Author Topic: Fancy Pants Car  (Read 1855 times)

ranDMC

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Fancy Pants Car
« on: October 11, 2019, 11:57:55 AM »
A little over a year and a half ago I took out a loan on a used GTI. I am paying $440 a month for this car and have 34 payments left. That probably made some people on this forum short circuit. I apologize in advance but the rest of this scenario might sound equally batty.

I found a deal on a lease for $117 a month for a BEV that would be a zero down truly sign and drive.

Here is my question, what makes more sense keeping the GTI and finishing the remaining payments so I outright own the car and have no payments left OR sell the GTI and lease a car while saving the difference between the lease price and auto payment.

I'd have somewhere around $13K saved at the end of 36 months that I could use to pay cash for a used vehicle...

I know there are more moustacian options out there. Like sell the GTI and buy a clunker minivan, but right now I'm not considering that. What one makes more sense to you?

RWD

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Re: Fancy Pants Car
« Reply #1 on: October 11, 2019, 12:26:52 PM »
Okay, first I'd like to clarify how expenses work. The GTI is not costing you $440/month, that is only the cash flow associated with the financing. The calculation for the cost of the car itself would be the sum of registration/taxes, insurance, fuel, maintenance/repairs, depreciation, and loan interest. In order to fairly compare one vehicle option to another you should calculate all those things for both and see how they stack up.

That said, the lease you mentioned for the BEV is almost certainly a cheaper option than your current GTI. If it were between those two options I would recommend going for the BEV and selling the GTI immediately. There is no scenario where you save money by having both cars until the GTI is paid off because of the continual march of depreciation.

Sandi_k

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Re: Fancy Pants Car
« Reply #2 on: October 11, 2019, 01:04:52 PM »
Leases are very bad if you drive more than the contract allows. Also, you should expect to pay some amount for "damage" when you turn it back in. Take pics, and keep it cleaned up before trading it back in, if you go that route.

big_owl

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Re: Fancy Pants Car
« Reply #3 on: October 11, 2019, 06:33:44 PM »
GTI is a nice car, if you can afford the payments I would just keep that for ten+ years, even pay ahead if you want to get rid of the payments sooner.  Being car payment free is an awesome feeling, something you'll never experience if you decide to....

... Lease a car, also known as renting a car. 

six-car-habit

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Re: Fancy Pants Car
« Reply #4 on: October 11, 2019, 08:25:24 PM »
 What is a BEV ?  Basic Electric Vehicle ?

 GTi for the win. But i'm biased, as it's one of the six cars comprising my habit. If you got the automatic / dsg style version, well that would be a bummer...

ysette9

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Re: Fancy Pants Car
« Reply #5 on: October 12, 2019, 12:30:49 AM »
Haha, another biased GTI owner here as well!

But run the numbers. I donít know what a BEV is either. How long would thť lease run and what would your options be at the end? Knowing yourself, can you be a good little boy/girl and keep the GTI until it dies? Would you actually save the money if you got the cheaper lease or would you spend it?

RWD

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Re: Fancy Pants Car
« Reply #6 on: October 12, 2019, 06:35:18 AM »
BEV = Battery Electric Vehicle

Brianmcg321

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Re: Fancy Pants Car
« Reply #7 on: October 12, 2019, 08:09:31 AM »
Neither makes sense to me.

Why do you have to borrow money to buy a car.

Leasing is the most expensive way to operate a vehicle.

ysette9

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Re: Fancy Pants Car
« Reply #8 on: October 12, 2019, 11:43:50 AM »
BEV = Battery Electric Vehicle
Ok. What everyone else would call an EV. Gotcha.

RWD

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Re: Fancy Pants Car
« Reply #9 on: October 12, 2019, 12:12:10 PM »
BEV = Battery Electric Vehicle
Ok. What everyone else would call an EV. Gotcha.
Yes, usually referred to as just EV because it is assumed battery powered unless otherwise stated. But there are electric vehicles that are not battery powered. Fuel cell vehicles, for example.

ysette9

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Re: Fancy Pants Car
« Reply #10 on: October 12, 2019, 12:56:15 PM »
BEV = Battery Electric Vehicle
Ok. What everyone else would call an EV. Gotcha.
Yes, usually referred to as just EV because it is assumed battery powered unless otherwise stated. But there are electric vehicles that are not battery powered. Fuel cell vehicles, for example.
I was thinking of fuel cells as a counterpoint except I barely ever see one on the road, so donít consider them part of normal discourse. I only know of one hydrogen filling station in the area.

