The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: georgec on October 24, 2016, 09:02:29 AM
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My car lease is nearing the end (July 2017, about 9 months from now). I will be buying a used car (of course). I've already begun looking. It occurred to me that I might find the ideal next car.
Would it be crazy to buy the next car, even this early? I planned on having the next car at least 3 months prior to the end of the lease so I wasn't scrambling and end up with something out of desperation.
I get a lot of offers from local dealerships about buying out my leased car early. I know they want me to lease another one, but possibly I could sell this thing early, and having the next car would make that process easier and also I'd be more motivated to sell.
I can't imagine the depreciation on whatever used vehicle I get is going to be a big deal for an extra 6 months. I will have to talk to my auto insurance company about it, as that is an unknown cost. And interest for 6 months on $5000 isn't going to amount to much.
I have the money set aside for both the rest of the lease and the next vehicle.
The question isn't if I will buy the next car before the lease ends, but how early?
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In the past, it's taken me about 1-2 months from starting to seriously look for a new-to-me car to finding a good one and registering it. I think 3 months is plenty reasonable. My purchases have all been private party.
I have no idea how ending a lease early ("buying it out") works, but if that is doable and would save you some coin, it sounds like the earlier the better. Do keep in mind that if you have a trip you're going to do serious miles on, and it's within your lease limits, you could get that out of the way before dumping it, and the "save" putting the miles on the new car (like when I put 1000+ miles on a rental car in a weekend and it penciled out cheaper per-mile than driving the car I ended up buying afterwards).
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Yeah that was my thinking on the timeframe. At minimum. I figured I'd rather do my looking when there isn't any snow on the ground, hence looking now rather than later.
Ironically, the junk mail that advertised the lease buyout offers is long gone, and I've had no luck finding these local offers online. Probably just not word in it in Google correctly. Most of them offered "up to 4 payments" prior to lease end.
I do have a few dings and dents that I need to consider. I took the vehicle in for appraisal by the dealer and he saw some damage (from acorns!) that he said would affect my turn in. He also mentioned the low mileage would probably offset that. Now I notice to scratches in the hood and trunk. I've never filed an insurance claim for this kind of stuff. Not sure if it's worth it. Or if it will affect my turn-in significantly.
My lease coincided with my dedication to frugality, so my bike riding has reduced my mileage to about 16,000 miles here at month 27 on the 36 month lease. This includes a trip from Ohio to Utah and down to the Grand Ganyon and back, plus lots of local 1 to 5 hour vendor events I have been traveling to.
I have some other trips in mind to do just as you mentioned, take advantage of the mileage. But I've got those minor repairs that low mileage could possibly offset.
I need to call my insurance company and find out gpfromfrom them what my options and costs are if I went that route. Or just paying out of pocket.
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I went through this like six months ago, and ended up with about a one month overlap between new (to me) car acquisition and lease return. In my case, there wasn't any residual over the buyout, so I just rode out the lease and returned it normally. Check and see if a dealer is willing to give you anything for your lease on trade. Depending on a bunch of factors, this is sometimes the case.
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I spoke with the dealer last summer about options to end the lease early. They were the ones who told me about the possible residual value for the low mileage, and indeed said if I got another vehicle through them (including used vehicles), they would let me out of the lease.
Then he told me that the acorn damage would offset any residual value I'd accumulated.
So how long was your search for the next car before you picked one up?
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Don't forget insurance and registration on that second vehicle. And never even consult your insurance company over minor damage. They might pay for it up front, but then they crank up your rates to cover it, plus you have a claim in your history when you try to shop for other insurance. Not usually better than paying OOP. There are literally millions of used cars out there. Unless you can get out of your lease early at no extra cost, I'd wait until about 60 days out. The pain of waiting will keep you from ever leasing a car again.
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I spoke with the dealer last summer about options to end the lease early. They were the ones who told me about the possible residual value for the low mileage, and indeed said if I got another vehicle through them (including used vehicles), they would let me out of the lease.
Then he told me that the acorn damage would offset any residual value I'd accumulated.
So how long was your search for the next car before you picked one up?
I spent probably two or three weeks just trolling the internet to see what options were out there, and what might fit with my needs/wants. It was another two or three weeks of actively searching for something to buy, test driving and executing the purchase. FWIW, I went from a Honda Civic Si to a Mazda3 hatchback, and I'm happy.
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Don't forget insurance and registration on that second vehicle. And never even consult your insurance company over minor damage. They might pay for it up front, but then they crank up your rates to cover it, plus you have a claim in your history when you try to shop for other insurance. Not usually better than paying OOP. There are literally millions of used cars out there. Unless you can get out of your lease early at no extra cost, I'd wait until about 60 days out. The pain of waiting will keep you from ever leasing a car again.
Yeah good call on the insurance. And the advice to endure the torment to learn a lesson!
The only reason I'm considering looking so early is because I bought a used vehicle a couple of years ago (a motorhome — don't worry, already sold and learned that lesson!). The process of searching for that thing was a nightmare.
When my Jeep Wrangler of 14 years finally had a rusted frame right after buying the RV, I was so fed up with used vehicles that it played a factor in the leased car choice.
Have to say in hindsight that both the RV and the lease were the best choices I could have made — both forced me to finally examine my finances and educate myself on investing. It got me to the MMM blog, and got my focus straightened out. I also took some trips and other new adventures that I might have not done without a reliable car. But yeah, lesson learned, time to break those chains!
Reading over this post, I sound like the poster boy for MMM — Jeep Wrangler (plus I used to commute 45 mins 3 days a week for a crap-paying job in that thing), motorhome, leased car! And now I'm biking all through Ohio winters for all local trips.
