Academically, it’s enjoyable for a journalist or an analyst to watch how one variable can interact with another to produce fascinating results. It’s a little less enjoyable if you’re a real human who bought a car at above-market prices during the pandemic and now find yourself underwater on your loan for market reasons beyond your control. Apologies in advance, but The Morning Dump probably isn’t going to make you feel better if you purchased a new car between 2021 and 2023.
If you’re one of those buyers who falls into the category mentioned above and you’re also the type of person who feels better about your personal suffering by making it seem proportionally smaller in comparison to someone else’s tragedy, then today’s news of Fisker searching out bankruptcy lawyers is worth a read.
Tesla, too, isn’t looking great after another analyst essentially downgraded the company with some fairly harsh words. Unsurprisingly, Volkswagen is looking at the above and starting to think that, hey, maybe it wouldn’t be bad if the company brought a PHEV to the United States.
It’s 5:00 AM in New York so maybe I’ll have a real shot at getting this up in the actual morning again today.
More Than 20% Of New Vehicle Sales With A Trade-In Had Negative Equity Last Quarter
I’ve talked about this before, but there’s a specific vintage of loans made from 2021 to early 2023 that are extremely problematic to hold. These are held by buyers who, for whatever reason, really wanted or needed a car during the height of the pandemic. Due to shortages (and trimflation) the lack of supply meant that prices reached record levels, with consumers paying above MSRP and ADM (additional dealer markup) on regular vehicles. Even worse, the low-interest rates at the time made it easier to get a lower car payment without a big downpayment.
This means that there are buyers out there who put only a little money down on a car that was priced at historically high levels. If car prices stayed high forever then, in theory, the value of a 1- or 2-year-old car would remain fairly high and, therefore, those buyers could trade them in on something newer and do alright.
Unfortunately for them, these buyers chose the absolute worst timing. They bought a vehicle when supply was low, prices were high, incentives were mostly non-existent, and interest rates on new cars were Flo Rida (which is to say low). Now, due to both automotive supply rising and a reaction to inflation caused by all of the above, prices of new cars are dropping, and interest rates are going back up again.
This means that someone who owns one of these cars is quite likely to be underwater because a two-year-old Jeep Grand Cherokee, for instance, commands a far lower price when a new one can be had with mega incentives.
Edmunds has all of this broken down in its 2023 Q4 Used Vehicle Report, which shows a lot of potential good news for someone in the market for a used car, and a lot of bad news for someone who bought a new car a couple of years ago.
“A storm is brewing in the used market as incentives and inventory continue to trickle back into the new vehicle market,” said Ivan Drury, Edmunds’ director of insights. “With demand for near-new vehicles on the decline, used car values are depreciating similarly to the way they did before the pandemic, and negative equity is rearing its ugly head.”
The numbers are pretty bleak. About 20.4% of trade-ins on new cars have negative equity, up from just 14.9% in Q4 of 2021. The amount is also up a lot, hitting a record $6,064, compared to $4,143 at the end of 2021.
As you can see in the charts above, the share of trade-ins with negative equity was higher in the quarters leading up to the pandemic, but the amount of negative equity was lower.
If you’re one of these vehicle owners there’s a good solution: Don’t trade in your car. There’s not a lot you can do about the near-term high availability of cars, but trying to trade in to buy something else to lower your payment means you could be facing both a negative amount of money owed on a car and higher interest rates if you’re financing.
Of course, if you’re super wealthy maybe you don’t care. For everyone else, the best action is probably no action.
Fisker Has $500 Million In Unsold Cars
It’s not looking great for electric automaker Fisker. I wrote previously about how a bad review from Marquees Brownlee was being parroted and recast on the web in a way that was detrimental to the company, with many people stating that he destroyed the company.
Well, it’s only getting worse, at least according to a new report from The Wall Street Journal that says Fisker’s looking for a firm to help it through a potential bankruptcy.
Electric-vehicle startup Fisker has hired restructuring advisers to assist with a possible bankruptcy filing, according to people familiar with the matter.
Fisker, which recently warned that it risked running out of cash this year, hired financial adviser FTI Consulting and the law firm Davis Polk to work on a potential filing, the people said. The car company reported last month that it had $273 million in sales last year and more than $1 billion in debt.
Those are not great signs and, while the review didn’t help, it does seem like major structural problems were already in place. Also, from the report, it seems like there are a bunch of unsold Fisker Oceans out there:
Employees have been working to unload the nearly 5,000 vehicles it has in stock, which are worth roughly $500 million, according to the company. Fisker has said it wanted to sell all the vehicles by the end of March, in part by signing up new franchise dealerships.
The obvious conundrum here is that Fisker could potentially raise cash and avoid bankruptcy by selling these cars, but the threat of bankruptcy only makes it harder to do so as people are wary of buying a car from a brand that they don’t think will exist to support the vehicle.
Wall Street Analyst: Tesla Is A ‘Growth Company With No Growth’
Wells Fargo analyst Colin Langan sent a note to clients on Wednesday telling them that Tesla stock doesn’t look great this year in light of slower sales and lower prices. This sent Tesla stock down a further 4.5% yesterday, adding to the stock’s poor performance this year (down 32% year-to-date).
Here are some highlights, via Bloomberg:
Elon Musk’s company is a “growth company with no growth,” Langan wrote. He highlighted that sales volumes rose only 3% in the second half of 2023 from the first half, while prices fell 5%.
And:
Even after the decline, the stock still trades at 55 times its forward earnings, compared to the average of about 31 for the Bloomberg Magnificent 7 Price Return Index.
“While an EV and battery technology leader, Tesla screens poorly relative to Mag 7 peers,” Wells Fargo’s Langan said, noting the valuation discrepancy. The analyst lowered his 2024 profit estimate for the company to $2 a share from $2.40. That compares to analysts’ average expectation of $3.03 a share for the year, according to data compiled by Bloomberg.
I’ve always thought Tesla was a super valuable company, but in light of everything else, it’s hard to square why it should be worth so much more relative to, say, Google, given that nothing Tesla did wasn’t going to inevitably be repeated by other automakers. [Ed Note: With varying degrees of success. -DT].
VW: Ok, Maybe We’ll Do A Hybrid
Volkswagen is one of those automakers in the United States that had some early hybrids and then decided to ditch them for a quick switch to electric cars. It was an interesting gambit, but it hasn’t entirely panned out for those automakers. VW, in particular, is now reconsidering bringing a hybrid to the United States.
Volkswagen Group of America CEO Pablo Di Si said EV sales were pretty strong throughout 2023 until November and December, when demand started to slow.
“We’re not questioning the future,” Di Si said on the sidelines of VW Group’s annual media conference here on Wednesday. “The future is e-mobility. It’s just a transition time.”
