Last post on Jan 28, 2013 at 6:55 PM
You are in the Sedans
What is this discussion about?
Audi A8, BMW 7 Series, Jaguar XJ-Series, Lexus LS 460, Mercedes-Benz S-Class, Volkswagen Phaeton, Maserati Quattroporte, Mercedes-Benz CL-Class, Sedan
Let's try to define this forum as being limited to luxury performance vehicles where the mainstream version in a typical configuration has an MSRP of at least $60k.
A luxury vehicle with a base price of $59k qualifies because it would typically be bought with some additional equipment, bringing the MSRP over $60k.
Vehicles like the E, 5, A6, M, or GS, even if available in certain versions over $60k, don't qualify because they are cars from companies that have higher end cars in their lineups.
#7206 of 24723 Re: [pablo_l]
Jan 06, 2005 (5:39 pm)
This is upsetting to me. To me, buying a luxury car and holding it for a long time was my favorite strategy. It made me feel like I was using my capital wisely, while still enjoying a fine driving experience. It was an especially good strategy for me since I am a low mileage user (and even more so in recent years since I injured my back).
Real life example: in 1987, I bought a 1 yr old 735 BMW for $31K cash (big first year depreciation on 7s in those days!). I kept it until 1998 when I traded it in for about $5,000 off on a new MB E320 (again paying cash). So my cost for driving a great car was about $180/month (yes, I know, plus the time value of money)!
Admittedly, the numbers are different these days, but the point is the same. That's why I just bought an '05 LS for cash instead of another MB this time-- I plan on holding it for long time. But if Pablo is right and nobody is going to bother building cars that hold up long term anymore, I will end up paying $700+/month like all the lessees. And I don't really care about getting a new car every 3 or 4 years if I can be driving a fine older one (with low mileage in my case).
Please Lexus, don't try and follow the path of "planned obsolescence". Toyota didn't get where it is by selling short-term fashion plates cheaper than the Germans. There is still a market for people who want quality. Otherwise, Pablo is right and I would lease an S over an LS(I still love the look and feel of the former), and just dump it every 3 years (and hope I get one that doesn't have to be in the shop too often even in those first 3 years!).
#7207 of 24723 Re: [garyh1]
Jan 06, 2005 (5:48 pm)
I agree with you. Owning a quality vehicle, and holding on to it, makes the most sense. Lets just hope that companies keep making quality vehicles.
Jan 06, 2005 (5:54 pm)
Let's just be careful that we don't we get into "moralizing" about the methods folks choose to use to acquire their vehicles. We all have our different reasons for using whatever vehicle (ha!) seems to be most expedient, but judging those decisions is not what we are about.
We need to discuss the cars and not rip people for making financial decisions with which we do not agree.
#7209 of 24723 Re: [kgary]
Jan 06, 2005 (6:41 pm)
Nothing wrong with that philosophy - It's just not for me. I am fortunate as I can write the check for any of these cars - nevertheless I'll continue leasing - partly because I use a car for my business and partly because I do like a new set of wheels every 3 years. Thus I lease my personal vehicle as well.
#7210 of 24723 Thanks, Pat_Host
Jan 06, 2005 (6:55 pm)
For trying to bring this back to some sanity. Now let's get back to talking about luxury cars....
#7211 of 24723 Re: [garyh1]
Jan 06, 2005 (9:19 pm)
It's hard for me to believe that leasing beats buying except in odd circumstances with very subsidized leases for people who want new cars every 3 years, and with cars that are a lot of trouble after just a few years. Maybe some Jags and MBs are like that. But I doubt that the Acura/Lexus/Infinitis and possibly even the Cadillacs require >$3000 a year in maintenance and repairs even after 5 or 6 years. I know for sure that many of the used 7 or 8 yr old LS400s with 90K miles discussed in Lexus forums cost maybe upfront $2000 in repairs (say if bought cheap 3rd hand) followed by no more than another $1500-$2000 in total maintenance and repairs for 5 years after that.
If you have hard numbers on this, I'd appreciate learning a source because I'm quite interested in this issue.
But if you're just guessing that people will be so fickle that long term reliability has little value, then who knows... You may turn out to be right.
Jan 06, 2005 (9:36 pm)
This is not the place ...
The positives and negatives about leasing are being discussed on our Smart Shopper board - I hope that those of you who are interested in pursuing this subject will look up appropriate discussions there and continue.
But here we are talking about vehicles, not the ins and outs of various financing methods.
#7213 of 24723 Re: [jvcn]
Jan 06, 2005 (11:07 pm)
I'll just answer the leasing question and then drop it per Pat's request. But say you can lease a $62K LS for $825 per month (36 months) (some have said they got $50-75 better than this) then buy it at lease end for $35K and it costs you $500 in bank fees. This is a pretty typical deal. Out of pocket costs are $65,200. If you assume a 3.5% interest factor (interest you could have gotten on a 3 year CD) than your lease payments would have earned about $1600 had that money stayed in your pocket - so add that in and your out of pocket is $66,800. If you could have bought the car outright for say $59K (Edmunds TMV is $60K) than after 3 years you're real out of pocket is $65,400 (using that same 3.5% lost interest factor; 66,500 if I use Edmunds TMV). Is it worth $1400 (and only $400 if Edmunds TMV is right) to decide 3 years from now that you want the car?? That's the premium factor. If you can do better than 3.5% on your money in 3 years it may well swing the bias toward leasing on a pure cash basis and you have the added benefit of buying or passing on the car after you got to know it and its reliability. Tax deductions in leasing - if they apply - blow it out of the water in leasings favor. I kept this rather simple without PV's and I left out sales tax. But leasing isn't really all that much more than buying at all and you have the option of looking at your finances to decide if you want to buy what you leased or re-up on a new lease at the end.
Jan 07, 2005 (7:30 am)
Money tied up in kids trust funds is not free un-encumbered cash (ie. facing severe tax consequences if looting is attempted); money tied up in the house is not free un-encumbered cash (there is no money in the house except for those under the mattress or something, or those parts that one can sell without losing a roof over the head). Once again, it is pretty sad for someone who makes "a couple/few hundred thousand a year," there isn't $70k free un-encumbered cash around somewhere.
Mortgage tax deduction doesn't really wash very far either. There are severe limits on the tax deductibility of 2nd mortgages for non-home improvement purposes (ie. take-outs), especially for someone who makes "couple/few hundred thousand dollars a year." The usual cap is $100k, and further restrictions kick in as early for gross income as under $70k for single/separate filing, and $140k for couples. KD's friends making "couple/few hundred thousand" per year must have less than $100k eligible for mortgage deduction due to their higher income.
Even with mortgage tax deduction, 5.5% is turned into 3.7% effective, still higher than most car manufacturer's loans and lease money factors.
#7215 of 24723 Re: [brightness04]
Jan 07, 2005 (9:15 am)
brightness - you're beating a dead horse. Suffice it to say, people have their reasons for doing things a certain way. BTW - go and read the original post carefully.