OT: Buy out the lease, lease again, buy CPO?

[Nooch]

All things being equal, I've been kicking around the idea of buying out the lease on our odyssey. The new ones, while great, lack some of the creature comforts we have in our current one until you get to the upper echelon. I'd imagine leasing a new one is going to be a bit more expensive than our current payment.

Buying ours out, 72 months at 3.69% gives us a payment that's dollars off from our current payment, but we'll actually own it. I have no qualms paying for the car that long, as I'd be doing the same leasing the next (and the next after that), the honda will run forever so long as we keep taking care of it.

Buying a CPO'd, I'd have to figure the only benefit to that is the extended warranty, but most of them are coming in more expensive than what I'd be looking at to buy mine with the same features, and I'd not know the history of it.

So all things being equal, and understanding I'm *never* buying the car outright with cash -- how would you proceed?

[djg21]

All things being equal, I've been kicking around the idea of buying out the lease on our odyssey. The new ones, while great, lack some of the creature comforts we have in our current one until you get to the upper echelon. I'd imagine leasing a new one is going to be a bit more expensive than our current payment.

Buying ours out, 72 months at 3.69% gives us a payment that's dollars off from our current payment, but we'll actually own it. I have no qualms paying for the car that long, as I'd be doing the same leasing the next (and the next after that), the honda will run forever so long as we keep taking care of it.

Buying a CPO'd, I'd have to figure the only benefit to that is the extended warranty, but most of them are coming in more expensive than what I'd be looking at to buy mine with the same features, and I'd not know the history of it.

So all things being equal, and understanding I'm *never* buying the car outright with cash -- how would you proceed?


Talk to your dealer. I bought an Audi we had leased at the end of the lease, and was able to buy CPO coverage for just under $1,000. I bought the CPO because my original new car warranty would be expiring shortly, I knew the car would need wheel bearings at some point soon, and those would be covered under the warranty if I went CPO and the original warranty was expired. I financed a good chunk of the car’s cost, and the monthly payments were less than the monthly lease payments.

[Nooch]

Talk to your dealer. I bought an Audi we had leased at the end of the lease, and was able to buy CPO coverage for just under $1,000. I bought the CPO because my original new car warranty would be expiring shortly, I knew the car would need wheel bearings at some point soon, and those would be covered under the warranty if I went CPO and the original warranty was expired. I financed a good chunk of the car’s cost, and the monthly payments were less than the monthly lease payments.

Did you finance thru audi or a third party?

[MattTuck]

3.69% feels high to me. But I haven't looked at used car rates recently. If the rate is that high, I'd try to finance for a shorter term -- just to save money on interest.

[djg21]

Did you finance thru audi or a third party?

Audi Financial Services. It was a pretty straightforward and smooth transaction. CPO is essentially insurance you purchase from the manufacturer/finance company. It is worth it for an Audi because repairs can be expensive, I’ve never driven a Honda, so you know better that me.

[ltwtsculler91]

Get one of these, and just stick the girls in your spiffy new roof basket :banana::banana::banana:

http://www.cleanmpg.com/photos/data/2/2015_VW_Golf_SportWagen_for_Cycling.jpg

But in the big picture CPO is nice (depending on brand and what the offer) because it guarantees you'll get the car with good tires/brakes etc and be covered in case of any big repairs for the duration of the warranty which is hopefully most of the loan..

[fa63]

3.69% feels high to me. But I haven't looked at used car rates recently. If the rate is that high, I'd try to finance for a shorter term -- just to save money on interest.

That does seem a bit high; we are paying just over 2% on my wife's car loan (though it is only a 36-month loan).

[Hank Scorpio]

3.69 is high. I just bought a crv for the wife this past weekend at 2.9. Are you a USAA member? Try them or penfed.

[Nooch]

3.69 is high. I just bought a crv for the wife this past weekend at 2.9. Are you a USAA member? Try them or penfed.

I should mention, that's just a quick quote I got from Chase when looking at auto loans. The 72 months is a little higher, but the 60 month puts the payment somewhere out of my comfort zone.

[Mikej]

I should mention, that's just a quick quote I got from Chase when looking at auto loans. The 72 months is a little higher, but the 60 month puts the payment somewhere out of my comfort zone.

Try your luck at new, you may get a much better, like .9% and a really good deal that will outlast your current vehicle.