But…
He pointed to the Tiguan plug-in hybrid that recently launched in Europe. The crossover has migrated to an updated version VW Group’s MQB platform and has an electric range of up to 62 miles.
“We have the basis, we’re just trying to figure out how, when, how to homologate and how to localize,” Di Si said.
While that isn’t an explicit endorsement of bringing the Tiguan PHEV here, it does sound like an idea that makes sense to them. If it were me, and it’s not, I’d do a PHEV Atlas.
What I’m Listening To While Writing TMD
I’m listening to Liverpool’s greatest band, Echo & The Bunnymen.
The Big Question
What would you do with 5,000 Fisker Oceans?
I honestly don’t remember. What hybrids did VW previously sell in NA? I could think of a few Porsche models, but otherwise I’m coming up blank.
There was a hybrid Jetta available, at least here in Canada. One of my friends has one, and she adores it; it’s the right blend of comfortable, reliable enough, and fuel efficient that it meets her commuting needs pretty well.
The Jetta Hybrid and the A3 eTron, which was great! It was a GTI with Audi fixins, PHEV power, the same torque as the GTI, and an extra 200lbs.
Nothing Google/Alphabet does is particularly unique either. Google is just an ad company (seriously, search for how does Google make their money on Google, and it helpfully tells you that), the vast majority of their revenue comes from selling ads, and essentially all of their products are data mines that enable them to sell better, more targeted ads. The same is true for Meta and many other tech companies. Even the use of “tech” to describe these companies (yes I know it was just some wall street wanker inventing a market segment) bugs the hell out of me- a great deal of Silicon Valley has nothing whatsoever to do with technology development, they just sell ads, using ever increasingly creepy violations of privacy to do it. Apple sells it’s (outsourced) luxury gadgets for princely sums, and Microsoft charges similar amounts for software and cloud computing, so they have somewhat conventional business models that aren’t ephemeral consumer attention minutes, but if you could convince ~50% of internet users to run VPNs and ad blockers the revenue stream of Google, Meta, and their ad-driven peers would vaporize overnight.
Tesla, for all it’s failings at least builds actual hardware and does actual technology development. Is it overvalued? In current contexts, yes. But in current contexts I would argue virtually all “tech” stocks are incredibly, ludicrously overvalued compared to the the boring industrials that produce and develop actual technology we use every day.
Maybe, but you know what those boring industrials are all doing these days? Buying tech to improve their operations (whether that’s actually working or not is a whole other discussion). In a lot of ways the tech industry is the fabled store selling shovels during the gold rush. They’re selling tools that other companies use to deliver products. It doesn’t matter how much money those other companies do or do not make, the tech company already got paid.
It depends entirely what you mean by “tech”. Buying steam turbines or MRI machines is one kind of tech, but usually people mean subscribing to some consultant-shilled SaaS bundle. The only outside vendor “software solutions” I have ever run into that were better than internally developed alternatives are CAD suites and the good payment rails. Everything else, from Salesforce to frigging AWS has been a downgrade that cost money and was a pointless distraction.
> In a lot of ways the tech industry is the fabled store selling shovels during the gold rush.
Very much disagree. Shovels are durable commodity-level goods that everyone understands. To the extent that would be true for any software, its the really boring truly platform level stuff like frigging MS Office.
Like I said, I’m not even going to argue that they should be buying tech, just that they are. As long as the person signing the check thinks it’s a good idea it doesn’t really matter whether it is.
And if software isn’t a durable good, so much the better if you’re a tech company. Now you get to sell AI-powered shovel subscriptions! 😉
I bought my ’21 Mustang convertible a few days after Christmas and feel like I got a great deal. MSRP ~$50K new and in ’21 it was selling for way above MSRP, with what the mechanic said was the cleanest pre-purchase inspection he’s ever seen for $21,000 (he said he couldn’t find so much as a single bolt that wasn’t installed by Ford at the factory), plus I got $3,000 for my 2005 BMW 325ci trade in that is almost certainly going to be sold for scrap and needs $4000 in suspension work. 59,000 miles at the time and the extended warranty is only another $2500 for the next 60k. I feel pretty great about that. I even got a decent rate from my local credit union.
Please don’t ban my Mustang from your cars and coffee events, I promise I’m there to check out the really cool cars and not expecting anyone to swoon over my 300hp entry level non-Miata sports car.
> he couldn’t find so much as a single bolt that wasn’t installed by Ford at the factory
And yet he gave a positive inspection!
https://www.motorauthority.com/news/1142511_one-of-mercedes-first-cars-just-sold-for-12m-at-auction
I keep seeing this headline pop up on my Google News feed and keep imagining that one of Mercedes Streeter’s first cars sold for a massive amount to a fan. Which would be awesome.
I don’t have a huge amount of sympathy for this, my employer forced me to buy a new car in 2022 because my 2014 Camaro didn’t comply with our corporate mileage reimbursement rules, I shopped 7 dealers in 4 states before I found one that wasn’t marking up above MSRP and had the lower trim level I wanted that barely met the company’s cost requirement without going way over it. Could have made the process easier by just paying a markup or buying a more loaded vehicle, but I wasn’t doing that.
If you’re underwater on a loan and don’t have the cash to pay it off, the answer is you just can’t buy a new car right now, you have to keep the one you have until either it’s paid off OR you get the loan balance low enough that you finally have some equity again. Oh well, the earliest cars purchased during the pandemic are, at most, what, 4 years old now? Modern cars last a hell of a lot longer than that, stick with what you’ve got until you can afford to replace it, that’s the solution. Unless your employer has the same rules mine does, you’re probably not being forced to buy a new car right this minute
I suspect that some of the ones that are underwater were purchased used (which was a really poor choice if you could avoid it, since used was going for more than new in many cases). I do have a lot of sympathy for the person who needed reliable transportation and ended up at the BHPH lots due to lack of credit history or something, then unwittingly got a junker. That’s a small percentage, sure, but I do feel like some people at the low end of the market got really screwed.
And, unfortunately, some of what screwed them was that people who could have waited decided to buy anyway and were willing to pay far too much.
What is the policy? That sounds nuts. How can an employer dictate what it’s employee drive? (Unless it’s Uber/Lyft or some other livery service requirements.)
If they are so concerned with what you are driving, why do they not issue you a company car if your job requires driving? So not only do you have to use your own car, but you also have to spend YOUR money and go into dept in order to meet THEIR requirements? F that.
Or offer a fixed per mile reimbursement, and it’s up to you to decide if you want a cheap car where you’ll make some profit on it, or a more expensive one where you might have to chip in a bit.
That would be ideal, but we get a combo of a fixed monthly payment + a smaller per mile stipend, between the two, it averages out to maybe 55-60 cents per mile, but the more you drive per month, the lower the per mile reimbursement, since the fixed lump sum is such a high percentage of the total. I’ve had some months as low as 30 cents per mile.
