The insanity of the car market....

[fitness1]

It takes a lot to shock me, but it happened today....

So, for background, I'm currently driving a 2020 Accord that I did a one time pay lease on (up front) Oct 31, 2020. The full sticker including destination was 25,255 and the 36 month, 10k per year was 7780.00 all in. I'm considering buying it out soon and sell it to move into a new lease. The equity over my payoff amount is just too enticing. I only have 18k on it and it looks just as good as the day I rolled it off the lot.

Over the last few weeks I've been doing a lot of online research and dealer visits (on Sundays!) and honed in on a car I may be interested in.

This car has a full sticker of 21,585 and I requested from a couple of local-ish dealers a quote for the same lease I have now (36/10k) For reference, I was braced for something in the 10k given the 15% lower price and current market conditions. My emails were detailed and articulate - hoping I'd be taken "seriously"

From one I got a one line reply that was that said "the one time lease on that would be 14,390 - let me know your thoughts" (Uh - careful what you ask for) 15% off the 7780 I paid for my Accord is 6300 and change - I wasn't expecting a 125% increase. The 10k range I spoke of above would be 53% for reference.

The other was telling me that: "We don't recommend paying for your lease up front - if you lease your car and total it the next day, you lose all that money" Apparently he hasn't been educated in the state law that a lease has to have gap insurance included.

Looks like I'll be driving my beautiful Honda for a while.

[Jeff Scott]

Originally Posted by fitness1

Looks like I'll be driving my beautiful Honda for a while.

Nothing wrong with that!

[fitness1]

Originally Posted by Jeff Scott

Nothing wrong with that!

No kidding - it's Honda number 17, and the best driving car I've owned.

[rllink]

I don't understand leasing cars and what benefits come from it so I don't really understand the insanity.

[fitness1]

Originally Posted by rllink

I don't understand leasing cars and what benefits come from it so I don't really understand the insanity.

Lease cars with very high resale if you don't drive much, keep them super clean and you can actually net some money if you buy it out and resell it yourself and apply it toward the next lease - also paying for them up front saves you 12% or more typically.

Through that process, I ended up getting my Accord for about 180 a month when they were going for 249.

It's simple math to understand the insanity - apples to apples the new car I was considering has apparently gone up 125% on the lease, given the market fluctuations over the last 2 1/2 years.

[rllink]

Originally Posted by fitness1

Lease cars with very high resale if you don't drive much, keep them super clean and you can actually net some money if you buy it out and resell it yourself and apply it toward the next lease - also paying for them up front saves you 12% or more typically.

Through that process, I ended up getting my Accord for about 180 a month when they were going for 249.

It's simple math to understand the insanity - apples to apples the new car I was considering has apparently gone up 125% on the lease, given the market fluctuations over the last 2 1/2 years.

Got it. Sorry it didn't go as planned.

[rokdog49]

We are rare.
We buy our cars outright. When we are ready, we sell (no trade-ins ever). Then we take that cash plus some of our own and go buy the new one.
We generally drive them for about 8 years, they are in immaculate shape and have less than 60k miles on them when we sell.
No payments, no monthly leasing, no interest, no worries.
It’s kinda’ anti-American.

[fitness1]

Originally Posted by rokdog49

We are rare.
We buy our cars outright. When we are ready, we sell (no trade-ins ever). Then we take that cash plus some of our own and go buy the new one.
We generally drive them for about 8 years, they are in immaculate shape and have less than 60k miles on them when we sell.
No payments, no monthly leasing, no interest, no worries.
It’s kinda’ anti-American.

That's a good plan too....as long as it's a brand that holds it's resale. That really is the key.

I do it my way because it frees up the difference between an outright purchase and a up front lease to invest - especially now with CD's at 5%!

[Pura Vida]

Cars are a cost avoidance for me, so I approve of this thread.

I strayed from Japanese cars once (well, technically twice, since we bought two M-B cars at the same time) in the last 26 years... never again. Both Acuras (2015, 2017) are paid off, and we have no plans to trade them. There's a chance my wife's TLX could get handed down to my daughter, who begins college next year (but no car for at least the first year).

