Author Topic: Lease Ends Next Year - Looking For Car Recommendations  (Read 1073 times)

kroozin

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Lease Ends Next Year - Looking For Car Recommendations
« on: November 25, 2019, 10:34:51 PM »
I leased a car for the first time ever a few years ago (this was before discovering MMM of course!) and I'm trying to figure out my best course of action once it expires in July. Here is my situation:

Current Lease Payment on my 2017 Toyota Corolla = $209.70/mo. When the lease ends in July, I know from reading this blog that buying something used is the best way to go. I am WAY under the allotted mileage on my lease, so there is no fear of extra fees, but I am also not interested in buying it out when the lease is up.

However, I don't know anything really about cars, so I'm looking for suggestions as I begin my research!

What year range I should be looking for? A lot of what I'm reading suggests ~5 years old is the sweet spot, but some of the recommendations I see are as old as 10 years.
What mileage is acceptable for something that will last a long time but not give me a lot of maintenance problems?
And of course, what make/model would you recommend?

For reference, the residual value of the vehicle (what I can purchase it for at the end of the lease) is $13,600.

I know specific makes/models/etc can be very personal, so even tips on what sources to use would be appreciated!
« Last Edit: November 25, 2019, 10:53:23 PM by kroozin »

Dave1442397

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Re: Lease Ends Next Year - Looking For Car Recommendations
« Reply #1 on: November 26, 2019, 06:37:45 AM »
I like to keep my cars a long time, so, based on my own research, this is what I've found:

American cars - basically crap outside the warranty period.

German cars - crazy expensive to maintain outside the warranty period.

For Japanese cars, I would rank Toyota/Lexus first, followed by Honda/Acura. I wouldn't touch Nissan - their quality has plummeted, especially in cars with the CVT.

Hyundai/Kia seem pretty good. From what I've seen, they seem to be holding up well over time.

I ended up buying a 2011 Lexus with 52k miles in late 2017. I only drive around 7500 miles per year, so I hope to keep this car for a long time. I paid 33% of original MSRP.

As for EVs, the battery technology isn't there for me yet. The new glass battery (solid state) may be the answer, but it'll be a few years before it's commercially viable, if in fact everything I've heard about it is true. So who knows, maybe in ten years I'll be able to buy an EV with a 500-mile range that can be recharged in five minutes. If that happens, then gas-powered cars will be on the way out in a hurry.

neo von retorch

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Re: Lease Ends Next Year - Looking For Car Recommendations
« Reply #2 on: November 26, 2019, 07:11:57 AM »
Largely agree with the above. There are exceptions, of course. American cars that are reliable, Japanese cars with troublesome transmissions. But you're mostly playing a statistics game and you're more likely to win if you buy Japanese. The Corolla is an "easy answer."

Why aren't you interested in buying it out? Is the residual price competitive for what you'd buy a similar trim / mileage Corolla? Do you want to spend less than $13k?

As a low mileage driver, you could buy a Toyota/Honda with 100k and get a decade out of it without too much trouble.

kroozin

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Re: Lease Ends Next Year - Looking For Car Recommendations
« Reply #3 on: November 26, 2019, 09:33:58 AM »
Why aren't you interested in buying it out? Is the residual price competitive for what you'd buy a similar trim / mileage Corolla? Do you want to spend less than $13k?

As a low mileage driver, you could buy a Toyota/Honda with 100k and get a decade out of it without too much trouble.

So my main reasons for not being keen on buying it out are that 1) I think the trade-in value is only around the $12k range, and 2) 13k seemed like a lot to spend, but maybe since it's a Corolla (which is known for being reliable) and I have so few miles (I'm at 18.7k after 2.5 years) it's a good deal. I'll have to research some more!

Also, thank you both for the advice! It seems (at least initially) based on what I'm seeing that it might actually make sense to buy it out. I'd only spend ~$3k less, and I'd end up with a car that has 80k miles or more than I have on my own car.

mozar

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Re: Lease Ends Next Year - Looking For Car Recommendations
« Reply #4 on: November 26, 2019, 09:43:16 AM »
You can go to the Kelly blue book website to see price estimates.  Another website that helped me was carcomplaints.com.

RWD

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Re: Lease Ends Next Year - Looking For Car Recommendations
« Reply #5 on: November 26, 2019, 12:25:16 PM »
You don't say what you are using the car for or how much you are driving so it's hard to make a vehicle recommendation. The Corolla is a solid car though so if that's been working out for you then it's hard to go wrong with another one (or buying out your lease, if that makes sense).

Car Jack

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Re: Lease Ends Next Year - Looking For Car Recommendations
« Reply #6 on: November 26, 2019, 12:43:52 PM »
I think you should buy the leased car.

Why?

First, you're way below the mileage so if you turn it in, you paid for those miles and don't get the benefit of them.