Isn’t it the law that you need to be reimbursed the IRS’s standard amount? My work just updated ours, it’s now 67 cents/mile for 2024.
Your company’s policy seems so screwy to me. It must be a damn good job otherwise to put up with that nonsense.
That is certainly not the law, many companies do it, but AFAIK there’s no law saying they need to reimburse you at all. My company pays a flat 60 cents (up from 50 last year at least).
The IRS deduction rate is for self-employed/businesses where the vehicle is used in the course of that business.
I don’t think it’s required, I believe that’s just how much you CAN be reimbursed before the IRS starts counting it as taxable income.
Believe me, if I had known all this, I might well not have taken my job. At the interview, it was explained that this was just an alternative, optional compensation program you could opt into, but you could opt out and just receive straight IRS per mile reimbursement instead. After a few months on the job, I found that no, it was not optional for salaried positions and was pressured into getting into compliance with the program. Evidently, some of my peers had complained anynomously that my 7 year old Chevy coupe was clearly not in compliance and why was I being allowed to opt out when they were being required to drive new SUVs and pickups. My boss didn’t have a full understanding of how it all worked at time of hiring and was surprised when I was forced into it because he had thought it was optional, but hadn’t been given all the documents that explained it
That is so screwed up, I HATE corporate BS like this. Also, your coworkers suck for narcing on you.
I’m not asking who you work for, but re you in some sort of sales position where they’re trying to project a certain image?
I’m in sales, but it’s building materials, I very rarely transport clients, if ever, and don’t carry more product than maybe some small bags or buckets of samples. I visit concrete casting plants, construction sites, golf courses, etc, but typically park in the general parking lots or staging areas and walk in, nobody is seeing what I drive up in
In that case I find it completely absurd that there are vehicular requirements.
I had a cycling acquaintance that was in sales of groundskeeping supplies to golf courses, he was provided with a new company truck every few years. Last one I saw was a new crewcab F150 4×4.
I bet if your company bought a fleet of hybrids (or EV’s) for company cars, they’d get a bunch of tax credits and write-offs that would pretty much cover the cost, along with the marketing optics that they are being “eco friendly”. I’m sure they’re much happier transferring that cost to the employees though,
Probably. Also, I’m the only one on staff with a car instead of a big pickup or SUV, and also the only one with a hybrid. There’s been a few pre-meeting conversations where I’ve overheard people bitching to each other about gas prices and how much it’s costing to fill their tank and how the reimbursement doesn’t cover the monthly payment on their loan, let alone fuel. Just have to quietly think to myself, no shit, you don’t need a $70,000 truck to drive around calling on customers, nobody told you to buy that. Most of them have never put anything in the bed aside from a cooler and have never even put a ball mount in the receiver, if even equipped
Paul and Ringo enter the chat…
Ah, VW may be the bright ones in the PHEV class. 62 miles of range is very, very useful!
For those that are underwater on your vehicles, that really stinks. I had some seriously bad money management skills when I was younger and learned about negative equity the hard way.
Time, patience, discipline, and budgeting are the key to getting out of that situation. Paying ahead on your loan helps too. If you can do it, you’ll pull yourself out of that place sooner than later. If not, and you have decent credit, see if a refi is possible, without extending the term. That last part is key. A cheaper payment won’t get you to the positive side of equity any time soon.
And if you need (not want, need) a replacement car, for the love of all things automotive, consider a CPO. The deals are good and the warranty is essentially like a new car. You avoid the depreciation and, if you can swing some down payment, may stay positive in equity throughout ownership.
Hang in there!
I too learned about money the hard way. For me it was the cars and the credit cards. The key is to stop spending. Keep the car you have if possible. Maintenance and repairs are much more affordable than a new car, especially when you’re upside down on the one you have. Pay ahead on the highest interest rate debt first (with the caveat that paying off a small balance can help you shift funds to more expensive balances). Everyone wants to drive a nice new car and have nice new things, but experience has taught me that they are much more enjoyable when they don’t make you poor.
“Maintenance and repairs are much more affordable than a new car.” – the good sense reflected in your comment tells me you’ve been spared the experience of an old BMW.
Well, you’re right. But I bet repairs and maintenance on an old BMW are cheaper than a new BMW. I could be wrong.
This is true, but by a much thinner margin than you’d expect. I was up to the equivalent of $500/mo on mine (2005), the new model has a payment of like $800 and would save me about $80/mo on gas and insurance. If you include 40-50% of the value of the car when I resell it in maybe 5 years I’d come out ahead. To be fair if I was better at doing my own wrenching all this math would be different.
When a car is EoL, that isn’t necessarily true. My ex was paying more keeping an old car on the road than I was for my new car (and that doesn’t factor the mental cost of having an unreliable car and the increased financial management difficulty of the unknown, inconsistent costs). Sure, I had a lower end new car, so not a direct replacement of a Maxima, but at that level, the point of the car’s existence is just in being a reliable daily. That’s how a lot of people get stuck—they can’t save up to get something better that would actually save them money because the old shitbox costs too much to keep on the road for them to save up and they can’t survive financially without a car, either. Usually, these problems go hand-in-hand with poor credit they can have difficulty building up, so that also makes a loan further out of reach via higher interest rates if they can even qualify. Lucky for her, she had me. Not as lucky for me, I suppose, but, eh, I gotta be good for something.
I agree with you, when a car reaches the point that it’s end of life, you’re right. A car that isn’t reliable enough to get you to work or school everyday without potentially leaving you stranded is a great argument for getting something better. If, however, it’s a 4 year old car that’s just gone out of warrantee, it’s probably better to keep it rather than rolling the negative equity into something newer. And of course there are almost always exceptions to everything.
Definitely. Four years old isn’t really old unless someone is doing some real serious mileage (which it probably doesn’t mind as fast-built miles are easy) or it’s been in a war zone.
I thought my beater (’02 Focus Wagon) was EoL 18 months ago, after having moved house for me. I wasn’t going to spend any more to replace the rear control arms but donate it for a tax write-off. Then, my mother was coming to visit and wanted to borrow it, so I went ahead and fixed it after all.
She decided to do a road trip and drove it from NYC to Nova Scotia with a friend; the thing still works for now. Old cars are funny like that, but I don’t think the gods would let that happen to anyone who actually desperately needed their old car to work.
I think the commonly accepted idea is it’s just a constant, steadily increasing need for repairs and maybe looming major problems (rust, say) that signals the EoL where a car either needs to be fully restored or junked, not just a couple things that are the consequence of being old in general. Sometimes the machine just “feels” done. My Mazda3 was like that. It only had 167k miles and 5 years on it, and though rust was starting and the suspension was (fairly reasonably) worn, the car just felt like it had enough, like there was an impending end-of-Blues-Brothers moment for some reason. Replaced it with a ’12 Focus (5MT) and that still felt like it had plenty of like in it at over 200k when it was totaled—same platform.
