Question about purchasing a new vehicle

[Thor Von Clemson]

So tomorrow the other half, her father, and I are going to get a new vehicle for us tomorrow. We are looking to get either a 2005 Explorer or possibly an F-150. We have three vehicles right now; a leased 2005 F-150 which is mine and I love it, a 2005 hyundai elantra that I bought for her, and her 2003 Dodge Stratus SXT. We are going to be trading in the F-150 and the Stratus for a new vehicle that is safe, can haul, tow, store stuff, and can comfortably seat a family. My question is I have one purchased under my name already (the Elantra). We are debating a few things.

Do we want to buy this vehicle, or lease it? We are trying to keep the payments as low as possible... around 350 a month. I already have the debt from one vehicle in my name, do I want to put another one on there? We are getting married in June, having a house built, and starting our lives together. I think at that point my debt legally becomes hers anyways doesn't it?

I am torn because at the end of the lease, we would want to buy the vehicle. However in the end I believe we end up paying more money for it. On the other hand, I could stretch out a loan over 6-7 years and get around the same monthly payements without having to deal with the lease being up or refinancing.

What do I do? [img]/images/graemlins/popcorn.gif[/img]

[ApeDosMil]

Re: Question about purchasing a new vehicle

Suvs are gas eaters, you sure you want to pay 500 bucks a month on gas?

[Jack Napalm]

Re: Question about purchasing a new vehicle

How much will you drive it? That could really affect any lease agreement. Do you want to keep the vehicle for the term of the contract or will you want a new one in a few years. I leased a vehicle and loved it but only drove a few miles to work each day when I got it. I ended up moving and my drive became 50 miles a day. I let the lease expire and bought a vehicle.

[YetAnotherOne]

Re: Question about purchasing a new vehicle

If you own the Stratus I'd sell that one yourself rather than trading it in. No matter how good the deal might look on paper you always get raped on trade ins.

[zeegler]

Re: Question about purchasing a new vehicle

I don't get it, if you already have a leased 2005 F150, why would you be looking into buying a new one?

[shreddermon]

Re: Question about purchasing a new vehicle

If you want to own the vehicle at the end, then this is a no-brainer: take out a loan to purchase it. You are not likely to do better with a buyout at the end of a lease.

And, if you haven't already, use Edmunds for pricing info. to negotiate from:

www.Edmunds.com

[Birdzeyeee]

Re: Question about purchasing a new vehicle

[ QUOTE ]
If you want to own the vehicle at the end, then this is a no-brainer: take out a loan to purchase it. You are not likely to do better with a buyout at the end of a lease.

And, if you haven't already, use Edmunds for pricing info. to negotiate from:

www.Edmunds.com

[/ QUOTE ]

+1 Leases have hidden expenses / restrictions on mileage and you'll always be "renting" your vehicle like an apartment. Its cheaper to buy it outright with cash if possible or the next best option is to take a loan at the best possible rate. Consider resale values at the end of 5 years to see which vehicles are better values. Also consider insurance, fuel, and maintenance costs as the overall expense of ownership to be factored in.

Edmunds, etc. can help with this as well as overall research. 2006 models can be better deals than 2005 since depreciation on 05's are already one year old in depreciation value. Only exception would be if you got an unbelievable savings offer, but that's rare. Good luck.

[Crusher]

Re: Question about purchasing a new vehicle

I'm not sure I follow either. It looks like you already have a vehicle that can haul & tow stuff (F150) and can seat a family (Elantra & Stratus). If the 2 sedans are paid for, I'd say since your building a house and getting married soon, 2 things that aren't cheap, maybe it's best to hang on to the cars you have now. Not trying to be preachy or a smartass, just speaking from past experience, hate to see a fellow JCF'er get in trouble. But if your making payments on all 3, then yes it may be wise to trade 2 for 1.

As for your questions, I think as long as you have good credit and the bank you are applying to feels you can pay the loan, they will give it to you. You can have as many car loans in your name as a bank will give you. Leasing will give you lower payments, but it's basically like renting. If you drive a lot and go over the mileage allowance, even though it's usually only 10 cents per mile or whatever, it can really add up quickly. I leased a car once, I don't think I would ever do it again.

[Inazone]

Re: Question about purchasing a new vehicle

Are any of the vehicles giving you mechanical trouble that's prompting you to make a change? Poor winter vehicles? An Explorer or F-150 is going to be costlier to drive. Are you considering any alternatives? Unless you are still able to get Ford's employee pricing discounts, neither of the vehicles you mentioned is going to be cheap heading into winter.

My wife and I still have new-car payments (my 2001 Kia Sportage and her 2002 Chevy Prism), so I can relate when you talk about keeping monthly payments down, but other than getting out of your current lease, I'm not sure I see the benefit of your plan. Do what you want with the current truck, but sell one of the cars on your own unless you can get an incredible trade-in credit.

