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Topic Review (Newest First)
03-05-2013 07:09 AM
Rogerschro
Quote:
Originally Posted by asting View Post
I'm not trying to tell you what to do, but there's very little room for opinions in finance (as paying less for the EXACT same thing is objectively better).

Depending on your options, and what you were offered you did not do well.

Most leases have a fixed monthly payment, however the depreciation rate on most autos is very heavily front weighted. That is, you experience a 25% drop in value within the first year, and the rate of depreciation decreases over the life of the vehicle.

Fixed lease payments don't cover the drop in value the first year, however they make up for it in later years by charging you more than the monthly value decrease of the car. By trading in after one year, you took the largest hit for depreciation and "paid" way more than you would for a lease.

If this doesn't make sense I can make a graph showing the linear, vs exponential, concave up decreasing costs under each scenario.
LOL! no need for graphs! I understand statistics and finances. As you state Depending on options and such I may or may not have done well.... So a weak argument to state I didn't do well if you don't know the numbers... BUT, I will say you are right in that in almost every case it is a loosing proposition to trade early. I did not get the Cmax at a steal, I got it at a price I considered fair. That makes it a good deal for me. My dealer has gotten a fair but of business from me lately and because of this, they hunted down the car I wanted at the terms I asked for and found a Cmax with not only the features I wanted but also the heated seats and MFT system that I didn't ask for, but was available rather than ordering one. I was very specific on what color exterior and interior. I also specified the Zebart protection plan and ESP plan be a part of the sell price. I set the terms of how much I was willing to pay, my monthly payment and length of payments. I set this on their table and said if you meet these requirements I will buy. They exceeded these requirements with the winter pack and MFT. I got the color and the interior features I wanted. I didn't have to settle for a second choice or pay more than I agreed to. Some may say I didn't do well, I should have done better or waited until I owed less on the car than the current value, but I got what I wanted out of the deal, the car is great and my girlfriend loves it, so I got a good deal. ( I even got a lower interest rate than usual for the duration of the terms, it helps to have a high credit rating....)
Here is a shot of the new car.

And one with my FGM which I still own. Two great cars!
03-03-2013 03:35 PM
asting
Quote:
Originally Posted by Rogerschro View Post
Had I done a one year lease, I would have paid about the same, so yes, you are correct. BUT, I think it was a good deal, and since it is my choice and I agreed with the terms, it is a good deal for me. Someone else may not think so but at the end, it is each of our choices we live with.
I'm not trying to tell you what to do, but there's very little room for opinions in finance (as paying less for the EXACT same thing is objectively better).

Depending on your options, and what you were offered you did not do well.

Most leases have a fixed monthly payment, however the depreciation rate on most autos is very heavily front weighted. That is, you experience a 25% drop in value within the first year, and the rate of depreciation decreases over the life of the vehicle.

Fixed lease payments don't cover the drop in value the first year, however they make up for it in later years by charging you more than the monthly value decrease of the car. By trading in after one year, you took the largest hit for depreciation and "paid" way more than you would for a lease.

If this doesn't make sense I can make a graph showing the linear, vs exponential, concave up decreasing costs under each scenario.
03-03-2013 12:48 PM
Yanner I expect that whatever deal one might be able to make during such a "buy back event" (which is terribly misleading, should be called trade-in event) is a deal you should be able to make any day of the week. Actually, by calling it an event and putting a deadline on it, it's another pressure tactic to make the sale happen.

They are in the business of selling cars and like someone mentioned, this is a 2 for 1 for them.
03-03-2013 08:58 AM
Mile30 Before you walk in their door bright-eyed; you have GOT to do some math for yourself!

What was MSRP on your car when you got it? Cut that number in half the first two years. We just did a basic appraisal (what the salesperson is going to do before handing the keys to the used car mgr). The manager will weigh current condition and miles on your car against black book (local/nat'l auction prices) to arrive at the offered value.

You also need to find out, to-the-day, what you owe on it. Subtract the appraised value from the note's balance to see if you're carrying equity or "upside-down". If the latter; it's not an advantageous move for you. However, any equity can help boost money down in addition to and dealer incentives or mfg's "cash back".

If you can trade into a vehicle with better features for the same payment; you'll only be extending the number of years you're responsible to pay on it... but in a 'better' car. Those flyers are distributed solely to "drive foot traffic" in the door and create more oppotunities for their sales force to close deals. The same way a shop might offer you a free oil change in order to get permission to walk under your car and look for problems to fix that you may not have been aware of.

If you're tired of you current car or worried about failing equipment on your car, then neither sales/service trying to sell or fix you up is a bad thing... just educate yourself a bit before walking in!
03-03-2013 08:51 AM
Rogerschro
Quote:
Originally Posted by lorddave View Post
I thought the 2012 focus had serious transmission issues? Why would the dealer want to risk buying back a car they can't sell?
Probably because it isn't such a serious issue. It's like listening to Fox or MSNBC, too much time listening to either one and you end up with a very bad idea of what is really going on in the world.... We just read about it or experience our own issues, but it is the dealerships that really feel the pinch or any problems that arise frequently. They have a much better understanding of what is selling and how much they can ask for a given car in their region. My car never had an issue with anything on it. I happen to have Two and wanted a Hybrid for the city commutes my girlfriend does. Plus it has more room for hauling her daughter, child and stroller around. Otherwise I would not trade in the focus for it. I really like my own and will be keeping it for a long while to come. Getting tint done next week!
03-03-2013 07:55 AM
lorddave I thought the 2012 focus had serious transmission issues? Why would the dealer want to risk buying back a car they can't sell?
03-03-2013 07:15 AM
Rogerschro
Quote:
Originally Posted by asting View Post
Just because you got more than you owed doesn't make it a good deal. If it's a $20k car and you put down ten grand, just because they'll over you 15 a year later doesn't make it a good deal. Car values drop crazy fast the first few years. You basically paid a few thousand for a one year lease.
Had I done a one year lease, I would have paid about the same, so yes, you are correct. BUT, I think it was a good deal, and since it is my choice and I agreed with the terms, it is a good deal for me. Someone else may not think so but at the end, it is each of our choices we live with.
03-02-2013 08:21 PM
scott7278
Quote:
Originally Posted by suss6052 View Post
Now for the average person that's true, they may have been more concerned about $0 down and hitting a certain payment per month. I was more concerned about what I would still owe.
That's very wise!

Sent from my Android using FF Mobile.
03-02-2013 07:59 PM
opies
Quote:
Originally Posted by Ybbogus View Post
Why would you ever trade a car that's is less than 3 years old??? Steepest depreciation curve. Total waste of money. If you go that route you will get taken 120% of the time and will end up driving a 35k dollar golden Focus. It's simple math really.......
Dealers offer these sovcalled buybacks to sell new cars and to make money on yours. If you fall for it, dealer is the winner. :)
Not always true.

Not to mention since we are currently in a market where more and more people can only afford used cars, their value has increased. Both to people who wish to sell them, and to dealers who have more and more people looking for used over new.
03-02-2013 07:33 PM
asting Just because you got more than you owed doesn't make it a good deal. If it's a $20k car and you put down ten grand, just because they'll offer you 15 a year later doesn't make it a good deal. Car values drop crazy fast the first few years. You basically paid a few thousand for a one year lease.
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