Buy, Finance or Lease - the Car Conundrum

[GRG55]

Re: Buy, Finance or Lease - the Car Conundrum

Lots of modern cars will make it to 200k miles and beyond with little or no repairs...

...Contrast that with my Dodge Ram. Only one slight problem in 115k miles. Slight noise from alternator bearing. Changed it out myself for $100( dealer part) in about 20 minutes. The alternator for the LC was $350 and a nightmare to replace in comparison. I do all the work on my truck myself because I enjoy it, its easy to work on, and I know it is done correctly that way. Some vehicles make better sense to hold on to. Some are ticking time bombs when the finally do break...

The cheapest vehicles to own are the mass market ones. Pickups, mid-sized family cars, etc. That is a better indication in most cases of cost of ownership than any particular brand. Economies of scale means not only cheaper to purchase, but cheaper parts and better availability of good mechanics to work on them down the road. I also bought a Hyundai, because if you leave brand status out of the picture, it simply made the most sense. Cars in general are really good today.

My wife and I have His 'n Her 4x4 pickups. Mine's a Ford, her's a GMC. Both have more than 200k miles on them and I expect to get at least another 60k-100k out of each of them. The Ford is proving a bit more durable than the GMC, which is suffering from minor things like a couple of burnt out dash lights and a plastic bumper cover that cracked in the cold of a Canadian winter.

I like the same things as you about the much maligned American pick-up. They are overbuilt and thus incredibly reliable (I have had 2 previous Fords), easy to work on, cheap to fix, and they go pretty well anywhere, any time. The extra they cost in fuel you more than make up in cheaper parts and maintenance if you keep them a long time imo. We had high winds and blowing snow all day yesterday, with some pretty big drifts in the driveway of the bunker this morning. I haven't ploughed it yet, but my wife put her truck in 4WD and headed out to check her horses and then to town to run errands this morning. Try that in your hybrid jelly-bean.

[lakedaemonian]

Re: Buy, Finance or Lease - the Car Conundrum

Lots of modern cars will make it to 200k miles and beyond with little or no repairs. Its not just Toyota and Honda anymore. In fact, I'd say there isn't a 5-10% difference in most cars today in terms of long term reliability. Of course there are exceptions! Now how much is costs and how you are treated when it does break is still an issue. My last Toyota was a 1999 Land Cruiser with only 66k miles on it that was nothing but problems, leaving my wife stranded several times. On every occasion, at different dealers and independent mechanics, we would get bogus diagnostics or other ridiculous treatment. One dealer managed to lose our key, requiring a new COMPUTER to be installed because Toyota designed the stupid thing to require the original key to reprogram another! This was fixed in later models. Others would just start replacing parts without any real diagnosis. Finally I had to diagnose it myself. Bad ground on underside of engine. (Bad idea to put alternator on bottom of off road vehicle) Most likely Toyota is no worse than any other, but sometimes I think their supposed "superiority" makes it a sellers market, and they treat their customers worse because of it. Worst dealer experiences I've ever had. Ironically, the only lemon vehicle I've ever owned. My parents have two Lexus vehicles and love them and the dealers service. But they have spent a pretty penny on those cars also, even though they both have under 100k miles. They are good reliable vehicles, just expensive when they do break.

Contrast that with my Dodge Ram. Only one slight problem in 115k miles. Slight noise from alternator bearing. Changed it out myself for $100( dealer part) in about 20 minutes. The alternator for the LC was $350 and a nightmare to replace in comparison. I do all the work on my truck myself because I enjoy it, its easy to work on, and I know it is done correctly that way. Some vehicles make better sense to hold on to. Some are ticking time bombs when the finally do break.

The cheapest vehicles to own are the mass market ones. Pickups, mid-sized family cars, etc. That is a better indication in most cases of cost of ownership than any particular brand. Economies of scale means not only cheaper to purchase, but cheaper parts and better availability of good mechanics to work on them down the road. I also bought a Hyundai, because if you leave brand status out of the picture, it simply made the most sense. Cars in general are really good today.