[Nooch]

Try your luck at new, you may get a much better, like .9% and a really good deal that will outlast your current vehicle.

Unfortunately I can't even consider a new finance. We wouldn't have the down payment to get the payment into an appropriate level, which is why we've leased the last two vans. To get into a comparably equipped new odyssey, we're looking at $39460 base.

Unless of course they offer the SE trim down the line that includes the media package at a cheaper price. But until the kids are able to do 24 hour road trips to disney without a dvd player, we're kind of stuck keeping that feature.

[FlashUNC]

If you're coming up on the end of a three year lease term, taking a 72 month note is madness. Taking 9 years to pay for the car is ridiculous.

[ltwtsculler91]

Unfortunately I can't even consider a new finance. We wouldn't have the down payment to get the payment into an appropriate level, which is why we've leased the last two vans. To get into a comparably equipped new odyssey, we're looking at $39460 base.

Unless of course they offer the SE trim down the line that includes the media package at a cheaper price. But until the kids are able to do 24 hour road trips to disney without a dvd player, we're kind of stuck keeping that feature.

Or grab a new one sans DVD player built in and just get them the little kids Kindle or a portable DVD player each. That would run you ~$300 rather than a ton on the car

[Nooch]

If you're coming up on the end of a three year lease term, taking a 72 month note is madness. Taking 9 years to pay for the car is ridiculous.

we're about 19 months into a 36 month term. But I've just been thinking/considering what the options are.

[zap]

So all things being equal, and understanding I'm *never* buying the car outright with cash -- how would you proceed?

I would make do with a lower cost new(er) vehicle financed conservatively for 4 years max and hold for 6+ more years after last payment.

[christian]

Unless of course they offer the SE trim down the line that includes the media package at a cheaper price. But until the kids are able to do 24 hour road trips to disney without a dvd player, we're kind of stuck keeping that feature.

No, you're not. Two $49 Amazon tablets keep my nuggets entertained for hours. Well, the older one, bless his heart, mostly wants to listen to NPR and talk to the grown ups...

[Ttx1]

+1 for PenFed.
+1 for avoiding any nav/infotainment upgrades. "bring your own"
+1 for avoiding perpetual payments.
+1 for very low Honda TCO, when purchased/financed effectively.

Honda manages their leases well, and your buyout is probably less than market value (unless your dealer hosed you on the way in). Consider buying it out if you can finance for now more than 48 months, 60 max. Keep in mind that you effective pay tax twice when you buy out a lease, so worth considering all your options.

Happy shopping.

[Ken Robb]

we're about 19 months into a 36 month term. But I've just been thinking/considering what the options are.

Why not let your current deal run its course? Who knows what new technology will be available or what fuel prices may be in 2 years?

I think comparing the monthly cost you will be paying on a car that may be 8-9 years old with the monthly cost of a car that is new or 3 years old may be misleading. Even if there is no major problem you will still be driving an old car with all the normal wear/tear of a well-used family vehicle. Having said that I confess/brag that I'm driving a 2007 MINI Cooper S but it only has 57,000 miles on it.

[simonov]

+1 for PenFed.
+1 for avoiding any nav/infotainment upgrades. "bring your own"
+1 for avoiding perpetual payments.
+1 for very low Honda TCO, when purchased/financed effectively.

Honda manages their leases well, and your buyout is probably less than market value (unless your dealer hosed you on the way in). Consider buying it out if you can finance for now more than 48 months, 60 max. Keep in mind that you effective pay tax twice when you buy out a lease, so worth considering all your options.

Happy shopping.

Make sure to double check the bolded part. If your residual/buyout is more than the KBB market value by any appreciable amount, you'd be overpaying for your own car.

[binxnyrwarrsoul]

Around 2% is decent depending on your credit score, but I'd suggest looking into a credit union. I just financed an '18, put 20% down, have very good credit and my rate on a 4 yr loan is 1.75% with direct deposit and weekly auto-pay with my credit union.

[paredown]

just a data point--when we purchased our CPO Acura last Christmas, we were fully prepared to finance--had the note ready with an online loan source. The Sales manager said he might be able to do better--sure enough, Honda finance came through with a lower rate. Surprised us!

I have to say though--you need proof in hand of the best you can do, and just ask if they can do better. I'm sure if you came in ripe for the plucking, you'd be paying over market with the in-house rate

[Birddog]

If you're coming up on the end of a three year lease term, taking a 72 month note is madness. Taking 9 years to pay for the car is ridiculous.
A wise man told me when I was young that if you couldn't pay off a car loan in 36 mos, then you couldn't afford the car. He was right!

