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  #13  
Old 04-15-2015, 11:00 PM
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Re: Lease vs Run into the Ground vs Replace every 1.5 years

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Originally Posted by MAXGroup View Post
This needs to be calculated on a case by case basis. But just as it is obvious that the cost is not linear.
You loose most of your depreciation on the day you take the new car from the lot.
Then you have a sweet ownership spot before major maintenance or breakage kicks in.

I buy my cars and trade them in around every 2 to 3 years. I think this is the sweet spot for American cars.
You don't pay any MTC and there is something exciting that was added to your car that makes the new one nicer.
I used to think people were nuts that bought every 2-3 years. Maybe I'm the dope keeping them 10-12.

So many co-workers and relatives would have an existing loan and if they could come out of the showroom with the same car payment and new car they were thrilled.

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  #14  
Old 04-16-2015, 12:21 AM
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Re: Lease vs Run into the Ground vs Replace every 1.5 years

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Originally Posted by MAXGroup View Post
I buy my cars and trade them in around every 2 to 3 years. I think this is the sweet spot for American cars.
You don't pay any MTC and there is something exciting that was added to your car that makes the new one nicer.
That pretty much sums up the way I deal with my vehicles, too.
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Old 04-16-2015, 12:25 AM
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Re: Lease vs Run into the Ground vs Replace every 1.5 years

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Originally Posted by mswlogo View Post
I used to think people were nuts that bought every 2-3 years. Maybe I'm the dope keeping them 10-12.
Funny thing is that many people think about leasing in a similar way by stating that you would basically pay on something you would never own.

And then, they tell you they finance their cars for 60 months and by a new one every 3 years...
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  #16  
Old 04-16-2015, 07:21 AM
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Re: Lease vs Run into the Ground vs Replace every 1.5 years

@ MSWLOGO

I think your logic and your experience only applies to vehicle upgrades, along with a few other concepts that cannot be applied across the board and will not reflect most consumer experience.

Take that 37,500 amortized over 10 years. One way of doing it is to pay cash all that amount plus whatever taxes and walk out knowing that you own the car. And then mentally do the math - keep the car 10 years and it translates to whatever $/month - for sake of numbers 37,500 / 120 months = 312 $/mo. Of course sales tax increases that amount - and sales tax varies from state to state which will eventually eat into the profit because every time money (or goods) change hands, there is taxation and someone has to "eat" the taxes. And then of course it is the fact that most people (myself included) finance the vehicle. So there will be interest. And banks and rates that change.

And then we have the fact that you upgraded your car. I looked into getting into a newer 2015 car, exact trim as mine (Limited with 3 packages) at the end of 2014 and I would have lost some 4000 dollars and would have increased my monthly payment by some 50 bucks. Your up-trade commanded a better selling price than a straight up trade across the same trim level. The same Grand Cherokee trim level went up about $1600 dollars over the past 2 years.

Yes, there is a way of doing what you described. But it also boils down to always losing some money. The other things to remember is that a large number of people buy extended warranties. Myself included. Which you can't transfer directly to the new car, you get a prorated value back which you apply to the new car and there's new taxation etc.
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  #17  
Old 04-16-2015, 10:47 AM
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Re: Lease vs Run into the Ground vs Replace every 1.5 years

So many variables here!

You did get a great deal to trade up there, ms'...of course, there's no guarantee that you would get just as good next time. There's always a bit of risk around that when it comes to future value.

For some folks, changing vehicles every 3-4 years is a combination of preference for something new as well as the 'stability' of always being in warranty. If they are not high mileage drivers, a lease may be very attractive in this respect, too.

I used to change vehicles more frequently and even did leases for awhile, but the last few I've held for 5-6 years and purchased. My mileage kicked up a bunch since 2009 due to a change in work responsibility and other factors made buying more advantageous. But I've never held a vehicle for longer than 7 years to-date. I doubt I will with my current JGC, either, because of the miles I'm piling on.
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  #18  
Old 04-16-2015, 10:52 AM
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Re: Lease vs Run into the Ground vs Replace every 1.5 years

Quote:
Originally Posted by f1anatic View Post
@ MSWLOGO

I think your logic and your experience only applies to vehicle upgrades, along with a few other concepts that cannot be applied across the board and will not reflect most consumer experience.

Take that 37,500 amortized over 10 years. One way of doing it is to pay cash all that amount plus whatever taxes and walk out knowing that you own the car. And then mentally do the math - keep the car 10 years and it translates to whatever $/month - for sake of numbers 37,500 / 120 months = 312 $/mo. Of course sales tax increases that amount - and sales tax varies from state to state which will eventually eat into the profit because every time money (or goods) change hands, there is taxation and someone has to "eat" the taxes. And then of course it is the fact that most people (myself included) finance the vehicle. So there will be interest. And banks and rates that change.