I'd largely agree.

I'm strongly of the opinion that the success of Toyota in the US in recent decades is not so much a factor of build quality as it was a factor of dealership economics.

Toyota build a dealership network where dealer profitability was a core driver.

Chevy on the other hand, while offering a good product mix, had WAY too many dealers(poor management and franchise laws et al prevented them from easily sacking their poor performing dealers).

Toyota dealers were competing against Chevy dealers.

Chevy dealers were competing against other Chevy dealers creating a highly cannibalistic environment.

The average Toyota dealer was selling 3-4X + units compared to the average Chevy dealer.....so Toyota was able to develop quite profitable and dominant dealers, while Chevy dealers fell into a descending spiral.

One only had to look at the relative "retail experience" between the two to see the difference between the perception(and reality) of success and failure.

[don]

Re: Buy, Finance or Lease - the Car Conundrum

My wife and I have His 'n Her 4x4 pickups. Mine's a Ford, her's a GMC. Both have more than 200k miles on them and I expect to get at least another 60k-100k out of each of them. The Ford is proving a bit more durable than the GMC, which is suffering from minor things like a couple of burnt out dash lights and a plastic bumper cover that cracked in the cold of a Canadian winter.

I like the same things as you about the much maligned American pick-up. They are overbuilt and thus incredibly reliable (I have had 2 previous Fords), easy to work on, cheap to fix, and they go pretty well anywhere, any time. The extra they cost in fuel you more than make up in cheaper parts and maintenance if you keep them a long time imo. We had high winds and blowing snow all day yesterday, with some pretty big drifts in the driveway of the bunker this morning. I haven't ploughed it yet, but my wife put her truck in 4WD and headed out to check her horses and then to town to run errands this morning. Try that in your hybrid jelly-bean.

I was an electrical contractor for over 20 years and owned nothing but trucks, including what the Big Boss drove. (Put a woman in a truck and you'll never get her out). Had great luck with Ford's 3/4 and 1 ton deisel line. Sold them when they neared 200,000 and saw them around town over the years. Now I'm no longer a contractor, live in South Florida, and can drive cars. Both worked based on need.

Never owned a Toyota truck but admire their ad campaign:

it does make a point

[lakedaemonian]

Re: Buy, Finance or Lease - the Car Conundrum

My wife and I have His 'n Her 4x4 pickups. Mine's a Ford, her's a GMC. Both have more than 200k miles on them and I expect to get at least another 60k-100k out of each of them. The Ford is proving a bit more durable than the GMC, which is suffering from minor things like a couple of burnt out dash lights and a plastic bumper cover that cracked in the cold of a Canadian winter.

I like the same things as you about the much maligned American pick-up. They are overbuilt and thus incredibly reliable (I have had 2 previous Fords), easy to work on, cheap to fix, and they go pretty well anywhere, any time. The extra they cost in fuel you more than make up in cheaper parts and maintenance if you keep them a long time imo. We had high winds and blowing snow all day yesterday, with some pretty big drifts in the driveway of the bunker this morning. I haven't ploughed it yet, but my wife put her truck in 4WD and headed out to check her horses and then to town to run errands this morning. Try that in your hybrid jelly-bean.

Thomas Stanley, the author of "Millionaire Mind", "Millionaire Next Door", etc wrote about the wealthy and the differences between folks on high incomes and folks who are generating wealth.

One area he touched on was cars.

Ford(as well as other brands) pick ups were a stand out vehicle owned by his definition of wealthy....often purchased late model used.

My current vehicle is a late model Mitsubishi dual cab Triton ute. 4 Cylinder turbo diesel that probably gets 3 times the fuel economy of the average US pick up, and can do 90% of the same things(smaller bed).

I really worried about buying it new, as I've always bought used(bar 1 new vehicle a decade and a half ago).