Bernard

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Re: Fancy Pants Car
« Reply #11 on: October 12, 2019, 01:03:40 PM »
You sell the GTI and buy a cheap car outright. What do people drive who with 2 kids at home and despite having normal government jobs saved 70% of their income and retired with a 7-figure stache at 39/41?

https://www.youtube.com/watch?v=9_V-tI9Aryc

There are fantastic cars out there in the $3,500 to $5K price range.
« Last Edit: October 12, 2019, 01:05:11 PM by Bernard »

wotstheguts

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Re: Fancy Pants Car
« Reply #12 on: October 12, 2019, 06:27:57 PM »
Clearly as an aspiring Mustachian you've seen the error of your ways, which is great!

From my perspective, borrowing money to buy an expensive car is just about the most insane thing one can do - the car plummets in value, while you pay a lot more than what it was originally worth because of interest. Madness! This (along with credit cards) gets so many young people (men especially) up financial sh*t creek without a paddle.

Admittedly I'm far from perfect. When I was younger I went through a phase of buying near-new cars (thankfully I wasn't mad enough to buy something brand new). But I never took out a car loan. Later I calculated that I'd thrown about $20,000 down the toilet in depreciation alone. After that revelation I bought a ten-year-old Honda Civic for $5K cash, which faithfully served me for about ten years with barely a niggle until I sold it for $2,500 (after inheriting my parents' slightly newer Honda Fit - a move I later regretted, but that's another story).

From a financial viewpoint, cars are nothing but a necessary evil. (Those who see a car as a status symbol which makes them feel superior may want to take an in-depth look at their attachments and insecurities.) A car is a money-sucking metal box on wheels to get you from A to B a bit quicker (when you're not stuck in traffic), that's it. So IMHO one should buy the cheapest but most reliable (Toyota, Honda, or Hyundai) vehicle one can find and keep it well maintained and hang on to it for as long as possible.

Or keep it until EVs are no longer bleeding edge, and a long-range EV can be bought reasonably cheaply second-hand. Fossil cars are rapidly being obsoleted by EVs (some EVs are far quicker than just about any petrol car on the road, but you probably know that). So the depreciation on a fossil will likely be massive when the tipping point comes, probably sometime in the next 5 years.

So to conclude this long rant, I'd agree with other posters that you should consider selling the GTI before it depreciates further, and get rid of that car loan before flushing too much more money in interest. I don't know how much cash that would leave you with, but you could probably get a reliable used Japanese or Korean (definitely not European) car for less than $5K. I'd suggest NEVER borrowing money to buy a car ever again if you can avoid it.

Leasing seems a waste of money to me too, though I have no experience with this.

I've been mocked sometimes for my old Hondas - mostly by people who are still working their asses off to support the car loan on their brand new money pit. Having retired at 35, I don't care.
« Last Edit: October 12, 2019, 08:13:10 PM by wotstheguts »

JLee

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Re: Fancy Pants Car
« Reply #13 on: October 14, 2019, 02:55:45 PM »
Neither makes sense to me.

Why do you have to borrow money to buy a car.

Leasing is the most expensive way to operate a vehicle.

Not necessarily -- some leases have been so heavily subsidized that they're a better deal than one might think. People were getting EVs for sub-$100/mo a few years ago, and once you figure in gas savings vs any other normal gas-engine car you're financially ahead vs something else.

wotstheguts

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Re: Fancy Pants Car
« Reply #14 on: October 20, 2019, 01:41:48 PM »
Have to admit, the option to lease an EV for only about $100/month sounds intriguing - is this for a pre-2019 Nissan Leaf, or something with a longer range? What other ongoing costs would there be? Sounds like a potentially cheap way to run a vehicle, with no fuel costs and extremely low maintenance costs. No such deals where I live unfortunately.

Car Jack

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Re: Fancy Pants Car
« Reply #15 on: October 21, 2019, 08:44:51 AM »
You need to do the math.

$117 a month plus what?  Lease start up costs?  A down payment?  I mean....you could lease a Lamborghini for $117 a month if you put up a down payment of $150k. 


Mgmny

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Re: Fancy Pants Car
« Reply #16 on: October 22, 2019, 09:07:00 AM »
A little over a year and a half ago I took out a loan on a used GTI. I am paying $440 a month for this car and have 34 payments left. That probably made some people on this forum short circuit. I apologize in advance but the rest of this scenario might sound equally batty.

I found a deal on a lease for $117 a month for a BEV that would be a zero down truly sign and drive.

Here is my question, what makes more sense keeping the GTI and finishing the remaining payments so I outright own the car and have no payments left OR sell the GTI and lease a car while saving the difference between the lease price and auto payment.

I'd have somewhere around $13K saved at the end of 36 months that I could use to pay cash for a used vehicle...

I know there are more moustacian options out there. Like sell the GTI and buy a clunker minivan, but right now I'm not considering that. What one makes more sense to you?

What's the deets on this $117 a month EV lease? Leaf? Bolt? How did you find it?