[SPOKE]

A wise man told me when I was young that if you couldn't pay off a car loan in 36 mos, then you couldn't afford the car. He was right!

Truth!!! Depreciating asset.

[Nooch]

While I don't disagree, three kids make the van a necessity, as did two kids and travelling with family. While i'm sure it was easier to get by before you needed to have a kid in a booster/carseat until they were 21, my outback hardly accommodates three across the back with the array of kid seats.

My goal was to get out of the lease cycle. Cars last forever assuming they're well taken care of these days, so going back to my original options, it would seem negotiating with honda toward the end of the lease term might work better than a private loan.

[staggerwing]

No, you're not. Two $49 Amazon tablets keep my nuggets entertained for hours. Well, the older one, bless his heart, mostly wants to listen to NPR and talk to the grown ups...

Agreed. I survived a childhood taking trips in vehicles with no entertainment options, and took our kids on many a trip in a base model, 2000 Sienna CE with no screens. They survived too.

FWIW, on long trips, we picked up Harry Potter audio CDs from the local library. Zero cost, and held everyone in quiet rapture for hours on end. Of course, as noted, today each kid can have their very own tablet for far less than a car payment.

[benb]

How often are you going to Disney? With a family that size trips each year sound like they cost a sizable % of the cost of the minivan itself. Skip a trip and knock a year off the car loan. This is shades of the single guy who needs the $50k pickup and justifies it with the one day a year he moves something, but it's too much inconvenience to save $30k and drive a car and then rent a truck once a year for a couple hundred dollars.

Those Honda minivans are really nice but having looked at them seriously they are awfully expensive... and they're still just minivans. If you can save $10k+ with a dodge/Hyundai/Kia you should look at it. At least when I looked 5 years ago the used Hondas were stratospherically expensive too and not in great shape since minivan families tend to abuse cars so badly even the car detailing guys can't repair the damage without replacing upholstery and carpets. Speaking from experience the iPad also works just fine without having to buy TVs built into the car. My sister has an Odyssey with the TVs + DVD players and they sit unused and the kids play on iPads on long trips.

2-3 years + lease payments + 6 years of loan payments on top of that just sounds insane from a financial perspective. You say the Outback is too small. But if you can get 0.9% on an Outback (I did) you can practically buy 2 of them new for what you'll pay for your Odyssey.

My Acura was the only car I've ever had a loan with higher than 0.9% interest on. Honda/Acura loans are tough. When I bought the Acura a week later the Audi dealer I'd looked at called me back and offered me 0.9%. If they'd called before I bought the Acura I 100% would have bought the Audi, even if it was a basket case long term compared to an Acura it would have paid off. I'm not sure why (high resale?) but you really don't want to finance Hondas/Acuras through their banks. Their motorcycles similarly have/had high financing rates compared to other brands.

[Nooch]

I get it, and appreciate the comments. We go to disney at least once every other year. For our wedding, my father bought us into the Disney Vacation Club -- their timeshare -- and pays the dues annually. The trip in and of itself doesn't cost the arm and leg it might appear to. Traditionally we've gone annually, but this year, with the new baby arriving, we'll be putting off and banking our points to get a larger place next year (and probably having my parents come with).

I already own the outback -- it's not terribly large when you consider what we have volume wise with the van.

But no, this isn't a once in a while we need more room. I have (will have) 3 under 6, and we always have others in the car say, when we're travelling for holidays to Long Island, etc.. The van is a necessity -- is this one? perhaps not, but I figured keeping the one I was already into made more sense than shopping for another.

While I do appreciate all the input -- genuinely -- how do we steer far enough off that I feel like I'm constantly defending *why* I'm buying a van..? Let's focus on the original question, not the 'buy a different, cheaper, smaller car' kinda thing.

[benb]

It's more just $40k Odyssey with a lot of extra money paid on interest over 8-9 years versus:

$29k Odyssey base model
$26-27k for a Dodge or Kia minivan
Even less for something used.

Even if you need the TVs other manufacturers don't play the options game quite the same way as Honda. Even if they're going to rip you off to the tune $3000 for $300 worth of LCDs + a DVD player they will perhaps let you get that $3000 entertainment package as a single-line add on instead of making you buy up to the top of the line trim package which adds $10000 worth of other stuff.

