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View Poll Results: I think he should:

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  • Go ahead get the car

    13 61.90%
  • Do not get the car save the money

    5 23.81%
  • You should instead get this car {write it down}

    3 14.29%
  • You should instead do this {write it down}

    0 0%
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Thread: New Car?

  1. #26
    SitePoint Addict markchivs's Avatar
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    Quote Originally Posted by loanuniverse

    As I was driving my beat up yet still fully functional 1996 cavalier sedan to work a couple of weeks ago, it downed on me that life is short and maybe I should replace it. I am not a person that really cares about impressing or looks, but it is kind of funny that people that report to me a couple of years out of college are driving a better car than I do. Additionally, the damn cavalier has started to squeak.

    So I am here deciding whether or not I should go ahead and commit myself to something that will cost me on the neighborhood of $15,000 for the next three years. I am thinking of leasing this

    http://autos.yahoo.com/newcars/cadil..._overview.html

    What do you think I should do?

    Aim hi!!!!

    If your not driving a Jag XKR within 6 months your not working hard enough:
    http://www.mcarsweb.com/jaguar/xkr.jpg



  2. #27
    SitePoint Guru loanuniverse's Avatar
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    In most cases, I will agree with those who say that leasing is usually a bad proposition. However, in my case it is not the case.

    1. I drive about 8,000 miles average per year, my job is really close.
    2. I am working on a very good deal $1,267 down, which includes tax, tag, title and all fees. The monthly payment is still being worked out, but I have a firm $322 a month {including tax} on the table from the dealer. I still think I can get it down a couple of bucks.
    3. I have a lot of rebates, and the way that they are being applied is in question, but I talked to the sales manager and he knows that I know that I can still walk away from it so he is willing to work on the monthly payment.
    Total cost of ownership for me in the next five years.

    $1,267 Upfront money

    $11,376 Monthly payments estimated

    $12,643 Total

    I will be driving that car for the next three years for $12,643 and the residual value will be about $18,000. Trust me, it is a good deal for this car.


  3. #28
    HI silver trophy Silverado4x4's Avatar
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    Also, sometimes leasing isn't a bad option if it is for business use, because of the write-off.

  4. #29
    SitePoint Wizard silver trophy Jeremy W.'s Avatar
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    Reality check: He'll never be able to get that quality of brand new caddy for 5 years doing anything but leasing.

    Leasing isn't a throwaway anymore than renting is a throwaway. When you lease a car there is no responsibility beyond bringing it back in good condition and under mileage. And with recent mileage adjustements to 25000 miles per year, most people now stay way under that.

    Also, most car lots are marking up used cars by ... Guess what ... Wait for it... 30%.

    Realistically, the best value on cars are off-lease cars where you make a same-day offer, as you're about 50/50 likely to get the car at what it's worth, which is impossible in any other deal.

    Plus, your finances are off.

    Leasing: 15K
    Buying: 50K... 40K in payments made after 3 years. Sell it for 25K. So, he's out 15K. If he can get a good sale. After ad costs, transfer costs, added insurance costs, less coverage in warranty, etc.

    The costs are fairly similar, but you bear a greater responsibility with owning. A greater responsibility that doesn't pay off.

    As I said earlier, it's a decent value if you can get off lease, or even better lease cancellation, vehicles. But the whole "leasing is evil" thing doesn't wash anymore. It used to. But it doesn't anymore.

    Try running the numbers sometime. You'll find you get a better quality vehicle, with less responsibility and less burden. It's not right for everyone, but remember he's also got a trade in which will make a larger difference on his monthly payments than it would if he went for financing.
    SVP Marketing, SoCast SRM
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  5. #30
    SitePoint Wizard silver trophy Jeremy W.'s Avatar
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    Quote Originally Posted by Silverado4x4
    Also, sometimes leasing isn't a bad option if it is for business use, because of the write-off.
    For businesses, the only way to go is leasing. Capital expenses are evil, operational are easier deductions.
    SVP Marketing, SoCast SRM
    Personal blog: Strategerize
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  6. #31
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    I agree with loanuniverse

