Don’t buy it! You would never come out ahead on this car. You could lease 2 more cars over 6 years for what the buyout is on this.
That was actually my reasoning for buying the car out. I could have leased two base models in 6 years, or buy my fully loaded and in 6 years still have some equity for trade in.
Yeah but you’re payment would be higher, especially if you bought in the first place. Leasing at a $202/mo payment is cheap. If you buy this thing out, in 6 years you’ll have a 9 year old Hyundai, it won’t be worth that much.
They put $1000 down and $202 per month, for pretty basic $21k msrp car. So if he leases two more of these in 6 years, he’ll be out of additional $16.5K. Or he could buy his car for around $14.5K with tax included and in 6 years sell if for another $2-3K. Now people will say, yeah, but what about all the tech he could have gotten in the future. However, what possible tech would they include standard on base models? Possible Lane Assist and Active Cruise control, that’s about all.
To each their own, but I keep my wife in a new car every 3 years and don’t have to worry about it crapping out.
Agree. Or worry about bigger maintenance items. That $4k saved between payments and equity can be easily eaten up if you have to handle the basics like 2 sets of tires, a set of brakes and rotors, spark plugs, filters, transmission service, and shocks/struts
Not to mention loss of value if you have an accident.
lol, what value? Like you said, it’s peanuts after 9 years, but still peanuts you put in your pocket.
If OP drove 20K in 3 years, he’ll be at around 60K. So one set of tires, brakes. No need to replace rotors or spark plugs etc. Take off a generous $1,000 off for the maintenance. You’ll still have around $3K in equity.
Who knows if new cars are better? So many new cars crap out, sometimes it’s safer with an older car. Perhaps Hyundai is not the best example though, but they have 10 year warranty after all.
Generous $1k for tires and brakes? I want to know what shop you use! They charge $600 for brakes on even the cheapest vehicles these days. Another $600 for bottom rung tires. And when you cross 5 years, you really should be replacing lots of stuff regardless of miles. Belts breaking from dry rot is a very expensive corner to cut.
Sure, I use La Barge’s Tire and Service in my area. I buy my own ceramic brake pads for $80, pay around $120 to install them. Then I buy tires online at $150 per tire, costs me $20 to mount and balance them.
10 year old hyundai sedans are $1000 cars all day. Maybe $1500. Especially with vehicle technology trajectory and sedan market trajectory, these cars will not be worth very much in the long run. Not great advice. Especially if these folks do not intend on driving the vehicle for 10 or more years beyond purchase date. Finally, if OP leases 3 22k cars, spending 8000 per lease, he gets 66k in total value (3 22k cars) vs. 26k including interest over 9 years. Total car expenditure is 24k vs. 26k for 9 years (not including expenditures). At best, ownership would be a wash over 9 years. Plus flexibility to upgrade and gap insurance if included with Hyundai leases.
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yeah you wrote a lot, but in reality all I need is to look up 08-09 Sonatas and see that they sell for around $5-6 grand with ton of miles. https://www.cargurus.com/Cars/l-Used-2008-Hyundai-Sonata-c8284
First, that’s retail. With recon. You can’t get retail on a trade in. You can’t get retail as a private party. Second, I doubt they will get that much for those cars. Third, look again at changing market preferences. Markets dictate used car pricing so forecasting values in 6 years is difficult.
It’s also worth noting how long some of those Sonata’s have been up for sale, 28 days, 77 days, 124 days…
Sure it’s very unpredictible and I am not 100% sure I’ll get much for my 10 year old Optima. So the back up plan is to give it to one of my kids, who will be of driving age by then and based on how much I drive, the car will barely have 50k miles.
Why are you on a leasing website if you don’t understand why it presents value? Very few people drive 5,000 miles per year, but if you do then I feel really bad for you because depreciation on your car will far exceed the value you’ll get from it. It won’t be worth much more than one with 100,000 miles on it.
Well, the reason I am on the leasing website is to understand the value of leasing. I appreciate you feeling bad for me and I do understand the value of leasing if you can hack one. However, I’m tired of paying all the taxes and fees, then bringing
the car back with 16-18k miles just to do it all over again, yet I still need a car. So I’m not sure how you can calculate a value on this.
So here’s a real life example. In 2015, my 2012 S60 was off lease. Had a 36/10K lease, and the car was being returned with 15K-20K miles. When new, the car was mid/upper 30’s, and the residual was $21K. At the time, CPO’s were going for 19K. I did try unsuccessfully to let a local dealer take it back and flip it to me for about $19K CPO. I wasn’t interested in a non-CPO car, as Volvo has a very strong CPO program. I wound up leasing a Q50 for 39 months @ $315/month, with 1st month and DMV at signing. Over 39 months, the cost was $12,3K.
If I had been able to get the S60 for $19K, I’d have been financing about $21K (including taxes and fees, with nothing due at signing to make it a true apples to apples comparison). A loan at about 3% would have yielded a 48 month payment of $466/month. I believe a private party sale today of a S60 w/ sub 50K miles would be in the 9K-10K range, and I still technically have 3 months to go on my Q50. So in 3 months, let’s say the 2012 S60 price doesn’t move much. I’d sell for $9500 and owe $4200 on my S60. I’d clear over $5K when the loan is settled. However, I also paid $466 * 39 for the car, or $18,2K, which is $6K more than I paid for my Q50. And that’s not factoring any maintenance needs a car would need from months 37 - 75.
So my lease, for a mostly comparably optioned car, cost me $12.3K. Had I purchased my S60, I’d have paid out $18.2K, but got back about $5K when I paid off the loan. So that’s $13.2K. About $1K more over 39 months, and for a car that was 3 years older and would have had more maintenance needs.
Perhaps the math isn’t so jarring for higher demand non-sedan cars (such as small SUV’s), but with the lower demand for sedans as well as the glut of 3 year old off-lease sedans that have been flooding the market in recent years, it’s a sample of one showing that leasing is hardly a losing proposition.
Doesn’t work for everyone. I’m comparing to two leases back to back, plus my buyout was much lower on $36K car and there is no way I could get a Q50 for $315 a month. Besides, you wanted to buy your Volvo, so you thought there was upside to buying it vs leasing.