Fisker recently sent me an email letting me know they’re knocking $7500 off any in-stock Ocean One or Extreme. If we generously assume they could sell all of them at an average price of $60k (which assumes the highest trim with options is a lot more common than the slightly lower trim), they could get $300M for 5000 cars. Really seems like they are doing some generous rounding regarding the value of their vehicles, unless they are also counting significant money coming from selling their name to these franchises.
Gonna be really hard to sell a $60k car to people who know your company is looking down the barrel of a bankruptcy. Even if they miraculously manage to make $500M, they’re still looking at a rough road ahead, so buyers are right to be hesitant.
Had the same thought. Looking through their available inventory on the website and I don’t see a vehicle higher than about $72k. Not sure where they are getting the extra $150M+ in valuation.
I seem to remember a band from Liverpool that was better than Echo & the Bunnymen.
What a coincidence, A Flock of Seagulls came on just as I was reading your comment.
I can think of 3 or 4!
Hey, here’s an idea if you’re underwater on a car loan. KEEP THE CAR! Just suck it up and don’t buy another car. Most of you don’t actually need a new one. It’s so much cheaper to repair and maintain the thing you already own, than it is to buy another one.
I wholeheartedly believe in buying new cars. The last two I bought I’ve now owned for 18 and 9 years, and neither one of them will be leaving my fleet anytime soon.
Couldn’t agree more with the first paragraph.
The average age of a car on US roads is over 12 years. People trading in 3-year-old cars for new cars get zero sympathy from me. While I do have some sympathy for those who need a vehicle and are in a lower economic tier, that doesn’t describe anybody buying new in 2021 or trading in for a new car in 2024.
I would not say a new car 18 years ago, or 9 years ago, is especially comparable to a new car in 2024.
What’s your point? When you buy a new car, maintain it well, pay it off, and keep it long after it’s paid off. It does not matter when you do that.
Most 2024 model year cars I would not want to keep much longer than the warranty period. I think longevity is the lowest it’s been in decades.
Gotcha. I think that depends on what you buy, but if you’re taking a long loan out these days, you should definitely get an extended warranty long enough to match the length of the loan IMO.
I worked in the bankruptcy industry and you would be surprised how many people don’t follow that advice, this was in 2016 and would have people owing 30k on a 3 year old Versa
My dumbass little brother did this. I didn’t even know it was a thing, but he rolled forward a loan on a Tribute into a piece of shit clapped out Tiburon into a piece of shit new Dart. He owed at least $40k on it before he’d driven it a mile.
Yep they will roll one into another and only care about the payment, huge amortizations, balloon payments and double digit interest rates were common then. I worked in lending before so I felt I had to atone for my sins
YIPES
The issue for a lot of people is they don’t have a spare penny at the end of the month. Budgeting for a new under warranty car is preferable since it’s a fixed cost instead of a highly variable one. And indy mechanics often don’t have the perks of the dealer like loaner vehicles, a shuttle or a space conducive to remote work. Having the space, tools, parts access and most importantly time to DIY car repair is a luxury a lot of folks don’t have. An older car will inevitably start needing major to most people systems at some point that are expensive at shop rates. Riding it out can be emotionally tough when it’s the third $500 in parts and Saturday long repair done in a few months.
Just explaining the logic.
If you’re that tight, then buy an extended warranty the length of the loan. Stick and stay, and make it pay.
“If you can’t afford something, spend more money” isn’t super practical
Have to be careful on what is being purchased. The OEM warranties are generally okay. The aftermarket ones are generally a ripoff. What the OEM warranty covers depends on the OEM. Some really are extended B2B warranties while others are far more limited.
100% this. I would only buy an OEM warranty. I’ve never had an issue with them.
Actually, it is. Often they can be had fairly cheaply when buying the car, and rolled into the loan for a minimal increase in the payment. Plan ahead, so you don’t get fucked by having payments and repair bills at the same time.
I bought one of the last Honda Fits right before the pandemic (literally late Feb 2020) and I still think of it as “the new car”.
If we stop buying when they start gouging, they’ll stop gouging. I feel sorry for anyone who needed a car in this time period, but if you didn’t need one but bought one anyway, just because you wanted it, then this is what you deserve.
“now find yourself underwater on your loan for market reasons beyond your control”
Yeah completely wrong, it was in their control, it’s called financial responsibility. Most of these people probably always have negative equity, why so many dealers for decades advertise we will pay off your trade no matter what. Paying ADM’s and inflated prices especially on used cars during the pandemic was in their control. Even with the harder hit on negative equity, most will never learn.
For some reason (profit, I’m sure) trade-in values are significantly lower than the retail value of the same car. I’m all for a dealer making a profit on a trade, but my buddy recently got $5k trade-in on his Jetta, and 2 days later it was on the dealer’s website for $12,999, and that seems like a really wide gap.
Dealers give awful money for trade ins because they can. It’s a convenience thing, if somebody is too lazy to sell it themselves the dealer is happy to take advantage of that. It’s the same reason the gas station can successfully charge 2x as much for a mountain dew as the Walmart across the street does.
It is also an offsetting sales tax advantage thing. Especially on expensive cars, that can almost make up for the beating you take on the trade in.
Trade-in value reflects that time=money. A trade-in is almost always the fastest, most headache free way to get out of an old car and into a new one, and you are dealing with someone who you can be reasonably certain isn’t going to just flat out scam you with a fake check or something. That convenience has a dollar value, and you negotiate it at the same time as you negotiate the price of the car you’re buying.
The solution to getting bent over by a dealer is to educate yourself. Know what your trade-in is worth, make an allowance for a dealer profit and know how much you want to spend out the door. The rest is high school level math. Don’t let emotions rule. It is business, not personal.
You shop around for a new car, do a little of that with the car you are selling. Get quotes from car buying services, factor the tax differences and then decide whether you trade in with the dealer or a buying service.
I traded in a WRX for $20k. A few days later they had it listed for $25K. They made a big deal about having to take off some mods and reinstalling the factory stereo. I told them I’d put the stock HU back in if it was such a big deal and they said they’d have to redo the install to factory spec (this was an Audi dealership), so for me to leave the mid level Kenwood unit in place. Wouldn’t affect the trade in price. All bs negotiating talk. I reinstalled the factory HU anyway before dropping it off the next day. Left the speakers and amp in the car. Everything worked just fine. They called a few days later asking for the Kenwood, but I reminded them that they said it wouldn’t make a difference and asked whether they had rewired the Subaru HU to factory spec yet.