  7. #32
    Non-Member DaveMichaels's Avatar
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    The Lease Tax Break - A CAR-bohydrate You Should Really Avoid
    Now I bet some of you leasing types are boiling right now, and you want to hit me with the "Yeah, well what about the great tax break you get for leasing? That makes a ton of sense especially if it's for my business." I disagree. Even for a business. But that's a different issue. This is a finance column for individuals, not business owners. And if we're talking about leasing for personal rather than business reasons, you have got to be joking to use the tax excuse. Today we have the lowest tax brackets in your lifetime. For every dollar you spend on a lease, you might get back 20 cents or so. If I am not mistaken, that still means you are paying 80 cents to lease. That's 80 wasted cents that makes no sense.
    http://biz.yahoo.com/pfg/e16buylease/art012.html

    "For every dollar you spend on a lease, you might get back 20 cents or so. If I am not mistaken, that still means you are paying 80 cents to lease. That's 80 wasted cents that makes no sense."
    That says it all - it's like thinking that it is better to continue having a mortgage for the tax break rather than paying it off and owning the house.

  8. #33
    Non-Member DaveMichaels's Avatar
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    Quote Originally Posted by Jeremy W.
    Also, most car lots are marking up used cars by ... Guess what ... Wait for it... 30%.
    Wow, those must be some really shady operations. All the places I've considered buying from are pretty in-line with blue book values and have extensive vehicle inspection programs

  9. #34
    SitePoint Wizard silver trophy Jeremy W.'s Avatar
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    Actually, in Canada it IS better to continue paying off a mortgage for tax reasons.
    SVP Marketing, SoCast SRM
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  10. #35
    ☆★☆★ silver trophy vgarcia's Avatar
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    Quote Originally Posted by DaveMichaels
    That says it all - it's like thinking that it is better to continue having a mortgage for the tax break rather than paying it off and owning the house.
    With the low mortgage rates in the past year, you ARE better off paying the mortgage and not buying the house outright if you have the money to do so and can invest it properly. If you can earn a 10-15% return on your money while only paying a 5-6% mortgage why wouldn't you?

  11. #36
    Non-Member DaveMichaels's Avatar
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    Quote Originally Posted by vgarcia
    With the low mortgage rates in the past year, you ARE better off paying the mortgage and not buying the house outright if you have the money to do so and can invest it properly. If you can earn a 10-15% return on your money while only paying a 5-6% mortgage why wouldn't you?
    Or, through real estate appreciation you can earn a roughly 10-15% return on your money without paying a 5-6% mortgage.

    BTW, where can you earn a consistent 10-15% return, year after year?

  12. #37
    SitePoint Wizard silver trophy Jeremy W.'s Avatar
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    What property can you get a consistent return of 10-15% a year in real estate?

    A well balanced portfolio should net anyone 10% return per year. My coworker tried to argue this for over 2 weeks with him. In the end I helped him restructure his finances and he's now earning just shy of 1.5% a month in his first 3 months.

    It's always easy to argue anything idealogically, and that really seems like the only reason you're arguing this.

    You still haven't shown how loanuniverse could have gotten the car he wanted for 5K/year doing anything but leasing.

    Until you do you're just arguing semantics
    SVP Marketing, SoCast SRM
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  13. #38
    Non-Member DaveMichaels's Avatar
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    I just read that US real estate prices are increasing 7% per year on average. In California it's about 12-25% per year.

    A well-balanced portfolio that earns at least 10% every year? Show me how! Anything in the stock market has down years. It's over the long haul where you get about 10% (minus taxes, commissions, fees, etc.).

    For just three years, leasing a car may be better. But either way, it's a big money losing proposition.