At the time Mitsubishi's sales had crashed something in the order of 75%(seriously). And that's AFTER dealers were encouraged to register them in their own name(which accounted for much of the remaining "sales"). Dealer capital and floor plan is ultimately limited and I was able to drive away with a new vehicle with extended warranty for just short of 50% discount from new, they were THAT desperate.

For the western world, the greatest profit centre in automotive dealerships for the last 10-20 years has been after sales....which is service followed by parts.

Used vehicle sales is a decent profit centre....most money is made in BUYING cars at the right price.....often distressed sales.

As of course the F & I can be.

New vehicle sales is almost an afterthought anymore for many brands......Often run nearly profit neutral to support customer traffic for where the REAL money is......

My new ute replaced a Mitsi ute that was 15+ years old and had over 400K on the clock.

I'm waiting to see the US/Canada start shifting to Ford Ranger mid-sized utes with small turbo diesels...assuming North American diesel refining capacity and bang for buck.

At the moment, I'm not even sure if the flash new Ford Ranger for international markets is even available for North America.

[lakedaemonian]

Re: Buy, Finance or Lease - the Car Conundrum

I was an electrical contractor for over 20 years and owned nothing but trucks, including what the Big Boss drove. (Put a woman in a truck and you'll never get her out). Had great luck with Ford's 3/4 and 1 ton deisel line. Sold them when they neared 200,000 and saw them around town over the years. Now I'm no longer a contractor, live in South Florida, and can drive cars. Both worked based on need.

Never owned a Toyota truck but admire their ad campaign:

it does make a point

That one's in Libya.

But it's the same in Afghanistan as well......Toyota utes are HUGELY popular for both "good guys" and "bad guys".

Nissan is doing some decent business as well, at least to government forces.

IN the early/mid 80's there was a series of engagements between's Qaddafi's military incursion into Chad, with Chadian forces operating mostly out of Toyota utes.........and it's become known as the "Toyota War".

Which I guess now in retrospect, you could call it the "First Toyota War"......much like the First World War wasn't called that until a couple decades later.

And when there's serious money to be made, it's Landcruisers, Lexus Landcruisers, and Range Rovers in the 3rd world.

My last layover in Kabul coming out of theatre got me a lift to the airport in a new Lexus Landcruiser.....even with over a ton of armor/kevlar/bullet resistant glass that thing could fly for such a big, heavy wagon.

And there's probably more high end late model Range Rovers in Phnom Penh than in NYC(anecdotally).

Watching vehicle traffic anywhere in the world can offer some real insight.

[Polish_Silver]

Re: Cash for cars

Dividend stocks, which have been bid into the stratosphere in this world of ZIRP, are going to get creamed the same time the bond market turns...

OK. Then gold coins or oil futures.

[lektrode]

Re: Cash for cars

Dividend stocks, which have been bid into the stratosphere in this world of ZIRP, are going to get creamed the same time the bond market turns...

what you think about this one, grg? (sporting a 7-8% yield currently) - in 'general terms'...

or how far down do you think it might go on such a scenario.... (looking for another oppty to get some more at better price than 1st of year)

[lektrode]

Re: Buy, Finance or Lease - the Car Conundrum

Thomas Stanley, the author of "Millionaire Mind", "Millionaire Next Door", etc wrote about the wealthy and the differences between folks on high incomes and folks who are generating wealth.

One area he touched on was cars.

Ford(as well as other brands) pick ups were a stand out vehicle owned by his definition of wealthy....often purchased late model used.

...

one of my anecdotal car stories (being a chevy driver, a 20yo unit that i paid 1400bux for, in 2004, that still looks ok, runs even better and does 30mpg like clockwork) - being an old new england yankee mesself - was always impressed by what i noticed about some of my old windsurfing haunts - out on marblehead neck, just for instance vs say over on the left coast - like maybe in the manhattan/redondo beach area (at least back in the early 80's in MA, vs late 80's in CA):

out on 'the neck' as its referred to by residents of the area - where there's plenty of 'old money' real estate - one used to see 10-15yo buicks in the driveways or maybe a similar vintage caddy - vs out in CA, it seemed to be mostly mercedes and up...