Odysseys are just expensive! I looked at buying one 5 years ago and because so many people seem to buy the top of the line ones even the used ones I was looking at cost more than the brand new Kias and Dodges.

I do get it that the Honda and Toyota are way nicer though having rented all of them on trips.

[echelon_john]

3 words:

Ford. Transit. Connect.

Men will want to be you. Women will want to be with you. Honda who? Oh, just somebody that I used to know.


It's more just $40k Odyssey with a lot of extra money paid on interest over 8-9 years versus:

$29k Odyssey base model
$26-27k for a Dodge or Kia minivan
Even less for something used.

Even if you need the TVs other manufacturers don't play the options game quite the same way as Honda. Even if they're going to rip you off to the tune $3000 for $300 worth of LCDs + a DVD player they will perhaps let you get that $3000 entertainment package as a single-line add on instead of making you buy up to the top of the line trim package which adds $10000 worth of other stuff.

Odysseys are just expensive! I looked at buying one 5 years ago and because so many people seem to buy the top of the line ones even the used ones I was looking at cost more than the brand new Kias and Dodges.

I do get it that the Honda and Toyota are way nicer though having rented all of them on trips.

[benb]

Damn those Transit Connect vans look like a lot for the money.

Not what I expect out of Ford, they seem to have gotten really expensive the last 10 years.

[echelon_john]

And Nooch, just to stay on topic: the Odyssey is a really nice car, but commands a premium price, both new and used. The Transit Connect ain't the car that the Odyssey is, but it's super practical, surprisingly nice, and much more affordable.

You're entering prime mess/spill kid years, with sports, friends coming along, etc. That doesn't mix super well with an already depreciating asset. If you can stomach having a little less car, you can save a lot of money and still have the reliability, amenities & capacity you need.

[Clean39T]

3 words:



Ford. Transit. Connect.



Men will want to be you. Women will want to be with you. Honda who? Oh, just somebody that I used to know.


Looking at buying one of these as my main car, and I got no kids - just want the space in the back for bikes and stealth camping - and the safety comfort features..

[AngryScientist]

How many miles will the van have on it when you finance it?

[Nooch]

How many miles will the van have on it when you finance it?

If I convert it early (now-ish), 22-23k. In a year when the lease term expires, around 35-38k.

[carpediemracing]

Thought on lease. If you got a really good deal on the lease that usually means low payments. One way to achieve this is to have a very high residual value. That would reduce the depreciation that you're paying for and reduce your monthly payments. However, the flip side is that if you were to buy out the vehicle you'll be paying that very same high residual, i.e. you'll be paying way over book.

One thing that I've seen happen is the dealer takes back a vehicle on behalf of the lease company (lease return), somehow finagles to buy it at a lower price from the same lease company, then sells it to the original leasee. I saw this once, it was a massive price difference ($9k on a $40k residual; customer got it for about $31k), but I have no idea how it worked. I just know the vehicle sat in the corner of the lot for a month or so before the "customer" (aka the original leasee) picked it up.

[buddybikes]

72 month loans, may as well just call it a mortgage.

Young people out there don't do it...get less pistons to drive your butt around.

[acorn_user]

I think knowing the car's history is worth quite a bit, at least if you plan on keeping the van long-term. I'd also add that the new Odyssey's are both expensive and very ugly (subjective, of course) compared to the one you have. We bought a 2005 4 years ago, and it has held up ok to long trips etc. We have had to do some substantial maintenance; we usually have one year with nothing, and then it seems like we get a $2000 bill the next (first it was ac, now it is axles and suspension). They are big and heavy and stuff does wear out.

[Ken Robb]

Thought on lease. If you got a really good deal on the lease that usually means low payments. One way to achieve this is to have a very high residual value. That would reduce the depreciation that you're paying for and reduce your monthly payments. However, the flip side is that if you were to buy out the vehicle you'll be paying that very same high residual, i.e. you'll be paying way over book.