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I spoke with the dealer last summer about options to end the lease early. They were the ones who told me about the possible residual value for the low mileage, and indeed said if I got another vehicle through them (including used vehicles), they would let me out of the lease.
Then he told me that the acorn damage would offset any residual value I'd accumulated.
So how long was your search for the next car before you picked one up?
I spent probably two or three weeks just trolling the internet to see what options were out there, and what might fit with my needs/wants. It was another two or three weeks of actively searching for something to buy, test driving and executing the purchase. FWIW, I went from a Honda Civic Si to a Mazda3 hatchback, and I'm happy.
Cool, thanks. Yeah I've just been looking to get ideas of prices. Figured I might as well look at some, then realized "what if I find the right car?", which promoted this line of thought.
Because I need the hauling capacity, and I've heard good reports on it, been aiming for a Honda Element. I'm open to anything hatch-backed too, though. I have a Civic coupe leased right now.
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Cool, thanks. Yeah I've just been looking to get ideas of prices. Figured I might as well look at some, then realized "what if I find the right car?", which promoted this line of thought.
Because I need the hauling capacity, and I've heard good reports on it, been aiming for a Honda Element. I'm open to anything hatch-backed too, though. I have a Civic coupe leased right now.
Wife's (leased) car is a CR-V, which has been pretty good for transporting large amounts of stuff without too much of a penalty at the gas pump. That one's next to go, but we haven't figure out what we're going to do yet. Planning to pay off some debt from self-funded unemployment before we tackle it.
Not sure how it compares to the Element with regard to utility, but you'd have a hard time finding a dealership anywhere that didn't have one available used.
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Cool, thanks. Yeah I've just been looking to get ideas of prices. Figured I might as well look at some, then realized "what if I find the right car?", which promoted this line of thought.
Because I need the hauling capacity, and I've heard good reports on it, been aiming for a Honda Element. I'm open to anything hatch-backed too, though. I have a Civic coupe leased right now.
Wife's (leased) car is a CR-V, which has been pretty good for transporting large amounts of stuff without too much of a penalty at the gas pump. That one's next to go, but we haven't figure out what we're going to do yet. Planning to pay off some debt from self-funded unemployment before we tackle it.
Not sure how it compares to the Element with regard to utility, but you'd have a hard time finding a dealership anywhere that didn't have one available used.
I looked at the CR-V (and the Odyssey). MPG is virtually the same for CR-V & Element (CR-V slightly better). Element has a bit more cargo room, and a lower bed and tailgate. I plan on hauling my bicycle in it at times too, and read I can get it in upright the back of the Element. My brother also sleeps in his when car camping, which is a use I'd like to have.
But yeah, far more CR-Vs out there at dealers. But I've also seen plenty private party sales of Elements on Craigslist. I'm confident one will meet my needs when I'm ready to buy.
I think my aim will be to have the Next Car in my possession 2-4 months prior to the lease end, in case one of those buyout offers is worth doing. I assume they are all just ways to get me in and buy into a new lease, so I am not banking on that option very strongly.
That puts me at Feb-March 2017 to start looking seriously, at the very latest.
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We recently bought a car from Hertz. They sell current year models, with relatively high mileage. We wanted a 2016 Mazda CX-5 and the $26,000+tax & fees new price was more than we wanted to spend. We got a 2016 w/ 44,500 miles that looks and drives like new (almost) for $17,235. There's still 15,000 miles left on the drive-train warranty. So far we're very happy with it.
That was the only place I could find used 2016 models for sale. The older ones only have 2.0 liter engines, and we wanted the 2.5 liter.
Oh the "shopping" was very quick & easy since I already knew the model we wanted. It only took about a week of looking & scratching my head over it.
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We recently bought a car from Hertz. They sell current year models, with relatively high mileage. We wanted a 2016 Mazda CX-5 and the $26,000+tax & fees new price was more than we wanted to spend. We got a 2016 w/ 44,500 miles that looks and drives like new (almost) for $17,235. There's still 15,000 miles left on the drive-train warranty. So far we're very happy with it.
That was the only place I could find used 2016 models for sale. The older ones only have 2.0 liter engines, and we wanted the 2.5 liter.
Oh the "shopping" was very quick & easy since I already knew the model we wanted. It only took about a week of looking & scratching my head over it.
I hope you took it to a mechanic before you bought it. YMMV, but I rented scores of cars in my working days. I never did doughnuts in a parking lot, but plenty of lead footing and hard braking happened. I wasn't reckless, nor was I as careful as I would have been in my own vehicle. I'm sure others drive the same way or worse in rental cars. Caveat emptor.
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Yeah I am definitely not interested in current model cars. I'm pretty Strict Mustachian, was mostly that way even before I discovered the MMM blog. I lost my way a bit with the lease. But it also served to get me to take a hard look at my behavior and get back on track.
My main question was basically "is 9 months out too early to look for a replacement car when leasing?", in case it got lost in the shuffle.
I keep seeing ideal model year/price/features for the Element pop up regularly enough on Craigslist to not feel like i need to jump right now. But I still like the idea of looking when there's no snow on the ground.
I also called the dealer about the "early buyout" offer, which as suspected was mostly a way to try and get you into a new lease. But they were open to selling me a used car off their lot, which makes the CR-V a possible candidate.
But with the price and specs nearly the same on the Element and CR-V, I'll probably just go with the Element since I think it fits my needs better and I'll not be buying another vehicle for hopefully 10+ years.