  14. #39
    SitePoint Wizard silver trophy Jeremy W.'s Avatar
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    Cars are a big money losing proposition.
    SVP Marketing, SoCast SRM
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  15. #40
    Non-Member DaveMichaels's Avatar
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    Quote Originally Posted by Jeremy W.
    A well balanced portfolio should net anyone 10% return per year. My coworker tried to argue this for over 2 weeks with him. In the end I helped him restructure his finances and he's now earning just shy of 1.5% a month in his first 3 months.
    I'm curious as to what specifically was done in the restructuring. Is 1.5%/month expected to be the average? If a "well-balanced" portfolio includes cd's, bonds, etc. then those are surely lagging nowadays.

  16. #41
    Intoxicated with the madness petertdavis's Avatar
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    Buy a Honda. Chrysler products may look nice, but they're very low quality.
    Peter T Davis

    I buy forums - PM me if you're selling.

  17. #42
    Intoxicated with the madness petertdavis's Avatar
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    Got some issues with your caculator there? $322 per month at five years is $11,376? Not. And, when you cacluate cost of ownership don't forget those little things like insurance, maintainance, gas, and so on.


    Quote Originally Posted by loanuniverse
    In most cases, I will agree with those who say that leasing is usually a bad proposition. However, in my case it is not the case.

    1. I drive about 8,000 miles average per year, my job is really close.
    2. I am working on a very good deal $1,267 down, which includes tax, tag, title and all fees. The monthly payment is still being worked out, but I have a firm $322 a month {including tax} on the table from the dealer. I still think I can get it down a couple of bucks.
    3. I have a lot of rebates, and the way that they are being applied is in question, but I talked to the sales manager and he knows that I know that I can still walk away from it so he is willing to work on the monthly payment.
    Total cost of ownership for me in the next five years.

    $1,267 Upfront money

    $11,376 Monthly payments estimated

    $12,643 Total

    I will be driving that car for the next three years for $12,643 and the residual value will be about $18,000. Trust me, it is a good deal for this car.

    Peter T Davis

    I buy forums - PM me if you're selling.

  18. #43
    SitePoint Wizard silver trophy Jeremy W.'s Avatar
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    Quote Originally Posted by DaveMichaels
    I'm curious as to what specifically was done in the restructuring. Is 1.5%/month expected to be the average? If a "well-balanced" portfolio includes cd's, bonds, etc. then those are surely lagging nowadays.
    Heavily invested in the Canadian dollar 3 months ago before the rise (no real reason to invest in US anything these days). Took everything out of general mutual funds and balanced some biotech / tech with blue chip mutual funds (boutique funds in particular).

    And placed some Euro GIC-type investments (6%/year) underneath it all.

    In reality his portfolio boomed one month (CDN dollar), but that was an anomaly more than anything else, unlikely to be drastically repeated anytime soon.

    Hitting large percentages isn't hard, it's just harder to do consistently. To be honest, I'd invest in real estate if I had more than 100K, but I'd do it in rural areas, or I'd do it with income properties.

    In reality, I'd do it here in Winnipeg. Rental rates on a 100K home are 1K/month. The mortgage on that is only 500$/month. Even if the house price drops, you're still making well more than 15%/year.

    If you want to talk investments, feel free to start a new thread. There are a lot of MUCH smarter people than me here.
    SVP Marketing, SoCast SRM
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  19. #44
    Non-Member DaveMichaels's Avatar
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    Quote Originally Posted by Jeremy W.
    Heavily invested in the Canadian dollar 3 months ago before the rise (no real reason to invest in US anything these days). Took everything out of general mutual funds and balanced some biotech / tech with blue chip mutual funds (boutique funds in particular).

    And placed some Euro GIC-type investments (6%/year) underneath it all.

    In reality his portfolio boomed one month (CDN dollar), but that was an anomaly more than anything else, unlikely to be drastically repeated anytime soon.

    Hitting large percentages isn't hard, it's just harder to do consistently. To be honest, I'd invest in real estate if I had more than 100K, but I'd do it in rural areas, or I'd do it with income properties.

    In reality, I'd do it here in Winnipeg. Rental rates on a 100K home are 1K/month. The mortgage on that is only 500$/month. Even if the house price drops, you're still making well more than 15%/year.