[Thor Von Clemson]

Re: Question about purchasing a new vehicle

Here is the situation. We have three vehicles. The F-150, The Elantra, and the Stratus. None of the vehicles are close to being paid off. I leased the truck because I needed a vehicle for work. That situation has changed. I then bought her the Elantra because she needed it. The Stratus was a good vehicle but she needed something better on gas, with a good warranty that would run a bit longer. We had a deal setup to sell the Stratus but wouldn't you know it the deal fell through. For the next few months, we tried religiously to sell that damn car, but nothing worked. We are paying out, with the three vehicle payments plus their insurance, close to 1600 a month. Now I know I get hit in the head a lot, but that seems a bit high to me.

Fast forward to the present. We still have not sold her car despite lower the price a few times. We still have 3 vehicle payments and I am really taking it up the butt for it. I am not fond of the situation, and I may have jumped the gun a little when I bought her the car, but this is the situation. We decided that we ABSOLUTELY NEED to get rid of one of the vehicles. This is the best conclusion we have come up with.

We can get the Explorer, which is better on gas than my full size F-150, with all the family pricing and rebates and stuff..

As far as mileage goes, we have a lake place up north that is 3 hours away. We frequently bring a boat up there. I do not like mileage restrictions. We like to drive a lot. I have thought about this, and doesn't it help your credit in some way if you buy a new vehicle? I guess we are just worried that when we go to do all the paperwork for our house, having the debt from the two vehicles in my name will come back to haunt me. Other than the two vehicles, we have little external credit card debt or anything like that.

Does that help explain the situation any more clear?

[shreddermon]

Re: Question about purchasing a new vehicle

So the lease on the F-150 will be up soon? Buh-bye to that vehicle. You're trying to sell the Stratus. So long to it, eventually. (Take a loss, if you need to... as long as you pay off its old loan.) And you're keeping the Elantra for her.

Then you need a replacement vehicle for you. Typical 2 car family, correct? Towing is a need, as is high mileage. Again, no brainer: purchase outright with a loan.

Buying a new car does not "help" your credit, though. But going from financing three vehicles to two usually does help. Assuming you'll be increasing your debt levels with the new purchase, though, it's probably a wash, from a credit perspective. Maybe a slightly worse position. As long as you have decent and reliable income and a strong history of always making your paayments on-time, I wouln't worry too much about it affecting the house situation.

Good luck.

[jgcable]

Re: Question about purchasing a new vehicle

Here is my take. Find out what the dealer will give you for your Stratus. That will 100% convince you to sell it privately.
Gas prices suck and they ain't getting any better. Having 2 gas guzzlers in your new family will suck big at the pumps.
This is what I would do..
Keep the Stratus for fuel economy and because you can haul the family around in it.
Trade in your 2005 F-150 and if you absolutely need a truck to haul your boat around, look at an Explorer. Try to buy the SUV with the best fuel economy that can also haul your boat and the family around.
This way you will have 2 multi-purpose vehicles and at least one of them won't be killing you at the pump.

[DonP]

Re: Question about purchasing a new vehicle

Zach,

(I guess it's too late for you to read this according to your first post)

You just started the lease with the F150 not too long ago, right? It won't be easy to get out of without taking a hit because it is now used.

You bought the Elantra recently as well? Once again, major hit becuase it is now a used car.

Selling either of these to will make you eat it money-wise. You will not sell them for enough to pay off the loan or get out of the lease. If you trade the truck in for an Explorer, the dealer will gladly roll in the debt from the old lease into the new one = higher payments. He's looking out for himself - not you. But you say you like to drive 3 hours away, don't like the milage restrictions (you have a lease), and the F150 gets bad gas milage. This might be a bad enough decision getting the F150 that you might have to just eat it now in order to move on. Keeping the F150, you will probably bust the lease milage restrictions so badly you'll be forced to buy it at the end of the lease, and you will continue to get bad milage no matter what. So maybe on this decision it might be better to bite the bullet and just dump it now.

Who will be driving which car daily for work, and how far? You metioned your fiance' had a long drive = reason for the Elantra, but if you are making daily long trips to work in either the F150 or the Explorer, neither of these two may be a good choice for you.

Unless you have some real special circumstances, you are not going to get a new car loan for $350 a month. We put down enough on a 2003 Tahoe so that the loan amount was $22K, 5 years at 5.9% interest = $444.50 a month. With a 1999 LT Z-71 Silverado ($1K down, $30K, $17K at end of lease) I leased for 5 years, I got the payment at $358/month.

I say keep both the - Elantra = fuel economy and haul family, F150 = tow boat and other stuff you will need for a new house (I know - just bought a new house myself).

Sell the Stratus (hopefully you can make enough to pay off the loan) and do not got into any more new debt, or you will have a hard time qualifying for a home loan. Even if you can't sell for enough to pay off the loan, consider how much you will save on insurance for a car not being driven.