My strategy is to buy used, clean from Carmax, and we trade in with them. Every time I do the research, their trades and sales prices are to the $$ with my expectations, and their service and support has been excellent. Plus, I can't stand to negotiate with car dealerships... give me a price, and I'll take it or leave it.

[Nymuso]

I was gassing up my 2008 Jeep Wrangler when a sweet ride pulled up next to me. It reminded me of a Chevy Metro I had once owned but turned out to be a 2002 Toyota Yaris. It had once been red but was now all oxidized and faded. Guy said it had 183,000 miles and ran like a top. He bought it sight unseen with his credit card before he retired to avoid the cost commuting in his F-150. Now it’s his local runabout, which is what I use my Jeep for. I ain’t never selling my Jeep and I don’t think this guy will sell his Toyota.

There’s a guy around here who uses a mid ‘20s Model T Ford as a runabout. I’ve seen it on the road and only once in the grocery store parking lot. But it’s the real deal.

[rokdog49]

Originally Posted by fitness1

That's a good plan too....as long as it's a brand that holds it's resale. That really is the key.

I do it my way because it frees up the difference between an outright purchase and a up front lease to invest - especially now with CD's at 5%!

As long as you aren’t borrowing to do the buyout or aren’t paying interest, I can see how that can work well.
As far as brands that hold resale, we have owned Honda’s, Toyota’s and now Kia’s
All of these do quite well in that regard and are generally in demand.
My wife and I adhere to the philosophy of not paying interest to anyone…for anything.
We do use a credit card which is paid in full monthly and we get a cash back bonus on our purchases. Banks don’t like our ilk.
You pay us, we don’t pay you. We’ve spent the last 25 years debt-free, not because we are wealthy, because we lived well within our means.
You’re correct about the CD’s too. Huntington Bank has a 14 month CD that pays 5.18% APY on a minimum investment of $1000. We will soon be turning one over from another bank in May and as of right now, that’s where that one is going.
We “ladder” CD’s and have done so for the last three years since the rates began to climb. At our age, it’s a far better investment than stock market mutual funds.
No ups and downs…just ups.

[fitness1]

Originally Posted by rokdog49

My wife and I adhere to the philosophy of not paying interest to anyone…for anything.
.

Bingo - I haven't "borrowed" in 25 years.

[imwjl]

Originally Posted by rokdog49

We are rare.
We buy our cars outright. When we are ready, we sell (no trade-ins ever). Then we take that cash plus some of our own and go buy the new one.
We generally drive them for about 8 years, they are in immaculate shape and have less than 60k miles on them when we sell.
No payments, no monthly leasing, no interest, no worries.
It’s kinda’ anti-American.

For a while I was really into autos and driving a lot helped. Still, yours and our method is very American. A whole lot of us grew up with values we kept where there is caution to do what we can afford and not be wasteful.

We keep looking at the market for a few reasons and if only for my other so into cars. Availability is not so bad anymore, still no bargains, and it's not such a free money world now.

Maybe 6 weeks ago our VW dealer called us because they had a rare Golf R for my wife to look at. We assessed a few brands and lots they have. They also wanted our rare manual transmission AWD for their used inventory so promoted leasing something in interim. The salesperson pointed out the no free money era we're back to meant no crazy good lease deals like my mother currently has with them on an Acura.

To me it is also very American to go our route of driving more average and some aging autos but having two nice properties just months from being mortgage-free.

[Murphy Slaw]

If NOBODY bought a new car for 6 months (zip, zero, none) they would be a lot more accommodating.

I know people who paid ABOVE msrp during covid because they "had to have it now".

Supply / demand.

I say give them 6 months to think about how they treat customers and how to negotiate and they'd be "happy" to sell you a new car.

[fitness1]

Originally Posted by Murphy Slaw

I know people who paid ABOVE msrp during covid because they "had to have it now".

Oh, that is still going on. MANY dealers have "market adjustment" prices listed right on the site (MSRP +1500-2000 or more depending on the vehicle)

The other trick is they add on paint protection that costs 1000.00 - yeah, right.