    If you want to talk investments, feel free to start a new thread. There are a lot of MUCH smarter people than me here.
    OK, new thread:
    Investments

  20. #45
    SitePoint Guru loanuniverse's Avatar
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    Quote Originally Posted by petertdavis
    Got some issues with your caculator there? $322 per month at five years is $11,376? Not. And, when you cacluate cost of ownership don't forget those little things like insurance, maintainance, gas, and so on.
    Don't forget where I said "I still think I can get it down a couple of bucks.". I just came back from the dealer and my payment was negotiated down to $314 a month including tax, which means that the payments are:

    $314 X 35 = $10,990 {this is a 3 year lease with the first payment included in the $1,267 initial payment}

    I am aware of the insurance, gas and light maintenance expenses, but I figure those do not change much from the money that I spend with my already paid for car, so I was not factoring them in.

  21. #46
    SitePoint Enthusiast mav's Avatar
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    Quote Originally Posted by loanuniverse
    I understand that there are other entry-luxury cars in the market, but "buying american" when I can is important to me.
    All new cars have foreign parts. Ford owns foreign brands, such as Mazda, Land Rover, Jaguar to name a few. The new 05 Ford Mustang is produced in a Ford/Mazda factory alongside the Mazda 6, its chief designer is Japanese, who was just promoted to head SVT. Daimler Chrysler owns Mercedes and Chrysler. GM and Mitsubishi have collaborated in past projects. BMW, Honda/Acura, Toyota and many other foreign makes have factories here in the US, employing American workers to build American-made vehicles.

    This whole "Buy American" argument is ignorant.

  22. #47
    Intoxicated with the madness petertdavis's Avatar
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    I recently sold my Canadian made Ford, and now drive an American made Honda.
    Peter T Davis

    I buy forums - PM me if you're selling.

  23. #48
    ☆★☆★ silver trophy vgarcia's Avatar
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    My Mazda was made in Flat Rock, Michigan

  24. #49
    SitePoint Guru loanuniverse's Avatar
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    Quote Originally Posted by mav
    All new cars have foreign parts. Ford owns foreign brands, such as Mazda, Land Rover, Jaguar to name a few. The new 05 Ford Mustang is produced in a Ford/Mazda factory alongside the Mazda 6, its chief designer is Japanese, who was just promoted to head SVT. Daimler Chrysler owns Mercedes and Chrysler. GM and Mitsubishi have collaborated in past projects. BMW, Honda/Acura, Toyota and many other foreign makes have factories here in the US, employing American workers to build American-made vehicles.

    This whole "Buy American" argument is ignorant.
    The decision to buy an American car would be subject to argument if it were solely based from the point of view of where the final assembly of the vehicle was made. One could argue that this would not be as important if the car while under a foreign brand is still assembled in the US. One could even argue about the proportion of “value added” that is included between different models according as to where the parts are coming from. However, my decision to buy American is not solely based on this factor.

    I am worried about the repatriation of profits. I am also worried about these purchases of parts between a “foreign plant” and the related suppliers, which has been shown via studies {one of them performed by some finance teachers in my own school} to show substantial bias in favor of the overseas parent to the detriment of the taxable income in the US.

    The argument is not ignorant. That my friend is a heavy duty word that should be reserved when in polite company unless you are sure about your facts, which it does not seem like you are. Maybe you would benefit from reading Mr. Greenspan’s comment on America’s foreign trade that he made last week.

    BTW, my Cadillac's final assembly was in Lansing, Michigan.

  25. #50
    Your Lord and Master, Foamy gold trophy Hierophant's Avatar
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    Loanuniverse,

    I say get the car. It is obvious that the car would suit your needs, is the one that you are partial to and it will most likely make you happy and fulfill its requirements both for transportation and the status you wish to portray to your employees. Besides that you have found a good value that will allow you to upgrade in the future if you want to or you can refinance the outstanding value of the car and pay it off.

    The rest of this thread is just noise. Do what makes you feel the best about a large investment such as this. Only then can you achieve value for your money.
    Wayne Luke
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