A few weeks later a buddy popped into the dealer and looked at the car. All the mods were still there. No surprise.
Five weeks later it was priced at $21.5K before disappearing from their inventory. Assuming they sold it for $21.5K, that was a fair market price. Maybe it went to auction. Whatever.
Better in most cases to get a valuation or work a deal with CarMax or similar outfit before considering a dealer trade. Or, sell it yourself if you like, and have the time to do so. Compare that to Blue and Black Book values as well to confirm what it’s worth.
It is crucial to know the independently assessed value of that asset before visiting any dealer.
Why? Helps avoid leaving thousands on the table of a proposed trade, and it provides more control of the purchase price with a down payment vs made up numbers from the used car flunkies on staff.
Always be honest about the condition of your vehicle when using an assessment tool. If it’s dinged up, it isn’t in Excellent condition. An appraiser will sniff out misstated vehicle condition quickly when claiming a purchase offer, if one goes the CarMax or similar route.
+1 to CarMax/other outlet. I know multiple people that went to both them and to Carvana for a trade value, and ultimately ended up selling to them when the dealer couldn’t match it. It was enough to offset any extra sales tax from not trading in at the purchase of the new vehicle and then some.
My 2021 truck seems to be holding it’s value better than expected, but I think that’s partly because the price of the same 2024 model with the same equipment is nearly $10,000 more. I also took a 5 year loan at 1.75 percent so it’s over halfway paid for. I’ll keep it for at least 8-10 years though, because I want no payments again for a while. Our 330e seems to have dropped in value a lot in the last year though, but we bought that used so it already was 1/3 off the MSRP when we got it. Again, a 5 year loan and throwing so extra at it has kept me out of negative equity land. I don’t even like to do a 5 year loan on a used 2.5 year old car, but the interest rate was the same and I figured I would just throw extra at it to pay it off early.
That percentage of negative equity trades is concerning for sure, because it means negative equity repo’s are going to be rising too.
Are 5,000 Fiskers really worth $100,000 each? Maths.
It’s the same math your employer does with how much YOU cost to them. They take into account how much THEY pay for health care, computers, bagels, paper, printer ink, etc… to keep you employed. I only take home $100k, but I cost them $125k.
The Q50 is the perfect title card picture for that headline. The definition of Big Altima Energy but at a higher entry price, even steeper depreciation, and dealers more eager to screw over an uneducated customer than a rural Buy-Here Pay-Here lot.
Every single Q50 <5 years old I have seen for sale is either 1: Clapped out, 2: At a BHPH lot, or 3: Being sold without a title or with realllllly shady conditions
Hey, Pablo, what does “e-mobility” mean?
In real terms, what does it mean to be e-mobile? Is it a like a teleporter? Can you compress yourself for transmission over RF or copper wire? What’s the information density on being e-mobile, what protocol do you use, how does it handle packet loss – or are there even packets?
Oh, it doesn’t *actually* mean anything at all? Please remember that explanations with the word “lifestyle” in them are known-meaningless and will be discarded. No? Then stop saying it.
Now if you’ll excuse me, it’s a beautiful early spring day for yelling at clouds.
Given the context, it’s “electric mobility,” or vehicles of various shapes and sizes that are powered by electricity. Sure, for digital communications and such, the “e” is generally “electronic,” but in the context of vehicles, we’ve come to use it as “electric.”
We can talk about overuse of these kinds of buzzwords, but it does seem to have a meaning, even if VW isn’t likely to jump into e-bikes, powered wheelchairs, or the like. Is it dumb? Sure. Overly broad? Absolutely. But asking for a definition isn’t a gotcha.
No, it isn’t intrinsically a gotcha, because there is some crystal of an idea down inside the buzzword miasma. But it still doesn’t mean much. “e” is a handwavey “electricity or electronics are involved, probably we guess.” It’s like “my” (e.g., MyAudi, My Computer, etc”) – a useless appendage that’s either so semantically bleached or so ill defined in the first place (or both, it can be both) that, like entries in an infinite dictionary, you can strike the first letter/prefix/arbitrary string and still have the same information, so why say it at all?
My post was really digging into that – it means nothing, it’s saying nothing, so tell corporate parrot, what *are* you saying when you say “e-mobility?”
“E-mobility” is such a precious buzzwordy way to say “EV.”
“Well you see, it means STOCK PRICE GIMME THAT STOCK PRICE BUYBUYBUY NOWNOWNOW BUYITJUSTBUYIT GOTTA PUMP PUMP PUMP SO I DUMPDUMPDUMP BUYIT BUYTHESTOCK NOWNOWNOW RIGHTNOW BUY THE STOCK PAY MOREMOREMORE FOR MY STOCKS”
HODL
E-mobility could also be referring to vehicles that are either partially or fully subscription based (short term lease). The zip-car rentals come to mind.
We’d be first in line for a PHEV Tiguan that got ~40 Miles electric on the EPA cycle. Finding a family sized PHEV that’s not
sure is tough.
There’s the Escape PHEV (the powertrain is good but the rest of the car is kinda mediocre)
True. Could have used an “isn’t good” bullet too 🙂
RAV4 Prime supply seems to have finally exceeded demand in my area. I’ve seen a few advertised at a modest discount. Unfortunately we’re replacing the larger car first or else I’d consider one.
That tune, great on its own, became even better when featured in the wonderful Donnie Darko. An all-time great soundtrack.
Great movie, one of my all-time favorites. Sadly, I think it was one of those hidden gems that, along with the also excellent Mulholland Drive, didn’t get nearly enough attention due to being released a month after the 9/11 attack.
Mulholland Drive broke my brain.
Me too. Back in the day, the DVD came with a list of questions that (might, in typical Lynchian fashion, no guarantees) help you figure it out.
I had completely forgotten about that. Yeah, I’ve watched the movie maybe a dozen times and gave up on figuring it out based on those questions. I finally just created my own theory and let my brain hybernate for a while.
Ha – I did exactly the same! Which then served me well with Tenet, which I also love but had a hard time sorting completely out.
I just don’t understand people who trade in cars they haven’t paid off. It just seems like wasteful consumerism. Why do you _need_ a new car if the one you have is only a few years old?
It’s your right to get one… but don’t expect me to be sympathetic if you are whining about payments.
I think it’s easier to rationalize when you’re already in a rhythm with a car payment, and term lengths mean you’re in that rhythm for longer periods of time. Add to that, you’re more likely to have even routine maintenance and repair costs on top of that payment, and if you’re already paying even just 300-400 monthly, throwing a couple times that for tires on top of that might feel scarier than just getting something new where that won’t be an issue for another few years, even if it’s just kicking the can down the road.
