Author Topic: Got rid of my 2016 lease!  (Read 1556 times)

LuxuryIsADrug

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Got rid of my 2016 lease!
« on: November 22, 2016, 01:32:24 AM »
So in 2014 I finished college and landed a temporary job (November) earning a base pay of $53,000 CAD/year. Six months later I landed a full time position (April 2015) with base pay of $78,000 CAD/year.

My 2001 Chrysler Sebring started having some really strange electrical issues (7 years of ownership) and as a young professional with my new fancy pants job I decided I should lease a 2016 Subaru WRX Sport-Tech in July 2015. What a glorious day I thought! I've made it! I deserve to live like a king!

Luckily my co-worker had heard of MMM so around this time I started to delve into this FIRE world. 

It took me 388 days before coming to the conclusion I need to change my spending habits, 61 days to buy a used Honda Fit and a final 29 days to get rid of my lease. Subaru luckily took the car back at its remaining equity.

Let's look at the numbers:

Lease - WRX
Cost: $42,000 @ 3.9% for 36 months
Monthly payment: $580
Insurance: $190
Gas: $200
Winter tires (36 mths): $1450
GPS Command Start: $1200 (An absolute waste, I used it only a handful of times and it wasted so much gas. Manual car)
Maintenance (2 years; expired warranty): $500/year

Total projected ownership (3 years): $36,603
Total projected ownership (5 years): $73,564**

**Assuming buyout: $24,000 @ 3.9% for 24 mths

2013 - Honda Fit
Cost: $12,000 @ 5.1% for 24 months
Monthly payment: $528
Insurance: $140
Gas: $100
Winter tires (36 mths): $800
Maintenance: $500/year

Total projected ownership (3 years): $22,834
Total projected ownership (5 years): $31,172

That's some nice savings and I'm no longer stressed about my car ownership! I spent an average $1000/mth to own the 2016 WRX over the course of 16 months. $16,000 for essentially a glorified rental. Ouch.

If you're interested in following my progress check out my journal: http://forum.mrmoneymustache.com/journals/from-luxury-addict-to-frugal-warrior/

I'm looking forward to 2017. I still make many mistakes and I have many habits I need to break so this will be an interesting chapter in my life.


« Last Edit: November 27, 2016, 01:03:59 AM by LuxuryIsADrug »

Slee_stack

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Re: Got rid of my 2016 lease!
« Reply #1 on: November 22, 2016, 10:24:49 AM »
Excellent job and congrats at recognizing and rectifying a financial 'mistake'.

Many of us have made similar mistakes in the past.

I bought a vehicle that basically put me out $900/mo over 18 mo until I finally got rid of it. 

Now I have one which runs me closer to $300 in real costs per month.  I am so much happier having a much more boring car yet I still enjoy driving it!

Step37

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Re: Got rid of my 2016 lease!
« Reply #2 on: November 24, 2016, 10:45:27 PM »
Well done - congrats for walking away from the money pit and making a much smarter decision!

I, too, have fallen victim to the luxury car fiasco. Bought a low km 2008 Audi S5 in 2011 for 50k, drove it for nearly three years and sold for 30k. It sure was pretty and fun to drive, but certainly not 36k(ish) of fun (I've never run the exact numbers because it makes me too sick!). I am SO over trying to impress anyone with my car. I only wish I'd found MMM before I put all the money I sold it for into buying a brand-new Mazda (paid in full and far more practical, but still... should have spent half or less on a used model). No debt, good savings and plan to drive it for a loooong time, so I can (weakly) justify.

PhoenixHeat

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Re: Got rid of my 2016 lease!
« Reply #3 on: November 25, 2016, 06:39:59 AM »
Consider yourself lucky to be tuned into the concepts here MMM early in your career! Great job getting out of the lease and into something practical!


LuxuryIsADrug

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Re: Got rid of my 2016 lease!
« Reply #4 on: November 27, 2016, 01:20:51 AM »
...I, too, have fallen victim to the luxury car fiasco... I am SO over trying to impress anyone with my car.

And to think I was considering leasing a new BMW or Mercedes after this car, potentially ending the lease early, to upgrade even faster. It's hard to make a change in your life that drastically changes peoples perceptions of you.

When I bought the Honda Fit I had multiple people comment "Really? That car doesn't suit you.", "It looks like a taxi!", "Weird. I'd never imagine you driving a car like that".

Breaking these preconceived notions is always interesting.



Consider yourself lucky to be tuned into the concepts here MMM early in your career! Great job getting out of the lease and into something practical!

Quite lucky indeed. Far less stressful too!