We need a car, but we don’t plan on driving much, I would estimate 2-3k miles a year for the next few years since we work from home, and most of our driving will be local. However, if we were to buy, we would plan on owning the car until it stops working. Our credit should be good.
Generally speaking given our circumstances, will leasing or buying be more efficient? My worry with leasing if we drive so little is that we will be paying for 10k miles of usage per year but won’t be using anywhere near that. Is that the right way to think about this?
For the recharge specifically, buying seems attractive because of the $7500 federal tax credit, but the worry is the reliability seems to fall off after 3 years (regular XC90 sounds like it’s more reliable).
I lease an XC90 and like it but given current market conditions that seems like a pretty expensive car to drive only 2k-3k miles a year. But if you are set on it, I agree with Ursus that you should lease it rather than buy.
could you explain why lease is best? I am also not seeing 7500/year anywhere, things I am seeing are closer to $800/month (+tax) + 5k down. Does the fact that we will only drive 2-3k miles a year impact this thought?
mainly because of its reputation for safety and being good for families, which are my main criteria. Not really much of a car person otherwise and mainly view it as getting us from point A to point B, mainly care about those 2 criteria.
Reason for considering recharge over the gas version is just the thought that it might retain value better, or electric infrastructure will be better in the coming years. I don’t think it will pay off financially necessarily in gas savings, especially with how little we expect to drive. If it helps the environment that’s a plus too but it also doesn’t seem clear that it does.
I think if leasing won’t fleece me, I’d prefer leasing an xc90 over buying the gas or recharge version. The only thing I don’t really understand is how me driving so little impacts the value of the lease, or if I’d somehow recoup the value from the unused miles at the end of the lease. I would expect at the end of the lease I would not purchase, and would either start a new lease or buy a different car at that point.
Agreed. I’d at least rule-out the MDX, comparable Lexuses, Palisade and Telluride first if the goal is to drive it into the ground.
Kind of the opposite: as long as the tax credit is in play, in normal times, resale was usually depressed by at least the amount of the tax credit. You pay more than a $7500 premium PHEV vs an ICE on the XC90, and you aren’t driving it enough to recover that in fuel savings.
In OPs shoes, I’d go back to the drawing board. The vehicle they think they want is in high demand, with few to no discounts (formerly double digits on ICE version) have to buy it to capture the tax credit (not passed as a lease incentive) and still pay a PHEV price premium, they expect to drive it forever, but drive very little.
+other Safe, reliable family cars. If you plan on driving it till it stops working then future resale doesn’t really matter, but having a more reliable vehicle (like the ones @jeisensc said) will lower your total cost of ownership because less parts will break, etc. I’d definitely shop around different models
Funny that I see the Telluride pop up more often in these chats, I also have an XC90 which I am either consider buying out of lease or buying something “else” and it got me thinking about Kia. Does anyone on here actually had one and comment about reliability and quality? Thanks
Almost all leases are bad now, but buying a Volvo will probably cost you more in the long run than most other SUVs in this class. 7,500 miles a year is the lowest on a Volvo lease, you don’t need to get 10k.
Ascents, Highlanders and Tellurides are good values from both POV: purchase price and value retention.
In addition, it’s a lot cheaper to get the longest extended OEM warranty on those cars, going out to 8-10 years depending on brand from the original purchase/in-service date.
The more they can have things replaced under the ext warranty, the longer the OP can economically continue to drive the car.
The OP’s criteria was strangely worded: “drive it until it stops working.” There’s rarely a moment when a car just stops working in any permanent sense. Almost everything can be fixed. It’s more likely to become a question of being fed up with the expense and/or frequency of repairs. Or feeling like you’re being nickle-n-dimed to death. It’s one thing to spend an average of, say, $500 per year on repairs on an 8yr old car; it’s quite another to spend $3,000+
thanks, based on all of the feedback I am going to look into other options… didn’t realize xc90 reliability was that bad. I had my eye on xc90, but if these other options are better value and offer similar safety (which it seems so from a quick search), then it probably makes more sense given how little I typically drive. Am I correct though that if I get a lease for say 7.5k miles a year, and I only drive 3k, that I’ll basically eat the difference / won’t recoup it at the end of the lease? So leasing would generally not be a great idea for me? Or is this logic broken
Of the options listed in the thread (MDX, Lexus, Palisade, Telluride, Toyota Highlander, Subaru Ascent) are any coming off of MSRP these days, or MSRP is what I should hope for?
Some broker’s on here are offering decent discounts on Lexus and you can research obtaining a Subaru through their VIP program, which would be well under MSRP.
Thanks, based on the discussions here I’ve been looking into Highlanders and Palisades / Telluride, but Telluride has big markups around me so mainly considering Palisade and Highlander.
I didn’t realize depreciation varied so much across brands, looks like Volvo is pretty bad here. I just figured a $X car is an $X car, and given I don’t plan to drive a ton I think I should pick something that will hold its value reasonably well.
Between Highlander and Palisade, are they comparable in holding their value? I am not sure what a good resource to quantify this is, but I found
which would suggest Highlander would hold its value a bit better (80% vs 70% after 5 yrs), but this doesn’t seem too bad. Is this accurate?
For 800 it is quite pricey.