Which is why leases exist, which makes it all the more staggering to me that people continue to overextend and repeatedly roll negative equity over on a 24-36 month basis.
A lease makes more sense for many people the way they do end up buying cars, I agree, also as getstoney said below too. I think the mileage restriction is what spooks people on leases still, and perhaps concerns over getting hit with fees for dings and such. Even if they’re unlikely to ever get to the point where it matters in the point of their purchase term, and if you’re staying in the same brand they’ll likely be more forgiving because the OEM is going to try and retain you, an in-market shopper, at lease end.
But it’s hard to see that far ahead in to the future too. My last car was a lease and the tires were just a tick above the minimum tread requirement at turn-in with 36k miles, so that worked out well for me, but things could have changed during that term. I needed new tires even sooner on the car I bought after (not lease, still own), but I also expected it would need tires before the loan term was up anyway, and I had factory warranty beyond the loan term too for peace of mind in non-maintenance items.
That’s a good point, some people swap cars so often they never even hit the end of lease term which is absolutely mind boggling to me. I’ve had my CX-30 Turbo about 16 months and 11.5k miles now after buying it new and it still feels like a brand new car I can’t see getting rid of for at least a few more years. And the Golf Sportwagen I had prior I had for 4.5 years and nearly 60k miles, and was only dumping it because of VW reliability concerns.
My fun/project cars tend to come and go as I please, but they’re never even close to new or modern, and they’re only ever bought outright in cash, and yet people who do the perpetual trade-in on new cars while rolling negative equity have tried to call me irresponsible with my money. If I’m selling a car, it’ll be paid off in full, every time, no exceptions.
My Outback has been payed off for 4 years (It’s a 2016). I certainly don’t have “regular maintenance costs” of 300-400 a month. And my last set of tires wasn’t “several times that”.
Again… people are perfectly entitled to do this. But I don’t respect the decision if it’s not something they can responsibly afford.
The 300-400 was not a maintenance cost, it was a payment example, and is actually well on the low side compared to averages now. I said a couple times that (not several) as a set of Michelins from Costco were over $600 for me 4 years ago, probably over $700. You could argue that’s on the high side, but it is also a tire I expected to last me a while, whereas someone in these hypothetical financial situations might be as likely to get an off-brand tire for <$100 from a shop down the street which isn’t an ideal long-term decision either. But I threw a set of $100 Hankooks on a base Civic LX on Discount Tire and even that was well over $500 with foregoing the tire protection.
But not having had a payment in 4 years, the example doesn’t really apply to you – or me, having paid off my 2018 GTI last year, so I’m in the same boat as you. I’m not excusing it, but I get the rationale: if you’re already used to the money being deducted from your account, it doesn’t seem so different, it’s another expense (I won’t call it a budget because that implies any of it was really planned for). And this is all using conservatively better case examples – assuming no unscheduled repairs or damages.
I’m with you and have a hard time wrapping my head around it. The only instance I think it would make even a modicum of sense is if someone bought, say, a Dodge Hornet that was an absolute lemon and cost more from a lost time perspective with it in the shop constantly.
Or a new baby on the way makes your current car impractical . . . but yeah other than in a few scenarios anyone trading their car is scoring is an own-goal.
Combine financial illiteracy with “want” overriding “need” and this is what you get.
In my (limited) experience, it’s a change in lifestyle. New job, new kids, new hobby, whatever it is, it either enables or necessitates an upgrade. An increase of income can lead someone to seek out a better car, I had a friend who traded in a Veloster Turbo for an RS5 with negative equity because he found himself able to afford his dream car (more on that later), and another who did almost the exact same thing going from a Tahoe to an M4 Competition. I don’t share their financial bravery, but they made their decisions based on passion.
On the less exciting note, someone could make such a trade-in after underestimating the cost of a car, trading in negative to minimize the payment they thought they could swing. For example, I had a friend who had to trade in his RS5 under negative equity for a cheaper E350 because he found out he couldn’t actually afford the maintenance and insurance after the payments.
And last but not least, on the actually responsible side of things, there’s the trade-in for a lifestyle change. Maybe you have a child on the way, your commute gets longer, or you inherit a farm that needs tending to. In such a case you might need something with more space, fuel economy/comfort, or utility, and you would need it right away.
Of course, negative equity isn’t optimal, but it’s not the end of the world or even particularly irresponsible unless you make a habit of it.
Lifestyle changes like having kids is understandable. But that clearly isn’t the case for _many_ people… who simply “want” a new car.
You’re not wrong, I was just addressing the question in the original comment you posted. I’m not saying all or even most negative equity trades are reasonable or responsible (see above the RS5 tragedy), just that there are scenarios where it can happen outside of just vapid consumerism (which still accounts for a lot of… well, everything).
As Bender said, “The batteries in this remote are dying. We need a new TV”.
My employer requires employees to buy a new personal vehicle every 4 years and mandates that it cost at least $35,000, sometimes there’s a balance left, you write a check for a few grand and pay it off at trade-in time so you don’t roll equity
Leases aren’t practical, even so-called “high mileage” leases aren’t going to cover 30,000-40,000 miles per year, and you can’t stop going to work because you hit your mileage cap
I can’t even begin to fathom this. I don’t believe I have the proper personality to work in a place that would try and make requirements around my personal life. I have to assume you make a pretty fair amount of money to shrug off dropping a check for a few grand to avoid rolling equity. If an employer wants me to drive something pretty, that employer better be increasing my pay that cost or buying it for me.
More like, when you know the replacement deadline is coming, you have to plan on using that year’s bonus as the down-payment/loan payoff instead of building that new home addition you wanted or what have you
So… I’m going to guess that if your employer _makes_ you do this… you write this off as a work expense on your taxes.
A tax write off doesn’t recoup the losses incurred though, it only reduces them.
No, I haven’t been able to figure out a way to do that. I get less than IRS reimbursement per mile, too, but seems like you need to be active military or a circus performer to deduct that? Maybe I should start using an accountant
If it’s required for your work and you aren’t reimbursed for it… it should be a deductible expense. Talk to an accountant.
I find the idea of an employer doing this absurd. I understand there are jobs where people drive clients around… and images are important. But would your employer really have a problem with you showing up in a classic Porsche?
Yes, a classic Porsche would be too old and have too few doors (policy requires at least 4 on a passenger car or SUV, though single cab pickup trucks are permitted).
I mean, you can show up in it, I’ve driven my ’64 Corvair to work and client meetings on occasion, but the actual vehicle on file with the policy has to be in compliance and has to be what’s used primarily
Wouldn’t a classic Porsche be over the $35K line?