Next, you're saying the trade in value is $whatever.  So what?  You can't buy another car for trade in value.  Look at dealer retail.  Ooooooh.  I'll guess it's several thousand dollars more than the residual....especially when you figure in the low miles.

Unless there's some known issue with the car, just buy it.  It's a known.  You don't have to worry that you're buying a fixed up flood car or one where the odometer chip was replaced and it shows 40k miles but in reality has 200k miles on it (and yes, replacing the chip is a thing and not rocket science). 

Corollas are known reliable cars.

researcher1

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Re: Lease Ends Next Year - Looking For Car Recommendations
« Reply #7 on: November 26, 2019, 02:02:25 PM »
So my main reasons for not being keen on buying it out are that 1) I think the trade-in value is only around the $12k range, and 2) 13k seemed like a lot to spend, but maybe since it's a Corolla (which is known for being reliable) and I have so few miles (I'm at 18.7k after 2.5 years) it's a good deal. I'll have to research some more!

Also, thank you both for the advice! It seems (at least initially) based on what I'm seeing that it might actually make sense to buy it out. I'd only spend ~$3k less, and I'd end up with a car that has 80k miles or more than I have on my own car.

You should absolutely purchase your Corolla at the end of the lease.  This is a no-brainer.
- You are way under the mileage limit, and you won't recoup any of the unused miles you paid for.
- You are the original owner of the car, which is highly valuable.  You know you aren't buying someone else's problem.
- You won't find anything else that compares with the long-term cost/mile or cost/year of your current car.

Dave1442397

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Re: Lease Ends Next Year - Looking For Car Recommendations
« Reply #8 on: November 26, 2019, 05:45:03 PM »
My only concern with buying the Corolla is if it has the CVT. There was a recall on 2019 models with the CVT, but I'm not sure how the earlier ones are holding up. It may be fine in the long run, but I would much prefer a regular automatic transmission, or even better, a manual transmission.

kroozin

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Re: Lease Ends Next Year - Looking For Car Recommendations
« Reply #9 on: November 27, 2019, 09:33:36 AM »
Thanks for the feedback everyone! You all have some really good points, and it does look like it makes sense to buy out the car at that point (the retail value does in fact show as a few thousand higher than the residual).

@Dave1442397 I'm not sure what the CVT is, but it's definitely something I'll look into.

My only remaining concern is I won't QUITE have the $13k by July (I've been dumping all my savings into other debt/investments), but absolute worst case I'll be able to put down most of it and pay off the rest within a few months. Appreciate all the advice!

six-car-habit

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Re: Lease Ends Next Year - Looking For Car Recommendations
« Reply #10 on: November 27, 2019, 11:29:58 AM »
 CVT is a continuosly variable transmission. It's like an automatic but there are no separate gear ratio's [ for 1st, 2nd, 3rd, gear etc - although the CVT programming simulates these "shifts" in some vehicles - a true automatic has actual seperate gear wheels/teeth for each speed + reverse, whereas the CVT has 2 main "sloped smooth gears" where a band slides up and down the face of these to change the input ratio {simplified explanation}]]

 Unless you really dislike the cars driving characteristics, or the size does not work for your situation anymore, you are probably best off, buying the car.

 Loan rates are "relatively" low currently, you can probably get a loan at 6% or less thru a local credit union.

MoneyQuirk

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Re: Lease Ends Next Year - Looking For Car Recommendations
« Reply #11 on: December 02, 2019, 12:15:13 AM »
Assuming you're very mustachian and are primarily interested in:

1) Reliability (can it get me from point A to point B at, or near 100% of the time?)
2) Cost-effectiveness

and care less about flashiness, acceleration, cup-holders, etc.

Then I would definitely recommend getting a Toyota. Used preferably, with low mileage.

Good luck!

Monkey Uncle

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Re: Lease Ends Next Year - Looking For Car Recommendations
« Reply #12 on: December 03, 2019, 07:07:24 AM »
You can check out long-term reliability scores for most makes/models sold in the US here: http://www.dashboard-light.com/

In my opinion, that is the best source for used car reliability information because it is based on actual repair records rather than reviews by owners or "experts."

The 2013-2019 Corolla generation has a perfect reliability score, which means it is the most reliable compact sedan that was made during that time.  So, with the residual value of your car coming in $3k below retail, it seems like it would be hard to go wrong purchasing it. 

However, you only drive a little under 7,500 miles per year.  That car should go at least 200k miles.  At that rate, it would take you 24 years to wear it out, assuming it doesn't rust out before the engine or transmission fails.  So, you might want to compare older/higher mileage cars (around 10 yrs/100k mi) just to see how much you might be able to save.  Ultimately, the decision isn't just about money, though.  You have to consider whether you are on board for the more frequent repairs and maintenance that come with an older vehicle.