truck according to "Them" and it seems that in the last two days since I checked last time my value has gone down nearly $1000.

LeeH · 03:47 PM

From a financial standpoint it's almost always best to drive a vehicle until the wheels fall off... OK, maybe sell it just before then.

Saving gas is certainly a noble goal. Have you done the math on how much gas you use, how much gas you'll save, and how much money the new vehicle will save?

I have a good bit of gas-guilt driving my Trooper. It gets around 17 mpg. The Mazda 3 wagon I'd like to have gets around 26 mpg. If I drove 15,000 miles each year the Trooper would use around 882 gallons. The Mazda would use 576 gallons saving 306 gallons per year and at $2/gal that's $612/year saved or $51/month.

The problem is that my Trooper is only worth around $7500 at best. The Mazda 3 will be right around $20,000. The payment at 6% for 60 months on the difference would be $241.66... $190 more than the cost of the gas (Yes, I know there's more "cost" of using more gas than just the money - no need to lecture). Right now I only drive around 7000 miles each year so my useage is much lower. My next vehicle will be more efficient, but with only 75K miles on the Trooper that purchase may be a long time in the future - it's the most reliable vehicle I've ever owned.

Try the 3... it's amazingly BMW-like for the money!

mikester · 09-15-2004, 05:29 PM

That's exactly the situation I'm in.

Zeke · 09-15-2004, 07:33 PM

Mike, you said it all when you stated that the Xterra is worth less than what you owe. I fyou trade it in you won't get what you could sell it for privately and they will roll the balance into the new car. That's just bad business. You can use LeeH's example and add in the negative.

This probably is not a good time for you to trade cars even if your payment is a little high. If you are in the latter period of the financing, your principal vs. interest is getting favorable, meaning you are building equity faster, even though a car is a negative investment.

I wouldn't put too much faith in KBB. It's a racket and the real BB is still a subsciption only device. I think it's the Gold book, or something that you find in the sales manager's desk. The BB has just become a TV Guide.

My advice would be to hold off, pay the Xterra down since your payments are not as interest top heavy and take another look in 2006. The wife can't have everything, going green right now is gonna cost you too much green.

LeeH · 09-15-2004, 07:46 PM

And just in case you're tempted - check out #7 on this list of dealer scams, "We'll pay off your car no matter what you owe!"

http://www.carbuyingtips.com/scams.htm

mikester · 09-15-2004, 07:56 PM

Quote:

Originally posted by Zeke
Mike, you said it all when you stated that the Xterra is worth less than what you owe. I fyou trade it in you won't get what you could sell it for privately and they will roll the balance into the new car. That's just bad business. You can use LeeH's example and add in the negative.

This probably is not a good time for you to trade cars even if your payment is a little high. If you are in the latter period of the financing, your principal vs. interest is getting favorable, meaning you are building equity faster, even though a car is a negative investment.

I wouldn't put too much faith in KBB. It's a racket and the real BB is still a subsciption only device. I think it's the Gold book, or something that you find in the sales manager's desk. The BB has just become a TV Guide.

My advice would be to hold off, pay the Xterra down since your payments are not as interest top heavy and take another look in 2006. The wife can't have everything, going green right now is gonna cost you too much green.

Thanks Milt - I never intended to let the dealer pay it off and put negative equity into my new financing. In that event - which I expected I would just pay it out of pocket.

Clearly this is a bad idea and I should just keep the damn thing (which I don't terribly mind as I like it).