One thing that I've seen happen is the dealer takes back a vehicle on behalf of the lease company (lease return), somehow finagles to buy it at a lower price from the same lease company, then sells it to the original leasee. I saw this once, it was a massive price difference ($9k on a $40k residual; customer got it for about $31k), but I have no idea how it worked. I just know the vehicle sat in the corner of the lot for a month or so before the "customer" (aka the original leasee) picked it up.
I have limited experience with this but: lease companies want to get at least the residual value to sell to the original lessee when the lease is up. This may be a price much higher than the car is worth. If the lessee doesn't buy it the lessor puts it through an auction where it is sold to a dealer for the actual market value as determined by supply/demand. It's not unusual for a local dealer to be able to buy at auction, mark up, sell for less than the unrealistic residual.

[bigman]

My friend had a loaded to gills odyssey, he got a top of the line new one which is not as loaded. he said everything about the new vehicle is better, particularly the seats and the handling.

[oldpotatoe]

All things being equal, I've been kicking around the idea of buying out the lease on our odyssey. The new ones, while great, lack some of the creature comforts we have in our current one until you get to the upper echelon. I'd imagine leasing a new one is going to be a bit more expensive than our current payment.

Buying ours out, 72 months at 3.69% gives us a payment that's dollars off from our current payment, but we'll actually own it. I have no qualms paying for the car that long, as I'd be doing the same leasing the next (and the next after that), the honda will run forever so long as we keep taking care of it.

Buying a CPO'd, I'd have to figure the only benefit to that is the extended warranty, but most of them are coming in more expensive than what I'd be looking at to buy mine with the same features, and I'd not know the history of it.

So all things being equal, and understanding I'm *never* buying the car outright with cash -- how would you proceed?

My son did this..leased a really nice Civic...drives way more than the minimum, when lease over, bought it..still less than a lot of 3 year old Civics(they hold their value really well)..plus he knows the history of the car..they are going to do the same with a Pilot..

[rwsaunders]

As you stated, there aren't many better choices for a vehicle than a van when you're hauling two adults, three kids and their associated gear. I've owned two Odysseys over the past 18 years with a combined mileage of about 270,000 and I'm probably another 60,000 miles from retiring the second one.

I don't know how old your kids are, but if you're in it for the long haul, just buy a new unit or a certified unit when your lease is up and drive it until it's toast. The EX-L is about as good as it gets...leather, sunroof, auto climate control and all of the technology goodies and the road mileage is 25-27mpg as you know. I couldn't justify the Touring version, as I use snow tires in the Winter and the run flat tires limited my options. Our second unit also survived a major T-bone where my wife walked away untouched, so it's no slouch when to comes to safety.

I installed a rear hitch for a bike rack and we use a Yakima RocketBox mounted to the roof rails when on vacation and when hauling kids to and from college. Our last one is off to school in the Fall and there's a space saved on the rear window for his college decal...it's quite crammed at the moment.

Btw...as your kids get older, you won't need a video system...they'll plug in their phones and perhaps as Christian indicated, they'll even talk with you. Good luck!

[HenryA]

This is a math problem. Run all the possible transactions out on paper to see what each one actually costs. Then add in your wants to pick the right course.

[Nooch]

As you stated, there aren't many better choices for a vehicle than a van when you're hauling two adults, three kids and their associated gear. I've owned two Odysseys over the past 18 years with a combined mileage of about 270,000 and I'm probably another 60,000 miles from retiring the second one.

I don't know how old your kids are, but if you're in it for the long haul, just buy a new unit or a certified unit when your lease is up and drive it until it's toast. The EX-L is about as good as it gets...leather, sunroof, auto climate control and all of the technology goodies and the road mileage is 25-27mpg as you know. I couldn't justify the Touring version, as I use snow tires in the Winter and the run flat tires limited my options. Our second unit also survived a major T-bone where my wife walked away untouched, so it's no slouch when to comes to safety.

I installed a rear hitch for a bike rack and we use a Yakima RocketBox mounted to the roof rails when on vacation and when hauling kids to and from college. Our last one is off to school in the Fall and there's a space saved on the rear window for his college decal...it's quite crammed at the moment.

Btw...as your kids get older, you won't need a video system...they'll plug in their phones and perhaps as Christian indicated, they'll even talk with you. Good luck!

Thanks RW. My kids are 5.5, 3.75, and T-minus 34 days and counting until arrival. Our current is an SE, which was an EX with a vacuum and DVD player. Being that we've got it, and given that we know it's history, and as spec'd it suits our needs nicely, I've got no problem keeping this one for the long haul rather than trying to find another.