Meaningless babble below:

When the lease was up on my LT Z-71 in 2004, I saw the writting on the wall. Gas is going through the roof, I had done no service to the truck for 60K miles (not even tires), so I gave it back. The battery had died 6 months earlier, and I charged it up and put it back in. It was a great truck, but I gave her back. I bought a 1990 Trans Am GTA with low miles for $3800, and a well taken care of fully loaded 1997 Saturn SL2 for $2350 (143K miles) as my beater/get to work car. I miss the truck, but I don't miss the payments, the gas milage, and it's been a great decision financially. The Saturn has been great for the 25 - 30 mile trip to work and back, and the GTA is a blast when I want to go fast.

Things will come in time - you can keep up with the Jones's right off the bat. You are very forunate already to have a house under your belt at such an early age. Don't blow it by getting into so many bad deals that you lose the house. When has anyone ever made money selling a car they bought new? Sure, antique or collector cars. Cars are a bad investment PERIOD!

BTW Last night I cleaned up the RR1 - cleaned and polished the fretboard & frets, put in a brand new OFR, but had to string her up with 9-46 GHS Boomers (only strings I had at the time).

[Thor Von Clemson]

Re: Question about purchasing a new vehicle

Donp- I am glad you are enjoying the RR. I am guitar-less right now. My neighbor borrowed me his Ibanez s540 for the time being, but he wants it back soon.

Anyways, The reason we need to do this so soon is because it is costing so much money for 3 car payments per month. We have tried everything, short of selling our bodies, to get rid of the Stratus. It is costing us way too much money to keep all three vehicles. The dealership already approved us for a loan for a new vehicle. Actually, I would prefer a used vehicle, but since we have no money down we need something with a large rebate. The numbers and everything work out pretty well as far as the new vehicle is concerned, however I was wondering whether it would be a good idea to buy it or lease it. I understand I am taking a hit on trading in an essentially brand new F-150, but like I said the dealership approved us for a new vehicle. Her family has done business with them in the past, and they will take the Stratus in for what we owe on it.

I don't want to sound like I absolutely need to have a brand new vehicle that no one else has yet. I could care less about the vehicle, as long as it is safe, reliable, and gets me from one point to another. I felt guilty for buying her the Elantra with a sunroof, however I figured I might as well throw that into the deal since it was something she wanted and we could afford it.I had them put two things on my F-150; a towing package and the upgraded audio system. We need the towing package to tow stuff and I needed the audio system because.... well I needed it. Other than that it is pretty basic, no power locks, mirrors, windows or anything. I also had them add cruise control because I would go nuts driving up to the cabin with no cruise.

When it comes down to it, minus her occasional shopping sprees, we are pretty simple people. We are very fortunate to have people in the right places. Her parents are builders, they are good friends with all their subs, we can do a lot of the work ourselves, and her parents have set us up with a good mortgage guy. We kind of already know where we need to be in order to get the house we want. With the land, the bid came in at 173K. Her dad is building us the house at cost (which if I remember correctly comes to about 8-10%) plus we are going to be doing the floors, all the low voltage electrical work, and some other misc things.

I know we are just starting out, and I have NO IDEA what it is going to be like to own a house and have to pay for it. I also had NO IDEA how much fun it was to talk about money all the time, however her and I work very hard and are fortunate to have good jobs. We have sat down and worked out our future budget and what we need very many times.

As far as the vehicle is concerned, I would really like and Expedition, however those are way too expensive. The way we worked it out with the dealership, it is between a Taurus, a Ranger, and an Explorer. The Taurus may or may not be a good vehicle, however we feel like we need something more big. The Ranger could work out (and if for some reason the deal with the Explorer does not work out I will more than likely go with a Ranger), however I am concerned that it is not suitable for us and our needs. Again, we need a family vehicle that can tow and has storage space... That leaves us with the good old Explorer. Towing power, storage space, can comfortably fit a family, good rebates, and with the family pricing good price.

I agree with you Don, cars are a horrible investment. Too bad I do not have a Mclaren or some other car I could actually make some money on.

BTW Don, how is the move/new house going?

[DonP]

Re: Question about purchasing a new vehicle

Zach,

The RR is great. I got done with it last night at 11pm, the kids were asleep, so I couldn't do much.

It sound like you do have special circumstances if the dealer is willing to pay you what you owe on the Stratus - I take it you can't sell it for what you owe on it?

I'd say buying the Explorer sounds like your best option by what you have said - as long as you can afford the payments. I had to lease my 1999 Z-71 because I could not afford the payments to purchase it. I was planning on buying it out in the end, but that wasn't in the cards. To give you an idea of what it would have cost to buy this $30K truck, I put $1K down, 60 months @ $358 = 21480 + $17K remaining = $39480 + interest on the $17K loan if I had to take one out. The lease lets you spread out the payments, but anytime you do that it will cost more in the long run.

The new house is great. It's 3000 sq ft compared to 2300, three car oversized garage vs. tight 2 car. It's just way more roomier. When we built the last one 8 years ago, we thought that would be it. I guess the rule of thumb is never say never.

One issue - in my old house, the master bedroon (where I tend to play a lot) had GREAT reverb. This new room is dull and liveless, so I miss the acoustics of the old house.