And then we have the fact that you upgraded your car. I looked into getting into a newer 2015 car, exact trim as mine (Limited with 3 packages) at the end of 2014 and I would have lost some 4000 dollars and would have increased my monthly payment by some 50 bucks. Your up-trade commanded a better selling price than a straight up trade across the same trim level. The same Grand Cherokee trim level went up about $1600 dollars over the past 2 years.

Yes, there is a way of doing what you described. But it also boils down to always losing some money. The other things to remember is that a large number of people buy extended warranties. Myself included. Which you can't transfer directly to the new car, you get a prorated value back which you apply to the new car and there's new taxation etc.
I mentioned the Trade Up being part of it. But I think it had very little to do with it. Reason is, it was only about $5000.00 higher trim. Second I saw folks asking about trade in values on almost exactly the same vehicle and they got responses that were very close to what I got there was nothing exceptional on the deal I got). Some broker responded he'd give the person asking ~$31K with NO trade.

You are not correct on the taxes. I only paid the difference in taxes.

Keep in mind that even if it was a little more to own a newish vehicle for those 10 years. I expected it to be like double or triple the cost of keeping the same vehicle for 10-12 years. If anything, the difference is in the noise.

Yes, excise taxes, insurance, fees all add up keeping a fresh vehicle.
But so does, wear items, tires, brakes, batteries. Repairs and/or extended warranties (with deductibles), regular scheduled service appts. keeping an old vehicle.

I'll bet if you added up both of those it would be a wash.

I'm not trying to argue one is cheaper than the other. I'm saying it's pretty damn close. It's very hard to measure every penny in either scenario over the long haul.

I don't think loans make much difference. The rates are so low it's practically noise. If rates were higher it probably would make a difference. Once initial vehicle is paid for (which can be hard and long for some folks) the difference on trade-in would be a small loan. I actually got 0% financing on the limited.

If you are buying on such a short cycle you can afford to wait for the deals or best time of year. Last year models, Washington's birthday incentives etc. But you do have to be careful with last year models because those will have lower value sooner. I've done really well on my wifes VW CC and this current Jeep around Washington's birthday.


I don't know where you were in the cycle when you attempted. But perhaps you were a little too soon and need to get more value out. Or it wasn't the best time of year to get a good deal.
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  #19  
Old 04-16-2015, 01:11 PM
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Re: Lease vs Run into the Ground vs Replace every 1.5 years

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Originally Posted by mswlogo View Post
I agree you can make it look like what you want. But that's why I am asking. Did I miss something. It makes no sense it's effectively cheaper to keep replacing often than to run it into the ground.

I'm really shocked. I really expected to only get like $27K on the trade.
I know used prices are crazy high these days. I'll bet the dealer will probably sell my limited for like $34K or more. What nut would spend $34K for used limited. When you could get a new one (similarly equipped) for a few K more.


Too funny. I just found my old Jeep listed for $34K


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I know the Owner and GM of Brigham Gill and I've sold them 50+ cars. They're morons and overpay every time. Lucky you!
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Old 04-16-2015, 01:54 PM
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Re: Lease vs Run into the Ground vs Replace every 1.5 years

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Originally Posted by GooberPHX420 View Post
I know the Owner and GM of Brigham Gill and I've sold them 50+ cars. They're morons and overpay every time. Lucky you!
Were you in the car business?

Personally I dont see buying a new car/Suv every few years as the lowest cost option, but if the numbers work, I guess.

I do know a lot of broke people who are always in new rides every few years.
I Buy my cars cash and basically keep em Might be driving older cars, but they are paid for and my house is paid for, so now I can go out and dump 50K on a new car and smile knowing I own it.

I am guessing WK2's must hold value pretty good to trade in and not loose your shirt.
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  #21  
Old 04-16-2015, 02:56 PM
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Re: Lease vs Run into the Ground vs Replace every 1.5 years

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Old 04-16-2015, 04:53 PM
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Re: Lease vs Run into the Ground vs Replace every 1.5 years

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Originally Posted by Turbozcs2003 View Post
Were you in the car business?

Personally I dont see buying a new car/Suv every few years as the lowest cost option, but if the numbers work, I guess.

I do know a lot of broke people who are always in new rides every few years.
I Buy my cars cash and basically keep em Might be driving older cars, but they are paid for and my house is paid for, so now I can go out and dump 50K on a new car and smile knowing I own it.

I am guessing WK2's must hold value pretty good to trade in and not loose your shirt.
I buy and sell cars wholesale.
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  #23  
Old 04-16-2015, 05:00 PM
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Quote:
Originally Posted by 14SummitHemi View Post

Definitely helped but I see you likely were under 25 with that rig. And now you are over and 25 is a decent crossover point for insurance rates as well.
That is true, I passed that milestone a couple years back but didn't notice the drop everyone talks about. Seems to be more gradual with my insurance co. My other car stayed more or less the same between 2013 and 14.
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