I just wanted to make sure I wasn't missing anything as far as the pro's and con's of taking the payments over on this one as a financed purchase (now) versus the other options, including a buyout at the end.. What's the real difference if I take out a 6 year loan now (i know, i know, but it keeps the payment where i need it to be and if I'm not buying this one, I'm going thru two more lease terms in those six years and losing just as much on initial costs as I would be on interest) it's the same as taking a 5 year loan when the lease term expires..

Only thing I regret is we don't have the roof rails on this one. more storage up top might not be the worst thing (I've already thrown the hitch on)

[carpediemracing]

Caution on the loan bit, especially with the longer terms. If you end up with a vehicle that's worth less than the loan and something happens to the vehicle you end up eating the difference.

With leases it's also the same. It's not your vehicle so if the vehicle gets totaled you don't get any money. You start at zero. This is why it's typically better to put as little down as possible; it's less risky in terms of cash exposure. If you do a zero down and maybe pay one month lease total as a down payment then you're out just one month payments if the vehicle gets totaled. If you do something like, say, prepay the entire lease up front, and the vehicle gets totaled one month in, you lose the entire down/pre-payment.

On a loan it's not the same. There's no penalty for prepaying a bit, as long as you have the money and it's not earning money otherwise. If you increase downpayment then you'll decrease exposure in case of some unforeseen incident.

[carpediemracing]

I have limited experience with this but: lease companies want to get at least the residual value to sell to the original lessee when the lease is up. This may be a price much higher than the car is worth. If the lessee doesn't buy it the lessor puts it through an auction where it is sold to a dealer for the actual market value as determined by supply/demand. It's not unusual for a local dealer to be able to buy at auction, mark up, sell for less than the unrealistic residual.

I understand that part.

But in the situation I experienced the leasing company never took the vehicle away (and the huge auction place is just 10 minutes away). Instead they left it at the dealership, never gave another dealer/buyer to outbid that particular dealer, then sold it to the dealer for a huge amount below residual. It didn't seem in the leasing company's best interest so I figure there must have been some negotiations outside my view.

[FL_MarkD]

72 month loans, may as well just call it a mortgage.

Young people out there don't do it...get less pistons to drive your butt around.

This is dead on. If you are financing a used vehicle for six years, you are spending too much on your transportation. You can't borrow your way to prosperity.

[p nut]

My son did this..leased a really nice Civic...drives way more than the minimum, when lease over, bought it..still less than a lot of 3 year old Civics(they hold their value really well)..plus he knows the history of the car..they are going to do the same with a Pilot..

100% agreed. You know the history of this van. CPO or not, I would never give up a car I owned since new for a used unit. Doesn’t make sense to me. Odyssey’s are nice. We almost bought one but no AWD, so went Sienna. I would much rather drive the Ody than any other van.

You are running about 12k/yr. About 100k by the time you pay the loan off. Considering the van Should last 200k+, you should be good for many years to come. Avoid Chase, by the way. Go to a local credit union or have your dealership negotiate with local banks.

[Ralph]

There are exceptions....but sometimes I think folks assume used is cheaper than new when that is not always the case.

If I'm looking at a used vehicle (on a lot or one I've leased), and it's got "say" 50,000 miles on it......it's about 1/3 used up. So I know I'm really only buying about 2/3 of a vehicle. And this 2/3 of a vehicle is close to needing some normal maintenance and repair work. Tires, trans service, struts, shocks, alignment, coolant, potentially AC repair....and on and on and on. So I would not want to pay more than 40-50% of new cost for 2/3 of a vehicle.

BTW.....right now....in the auto biz,......sport utes and similar are very hi priced....even mfg to dealer. Sedans....they are giving away. Especially large ones. Rent a mini van for that vacation.

[Ken Robb]

There are exceptions....but sometimes I think folks assume used is cheaper than new when that is not always the case.

If I'm looking at a used vehicle (on a lot or one I've leased), and it's got "say" 50,000 miles on it......it's about 1/3 used up. So I know I'm really only buying about 2/3 of a vehicle. And this 2/3 of a vehicle is close to needing some normal maintenance and repair work. Tires, trans service, struts, shocks, alignment, coolant, potentially AC repair....and on and on and on. So I would not want to pay more than 40-50% of new cost for 2/3 of a vehicle.

BTW.....right now....in the auto biz,......sport utes and similar are very hi priced....even mfg to dealer. Sedans....they are giving away. Especially large ones. Rent a mini van for that vacation.