[lakedaemonian]

Re: Buy, Finance or Lease - the Car Conundrum

one of my anecdotal car stories (being a chevy driver, a 20yo unit that i paid 1400bux for, in 2004, that still looks ok, runs even better and does 30mpg like clockwork) - being an old new england yankee mesself - was always impressed by what i noticed about some of my old windsurfing haunts - out on marblehead neck, just for instance vs say over on the left coast - like maybe in the manhattan/redondo beach area (at least back in the early 80's in MA, vs late 80's in CA):

out on 'the neck' as its referred to by residents of the area - where there's plenty of 'old money' real estate - one used to see 10-15yo buicks in the driveways or maybe a similar vintage caddy - vs out in CA, it seemed to be mostly mercedes and up...

I noticed that throughout a bit of the Northeast when I was growing up in the Northeast.

The new, upwardly mobile money had the new Mercedes and/or BMW.

The multi-generational money had well used Volvo wagons.

[lakedaemonian]

Re: Buy, Finance or Lease - the Car Conundrum

This just popped up.....looks interesting:

http://www.stuff.co.nz/motoring/show...-of-the-future

3 wheeled, enclosed motorbike/scooter

[don]

Re: Cash for cars

Be careful Lek.

[lektrode]

Re: Cash for cars

Be careful Lek.

after watching ZIRP's effects over the past few years, mr don and heeding all too well the adage of 'return OF principal vs return ON it' since 2008-09 - have reached about the end of the line on waiting for the moment to buy something with my rapidly evaporating savings - tween biz revenue plummeting, expenses launching - and THEN there's the 'affordable healthcare act' - dunno what else to do, sides watch/wait on the sidelines - but thats making me even more nervous lately...

am also quite certain thats _exactly_ their 'plan' (the bernank&co and his puppetmasters in lwr manhattan)

but altho i'm waiting for another of Mr J's "whites of their eyes" trades, mine are gittin redder by the week....

[GRG55]

Re: Cash for cars

after watching ZIRP's effects over the past few years, mr don and heeding all too well the adage of 'return OF principal vs return ON it' since 2008-09 - have reached about the end of the line on waiting for the moment to buy something with my rapidly evaporating savings - tween biz revenue plummeting, expenses launching - and THEN there's the 'affordable healthcare act' - dunno what else to do, sides watch/wait on the sidelines - but thats making me even more nervous lately...

am also quite certain thats _exactly_ their 'plan' (the bernank&co and his puppetmasters in lwr manhattan)

but altho i'm waiting for another of Mr J's "whites of their eyes" trades, mine are gittin redder by the week....

lek: Patience. :-) We are all in the same swamp! I agree with don...

[Polish_Silver]

husbands are irrelevant?

[QUOTE=GRG55;252175]As corny as this is going to sound, and "right" or "wrong" here's what this starving student did:

1. Acknowledge the husband but be attentive to the wife (apparently 98% of family car buying decisions are made by the wife - I think the remaining 2% is a measurement error);[quote]

(1) is certainly the case in my house, which is why we have an SUV instead of a station wagon.

But given (1), would the outcome be different if the husband did not appear at all?

Would the sales strategy need to be altered?

[lakedaemonian]

Re: husbands are irrelevant?

One of the most interesting things I've learned about the automotive industry that I neglected to mention in my last posts is the dealership customer retention metrics.

The data set I saw was from Mercedes Ben Australia.

If the MB dealer sold a car(new or used) the customer retention(meaning lock them into dealer service AND sell them another car) was roughly 25% IIRC.

If the MB dealer sold a car with branded finance the customer retention was approaching 50% IIRC.

If the MB dealer sold a car with branded finance and branded insurance customer retention was approaching 60% IIRC.

If the MB dealer sold a car with branded finance, branded insurance, and loyalty program(effectively service contract) customer retention was 73% <----that's the exact number.