But in other news, where I work is very chill, very collegiate. I wear a beanie and a hoodie most days. My boss just barely bought a brand new Tundra. He wanted a Tacoma because the Tundra is too big, but he said he bought the Tundra because he “needed to take people from work places”. I found that super odd, because the only time I’m aware of him driving people around for work purposes is when a group goes out to lunch. And often two cars go anyway? So he bought a vehicle he didn’t prefer so he could comfortably haul one more adult on the rare occasion he needed to fit one more adult. I find that bizarre.
It has to cost at least $35k, but also can’t be over 4 years old or have less than 4 doors (unless a pickup)
Crikey mate. I hope there are other perks that make such pretention worth your time.
They have to be absolutely positive that the car driven will be completely inoffensive to even the most stuck-up customer possible. In other words, asshole-proof. That said, I don’t think it should be the employee’s problem to solve, they should have a company fleet to use for any customer calls.
Trump tax law change made it so employees can’t deduct any non-reimbursed business expenses. Plus they raised the standard deduction. Yea! Oh, but he eliminated the personal exemption so the new standard deduction is only slightly higher than the former combination of personal exemption + standard deduction. So net effect on total deduction is almost nil if you didn’t itemize, and if you used to itemize, you probably lost the ability to do so.
For what its worth, hiring a reasonably priced accountant has actually resulted in a net increase in total money I have, even after paying him. Really we only talk at tax time, but he does my taxes and answers questions that have come up during the year. But I’m talking a real CPA, not Liberty Tax. So its worth considering.
I am not an accountant at all, but I think you can write off the percentage of the vehicle that you use for work or, maybe, if you used the car exclusively for work and owned a second for personal use, you could write off the whole thing? Definitely talk to an accountant. I saved $9k the first year I went to one instead of doing it myself (went from owing $5k to getting back $4k).
Employees can’t write off any personal expenses for business thanks to Trump.
Yeah, thats total crap right there. I am definitely not the right hire for that employment. I have to give up my annual bonus to appease the powers that be so that I am pretty enough to work there? I’ll take a pay cut and drive a shit box. No one gets to define my debt load.
If I *had* to buy a vehicle that cost at least $35K every 4 years, then I would simply get a vehicle that cost just over $35K that had the lowest TCO.
So something like a higher trim Prius or a Tesla Model 3 SR+ would be at the top of my list.
That’s exactly what I did, Hyundai Ioniq Hybrid, 60mpg highway and $27,000 (in 2022, the MSRP requirement was only $25,000, they bumped it to $35k last year, I’m in sort of a grey area right now)
+1
And it’s a similar story about people who buy massive trucks and SUVs… and then complain about the cost of gas.
Example of BS: “I need a truck to tow my RV”
The truth: “You don’t really need that RV and thus, you don’t really need that truck. If you can’t afford the gas for the truck, then it’s time to sell the RV, then sell the truck and get a sensible car like a Prius instead”.
Or get a smaller, lighter RV that you can pull with a car. No matter how small your car is, there’s always options, a Smart ForTwo can pull a 300lb motorcycle camper like it isn’t even there
Did exactly that. Zero regrets. The lighter camper also happened to be better built than the heavier ones. Although it’s still a camper so the build quality is merely garbage as compared to dumpster fire.
They just want a new toy. Keep up with the Joneses. You get the idea.
Same reason why these same people fall victim to the four square sheet and only caring about monthly payments. They just want the car. If the sales guy just tells them what they want to hear, they’ll follow right along.
I’m not sure exactly why, but the general consensus around these parts seem to contain a very heavy “anti-lease” mentality. If you leased instead of bought your ride a few years ago and turned it in for a new lease now, considering that lease deals happening right now fly in the face of rates, you’d be doing much better than if you bought at either point. Also, if you leased in the cycle before with a much lower than 2021 prices buy-out, you could have at least broken even on the lease, if not made a profit.
As far as Fisker, I wouldn’t even know where to begin. They (and their investors) made their bed, and now they have to clean up their Amber Heards. Pretty shitty position to be in no matter how you look at it.
The site is anti new car in general, anti trading anything in (see thread above), pro driving the same vehicle forever, and pro being a tightwad.
All of which adds up to anti leasing I suppose.
I do think it’s right for some people depending on their preferences.
Yeah, I know. I’m not exactly new here, lol.
Anyway, preferences aside, leasing was the fiscally prudent decision then and in most cases the proper decision now. Rates aren’t gonna come down in any measurable way, at least not as predicted a few months ago, and the global challenges just aren’t gonna go “poof” either.
Without derailing the point too much, the banks/wall street got the best of both worlds. A big jump in the markets on the promise of lower rates, and the benefits of them staying high. So, leasing at a much lower/0% borrowing rate becomes much more than just a preference. It makes sense.
I do the math on available leases and loans, and a lease makes a lot of sense on a lot of vehicles, especially if you suspect they’ll depreciate quickly. And, unless it’s a Tesla, you can set yourself up to buy it after if you want it.
Right now, the money factor is low enough on a lot of them, you could definitely save if you get into the right low-cost lease and save extra money you would have put toward the payment for the buyout later.
At the height of used vehicle prices, a new lease would have probably saved most used buyers money. Those prices were wild.
Exactly. In my opinion, any car that is a daily driver should be leased. Toys and collectables are a whole other thing, but if something needs to be utilized on a daily basis, it should be considered a monthly bill like a cell phone. With few exceptions, owner a car isn’t really any cheaper when looking at the total money spent on maint/repairs over time.
So, why not have the newest/most reliable/safest version available if everything else balances out?
I spend less owning my car in a year than a lease costs in a month. What on earth are you talking about when you say “with few exceptions, owning a car isn’t really any cheaper”?
I think he’s talking about an average person with an average car, that commutes 15-20k miles a year and pays the dealer whatever they say the scheduled work will cost.
You and I can make ownership more effective because we will work on our own cars, saving heaps on service, and keep them basically forever, as well as having the knowledge to detect issues early so we don’t get stranded. But to the layperson, a car is a ticking timebomb that could leave them on the side of the road or worse as soon as an out-of-warranty repair breaks 4 figures or unexpectedly sends the car into limp mode, a fairly easy thing to happen in a modern car.
“and pays the dealer whatever they say the schedules work will cost” is the important part here. I’m pretty sure that even buying a new car and doing 0 work yourself, but servicing it at an independent shop, is still cheaper than a lease. Especially for a car under warranty that should incur 0 unexpected expenses.
The car under warranty thing, however, is half the point of a lease. You can have the car as long as it’s under warranty, and you don’t have to deal with the whole buy/sell/trade headache at the end. Again, leases aren’t for me, but for the kind of person that routinely trades in with negative equity, leases are a far more responsible and economical option.