Ralph and I must have gone to the same schools. We so often think alike. Of course, being old coots with years of experience probably has a lot to do with this too.

[Ralph]

LOL Probably does. Personally.....I remember when my kids were small.....and how wife and I traveled on long trips with 3 kids. Took the small mattresses off their crib beds, folded rear seats down, made beds for them, stuffed soft luggage around corners, and hit the road. Parents can't do that now....it seems. I know....laws and such.

One thing I did learn from my long career at Merrill Lynch. The number one thing that kept most folks from achieving wealth.....was their car buying habits. That $40,000 vehicle not making a 10% investment return is over a $600,000 vehicle in 35 years. Then if you have bought several of them over a working life time.....well you add up what it would be doubling every 7-8 years.

Now...as an old guy.....I know we all have to have vehicles ( I have 3 older ones) ....you just have to....I get it. But they have got so expensive...and all out of whack to their transportation value.....that I think we have to rethink how we spend our transportation dollars. Live near train stations, Uber or something. If I were a young man, early in my career, and thinking like I do now.....I would only drive the cheapest simplest vehicles for going to work, around town, shopping and such. Mazda 3's. Honda HRV's and Fit's, etc. Then for that once a year long trip....would rent what I needed. And I was a relatively hi paid person, and would sill do that. I would get a kick parking my Fit next to the BMW's, jags, and Range Rovers of the other guys in the office.

[binxnyrwarrsoul]

3 words:

Ford. Transit. Connect.

Men will want to be you. Women will want to be with you. Honda who? Oh, just somebody that I used to know.

I have been very intrigued by this vehicle. What keeps me away is one word, Ford. Any experience with the Transit Connect's reliability?

[Ralph]

Why would it not be great? Reliable eng and trans....used in many of their other vehicles.

[ripvanrando]

There are exceptions....but sometimes I think folks assume used is cheaper than new when that is not always the case.

If I'm looking at a used vehicle (on a lot or one I've leased), and it's got "say" 50,000 miles on it......it's about 1/3 used up. So I know I'm really only buying about 2/3 of a vehicle. And this 2/3 of a vehicle is close to needing some normal maintenance and repair work. Tires, trans service, struts, shocks, alignment, coolant, potentially AC repair....and on and on and on. So I would not want to pay more than 40-50% of new cost for 2/3 of a vehicle.

BTW.....right now....in the auto biz,......sport utes and similar are very hi priced....even mfg to dealer. Sedans....they are giving away. Especially large ones. Rent a mini van for that vacation.

A bigger assumption is assuming 150,000 miles is used up or that a used car will need trans, ac, struts, etc.

I have been buying used cars for 30+ years with next to no repairs. Many of them have gone to 300,000 miles (usually after I give them to family members).

Example 1: 2006 S500 4matic bought in 2011 for $13,000. It now has 200,000 and I just replaced the original rear rotors. It has the original battery, alternator, trans, etc. One common failure related to the trans control cost me $700.

Example 2: 2000 E320 4matic wagon bought in 2003 under warranty for $23,000. It went over 300,000 before the tranny went. No other failures. Original exhaust, etc.

Example 3: 1986 E300 for $16,000 drove for 10 years and just under 300,000. Window mechanism and alternator were the only two failures.

Example 4: 2005 Toyota Camry bought for $18,000 with 15,000 miles under warranty still going strong at 160,000 miles but the A/C compressor did fail and it did need a battery and alternator. So, this has been a relatively unreliable vehicle but the repair costs are less than sales tax on a new car.

The new car smell is what causes people not to have money for retirement.

[54ny77]

New cars, trucks & SUVs are insanely expensive by any reasonable measure.

I recently went and priced out a new work truck, since mine is a dozen or so years old and has cosmetically seen its share of chips, dents, scratches and the famous Ford body rust. Close to 40+ something grand for a very basic 4x4, 3/4 ton, long bed with a radio and power windows.

Amazingly, late model used isn't that much less.

Needless to say, I'm keeping my truck. Besides, a paint job is cheaper than a loan payment....

[oldpotatoe]

I have been very intrigued by this vehicle. What keeps me away is one word, Ford. Any experience with the Transit Connect's reliability?

How about one hyphenated word...butt-ugly?:)

[Nooch]

The new car smell is what causes people not to have money for retirement.

This is why I'm trying to break the cycle, just trying to do it in the most effective way..