Huh? Leases can even include oil changes, never mind anything that would be done under warranty that the OEM will pick up and the lease payment is a lot cheaper than the buy price. For a lot of people, leasing makes more sense financially than buying and are certainly less stressful to the average person than something old that can incur an unexpected cost in time, money, and inconvenience at any time. They’re not for me, but that doesn’t mean other people don’t have different situations.
I pay exactly $0 in maintenance on my leases, it’s all included. Without going into a massively detailed breakdown, consider this:
-Monthy payment is cheaper by roughly $150/month so it stays making money (I know it’s not a lot on its own, but it adds up)
-It’s always under warranty
-I never have to outlay any money down at inception.
-It just stays a line item on my budget. No surprises and if there is an issue, I get a loaner provided for free.
-Depending on timing (as already noted), the buyout can be a great deal that gets evaluated at that time to see if it is flippable.
That’s what I mean.
Provided you don’t go over the mileage, the car isn’t damaged and you don’t have kids that are going to destroy the interior.
Often times, there are early turn-in deals that are advantageous. Damage is an insurance issue.
Kids are a whole other story.
It’s the nickle and dime damage that nickels and dimes you. For instance a bunch of scratches, or broken interior parts. You’re not submitting an insurance claim for each one of these.
I’m 100% on your side here, sorry if I sounded like I was deriding people who lease.
All good. I wouldn’t care if you were. lol. I’m well aware that even mentioning the virtues of a lease is akin to talking shit to an Eagles fan in Philly, so I kind of expected the pushback.
I’ve hesitated bringing it up in the past, but today someone switched my fresh-brew coffee with Folgers Crystals, and I was feeling frisky.
I can imagine, it’s just one of those things that sounds emotionally opposed to the “connection” between car and owner. I for one would recommend a lease to anyone who wants to keep a car for less than 5 years, which is a whole lot of people.
Edit: Also, Folgers is a truly cruel thing to inflict on a person. My condolences.
https://www.youtube.com/watch?v=K_Gtb1kElRk
🙂
See my Ricardo response.
I don’t go quite that far. I think most normal people (not necessarily the typical Autopian) are better off with something still under warranty, but not necessarily swapping leases. But it can certainly be an option. I just think ruling out leases entirely means you aren’t looking at all your options. When 0% financing was everywhere, a lease wasn’t really the way to go, but you have to run the numbers these days.
My immediate emotional reaction to a lease is disgust at the idea of forming a symbiotic relationship with the parasites trying to fleece me. A good deal of other car buyers are just as unhappy with dealers as I am. If I were to look at it objectively, and look around enough to find one that isn’t scummy, it might work. I didn’t get the full time conversion I was hoping for, so I’m putting the kibosh on doing anything big money-wise this year.
The way I see it, it’s essentially a financing deal. I have leased two vehicles, one of which I still own. The lease deal on my Niro came out the same as financing, plus it allowed me to get the tax credit applied to the price, rather than waiting and claiming it at tax time. And I ended up earning interest on the money I was saving for the buyout (and then ended up financing that purchase instead, since I got a lower interest rate than my money was earning).
If you finance through the manufacturer, it’s pretty much the same relationship.
Sorry to hear about the conversion not going through. That always sucks.
If you intend to have a car payment your whole life, leases make perfect sense. Purchasing should be done with intent to own truly long term. However, I strongly disagree with the thought that all DDs should be leases. My current DD, which I have been driving for nearly 4 years, has cost about $75 per month, including tires and maintenance. I’ll probably put in another 2 grand this summer, so that will bump me up to about $100 per month with maintenance. The belief that reliable vehicles only come new or near new, from dealerships, is EXACTLY why many people ended up under water now. These people have been terrified in to overspending. Granted, a lease could have improved their position over purchasing new, no argument. But a cheap car is a better financial option for, at least I believe, the vast majority of the purchasers now underwater.
And the reason there is a heavy “I won’t buy new or lease” vibe here is because many of us have a great deal in common, both financially and lifestyle, with the founders. In Rust we Trust because financially nothing else made sense. I make enough now that I could drive something new. But why the hell would I when I can instead direct that money in to things I would much rather have.
Right, but how much did you put down initially? How much will you have to put down again when that one craps out? How much more a month were you paying on the loan?
When amortized, there isn’t a massive difference when talking about anything “not a beater” as a DD.
None. I had no loan. Ever. the $75 a month INCLUDES the purchase of the car. And no, its not a total beater. However, there is also nothing wrong with driving a beater, so long as its reliable. For those who have the spare income, and the desire, buying new and leasing is great. Many of the people doing so do not have the spare income, especially now.
Fair enough regarding your situation.
I’d argue that people with slim spare income is where a lease can make the most sense. Costs are built in and easy to budget, plus the monthly outlay is lower than financing to own.
Yeah, I don’t get the anti-leasing on a lot of car sites. OK, for me it wouldn’t work and presumably not the people against it, but that doesn’t mean it can’t be a good deal for other people. My cousin leases a new BMW every few years—they even pay for oil changes—and it works out really well for him since he doesn’t drive over the limit and doesn’t have to park where the car is likely to be damaged. IMO, it’s the only way to “own” a German car.
My wife has a highschool friend who was always trading in cars. I mean she kept them 3 years at the MOST, often times around 1-1/2 years she’d trade it for something else. We couldn’t figure out how she was making that work until the day came that no one would give her financing for the next car she wanted. She moved back in with her parents after that.
“I’m listening to Liverpool’s greatest band, Echo & The Bunnymen.”
You guys are just full of hot takes lately aren’t you?
Right?!
No respect for Flock of Seagulls?
That comment really spun me round, round like a record, baby. I should probably just Relax.
Spec Ocean racing, that involves all disciplines of car racing in one season, Drag, Stage Rally, Rallycross, Autocross, Time Attack, Wheel to Wheel Circuit racing, sprint and endurance. But here’s the kicker, all the cars must be driven to and from each event and the only spares and tools and crew you can have are what you can carry in/on an Ocean, plus one backup/support Ocean. The backup Ocean can only be used as the primary vehicle following a totality, and then if you need a new backup you can purchase one.
Ok. How does that make any money, though?
At least it’s a better way for them to go out than getting dumped into rental fleets.
All the cars are driven by reality stars and social media influencers. There are artillery pieces placed strategically around the venues, and people can bid on the right fire on the track during the event. Direct hits win cash prizes.
Ahh, the Jake Paul business model.
That’s the fun part! You don’t!
How do you make a small fortune in auto racing?
You start with a large fortune.
They should work up a deal with NASCAR. I’d love to see those things out trading paint on the oval! I’d be rooting for em as the underdog. Maybe if they wait carefully for a pileup they’ll come out on top XD
Echo and the Bunnymen’s take on the Doors’ People are Strange is excellent.
Because it’s barely discernible from the original!
I love a good tribute or cover but if you’re not going to do anything new, what is the point really?