[Nooch]

.I would only drive the cheapest simplest vehicles for going to work, around town, shopping and such. Mazda 3's. Honda HRV's and Fit's, etc. Then for that once a year long trip....would rent what I needed. And I was a relatively hi paid person, and would sill do that. I would get a kick parking my Fit next to the BMW's, jags, and Range Rovers of the other guys in the office.

Best friend is big with the brokerage firms... when I met him he was driving a civic coupe. Now he drives a Jetta. Trust me, I get it.

[Ralph]

NOOCH.....You are smart....you'll figure out what you need and what is best for your situation.

[ripvanrando]

This is why I'm trying to break the cycle, just trying to do it in the most effective way..

Ease into it. Gateway drug would be finding the second owner who has a transferable factory CPO warranty. Unfortunately, you need to have the money lined up buying private party. I just missed buying a 2010 E63 with 1 year CPO left, it was $27K with every option and in immaculate condition with 60k miles owned by a rich dude older than I. $110K car. My formula is never paying more than 40% of the new price and it can't have more than 80k on the clock and preferably under 50k mi but vehicle desirability comes into play.

Accords and Camrys are all good basic transportation. A 5-6 year old version in great shape from the second owner wanting to move on.....can be a very cost effective move. The 2005 Camry we have is the XLE V6 that runs $30K new, we got it relatively cheap and it was basically new and had warranty and extended warranty making it a no brainer.

The other factor in cost is low insurance premiums. On my "old" cars, I do not have fire and theft. My S500 Benz runs me $480 per year. A new vehicle is more like $1500 per year but I do get very low insurance rates; nonetheless, 1000 bucks saved per year over 30 years invested can be a nice little sum.

[p nut]

I'm all for smart money, but there is something to be said about modern conveniences, and more importantly, safety. Cars have come such a long way even in the last few years. Gotta find your own balance point.

[54ny77]

funny story about "modern" safety: several years ago my wife got in a bit of a low speed fender bender with a mid 90's buick (her parents' spare car) vs. a new honda minivan. minivan decided to flip a u-turn right in front of my wife while proceeding to get to an on-ramp. the entire side of the honda was utterly toast. seriously, many thousands of $ worth of damage to that vehicle, almost every driver side panel significantly dented and peeled back like an onion.

the buick bumper suffered an 8" scuff of blue paint. that's it.

nypd traffic cop offered to buy the car on the spot!

don't make 'em like they used to in some cases!

I'm all for smart money, but there is something to be said about modern conveniences, and more importantly, safety. Cars have come such a long way even in the last few years. Gotta find your own balance point.

[ftf]

funny story about "modern" safety: several years ago my wife got in a bit of a low speed fender bender with a mid 90's buick (her parents' spare car) vs. a new honda minivan. minivan decided to flip a u-turn right in front of my wife while proceeding to get to an on-ramp. the entire side of the honda was utterly toast. seriously, many thousands of $ worth of damage to that vehicle, almost every driver side panel significantly dented and peeled back like an onion.

the buick bumper suffered an 8" scuff of blue paint. that's it.

nypd traffic cop offered to buy the car on the spot!

don't make 'em like they used to in some cases!

Modern cars are designed to crumple, distributing the impact, thus reducing the impact on it's passangers.....

I was just in a wreck recently, someone blew through a red light, hit me going probably 45-55mph, I was in a 2015 car, I'm fine, not a scratch... The car is not, but who cares, it protected me that was it's job.

[p nut]

don't make 'em like they used to in some cases!

I’m glad they don’t! :D

https://youtu.be/xtxd27jlZ_g

Sucks for the Odyssey lady, though.

[54ny77]

Huh? Sucks for the Honda driver? Needless to say, I couldn't have cared less what happened to that driver or his car.

The moron flipped a u-turn right in front of my wife. Thank goodness it was a lo speed event (around 10 mph) and traffic wasn't moving fast. In other words, he t boned the car she was driving, 100% at fault!!!!

He wanted to leave and give her his insurance info. Yeah, right. I encouraged him to stay (I got there within a few minutes, the accident took place just down road from us, thankfully), cops were called, accident report was clear. That driver totally at fault.

Loved the part where the traffic cop wanted to buy the car right then & there though. He was totally serious, gave us his card, etc. Def. lightened the mood.

I’m glad they don’t! :D

https://youtu.be/xtxd27jlZ_g

Sucks for the Odyssey lady, though.