Buy, Finance or Lease - the Car Conundrum

[astonas]

Re: psychology of resale value

i don't think it's creepy. this is a community so it is full of fairly like-minded people. and being the community it is, those people are fairly literate and familiar with the cultural endowment. as for looking it up, all it took was googling "dickens shillings happiness."

Sorry, I shouldn't have used the word "creepy," it doesn't express my feelings well, perhaps uncanny would have been better. And indeed, in a like-minded community, it shouldn't have been quite so surprising; it merely means I'm finally assimilating. We're getting so we can finish one another's thoughts.

( chant:"one of us. one of us. ..." )

As for finding it, it certainly wouldn't have taken long, but even so it would in this case have been rude to search for it when someone had come to my desk and was trying to converse. I do appreciate that it was added, however.

Thanks!

[sunpearl71]

Re: Hyundai After Action Report

They share the same power trains and engine technology. For example, both Hyundai and Kia came out with the direct inject 1.6 litre GAMMA engines in 2012. The materials they used to build the engines differed but the design was the same. One of them (I think Hyundai) has more automated assembly, while the other has more "by hand" assembly.

Thanks Shiny and GRG55. I didn't know the connection between Hyundai and Kia.

[shiny!]

Re: Hyundai After Action Report

Thanks Shiny and GRG55. I didn't know the connection between Hyundai and Kia.

Styling and trim will differ, but essentially the Hyundai Accent = KIA Rio. The Hyundai Sonata = KIA Optima...

[don]

Re: psychology of resale value

dickens shillings happiness

Could be a 'tulip password

[GRG55]

Re: Pre-Owned Lease Matrix

Shoot. I don't know, just gettin' into the biz.

I'm in PBC (Palm Beach County, for the uninitiated) where pickups are not the norm, at least in my burg. Northern Florida looked like pickup country when I drove through. Sat at a bar with a couple that loved the hotel/bar/restaurant combo we were staying at. They said they came a couple of times of year to get completely wrecked and didn't even have to leave the premises. Bemoaned what had happened to the "real" Florida.

You'll love this one don.

Quote of the day from Jim Sinclair: "One of my dogs can qualify to buy a Cadillac these days".

Oh, and apparently in this world of ZIRP buying a car is cheaper than owning it. I just got the annual registration renewals for the his 'n her pickups. Gonna cost me $168.90. At those prices I could "borrow" $15k at the local dealership for less than that annually.

[lektrode]

Re: Pre-Owned Lease Matrix

You'll love this one don. (grg)
....in this world of ZIRP buying a car is cheaper than owning it. I just got the annual registration renewals for the his 'n her pickups. Gonna cost me $168.90. ....

hell, thats chicken feed, grg - for my car and van i had (key word) in HNL, they wanted nearly 750bux - just for the GD plates.
not including the other 5200+/year it was costing me to park/drive em - less than 10k miles/year, for both. (owned outright)

and since i needed to buy a replacement (fergit about 'new') car anyway, decided that it was time to get out of the vehicle owning 'biz' - now i just rent when i'm there - and didnt even spend 2grand last year - brand-spankin new cars, no repair costs/worries and much better rides than i could/wouldve otherwise paid to 'own'

ah tells ya, ah am FREE AT LAST, MF'RS, FREE AT LAST!

and... did eye miss something?
is mr don going to be a car dealer/salesman now????

[shiny!]

Re: Pre-Owned Lease Matrix

My 2102 Accent costs me $250/year for registration, or a little over $20/month. My old Crown Vic was $25/year. The new car has to be insured for collision and comprehensive, which I didn't do for the Crown Vic.

The extra $18/month I'm paying for registration plus the higher insurance costs really cut into the money saved at the pump.

[lektrode]

Re: Pre-Owned Lease Matrix

...The new car has to be insured for collision and comprehensive, which I didn't do for the Crown Vic.

The extra $18/month I'm paying for registration plus the higher insurance costs really cut into the money saved at the pump.

not to mention that the crownvic wouldnt need 'collision' coverage - at least not if you hit or got hit by the hyundai, since the latter would likely just bounce off the former...

but so much fer buying a high MPG car to 'save money' eh?

[don]

Re: Pre-Owned Lease Matrix

not to mention that the crownvic wouldnt need 'collision' coverage - at least not if you hit or got hit by the hyundai, since the latter would likely just bounce off the former...

but so much fer buying a high MPG car to 'save money' eh?

I need to shield this info from the Big Boss . . . .

[GRG55]

Re: Pre-Owned Lease Matrix

hell, thats chicken feed, grg - for my car and van i had (key word) in HNL, they wanted nearly 750bux - just for the GD plates...

...and... did eye miss something?
is mr don going to be a car dealer/salesman now????

$750 a year? for 2 plates?? Yikes!

You haven't heard about Doctor Don's Den of Classy Convertible & Coupe Conveyances? "Cash for Clunkers" and Barrett-Jackson look out...

[don]

Re: Pre-Owned Lease Matrix

$750 a year? for 2 plates?? Yikes!

You haven't heard about Doctor Don's Den of Classy Convertible & Coupe Conveyances? "Cash for Clunkers" and Barrett-Jackson look out...

if "Cash 4 Clunkers" is back on, count me in the game!

90% of the 1%ers made their coin via the corporate conga line.

Boom Boom!

[lakedaemonian]

Re: Pre-Owned Lease Matrix

$750 a year? for 2 plates?? Yikes!

You haven't heard about Doctor Don's Den of Classy Convertible & Coupe Conveyances? "Cash for Clunkers" and Barrett-Jackson look out...

We're paying well over $500 a year registration for each full sized motorcycle that gets far higher fuel economy(but less fuel tax take) and causes far less wear and tear on the roads used.

[Milton Kuo]

Re: Pre-Owned Lease Matrix

$750 a year? for 2 plates?? Yikes!

You haven't heard about Doctor Don's Den of Classy Convertible & Coupe Conveyances? "Cash for Clunkers" and Barrett-Jackson look out...

My understanding of Hawaii is that it's a state with an unusually large number of government workers so it's not surprising there are taxes and fees for almost everything. Perhaps vehicle registration fees are based on the value of a car, as it is in California.

Vehicle registration here in Texas is a flat $60 per car. It doesn't matter if you drive a beater or an Italian supercar.

[don]

Subprime Auto Loans - Shotgun Marriage

putting (your savings) ZIRP to work . . .




By Carrick Mollenkamp
JASPER, Alabama | Wed Apr 3, 2013 7:05am EDT

Money was tight last year for the school-bus driver and neighborhood constable in Jasper, Alabama, a beaten-down town of 14,000 people. One car had already been repossessed. Medical bills were piling up.

And still, though Nelson's credit history was an unhappy one, local car dealer Maloy Chrysler Dodge Jeep had no problem arranging a $10,294 loan from Wall Street-backed subprime lender Exeter Finance Corp so Nelson and his wife could buy a charcoal gray 2007 Suzuki Grand Vitara.

All the Nelsons had to do was cover the $1,000 down payment. For most of that amount, Maloy accepted Jeffrey's 12-gauge Mossberg & Sons shotgun, valued at about $700 online.

In the ensuing months, Nelson and his wife divorced, he moved into a mobile home, and, unable to cover mounting debts, he filed for personal bankruptcy. His ex-wife, who assumed responsibility for the $324-a-month car payment, said she will probably file for bankruptcy in a couple of months.

When they got the Exeter loan, Jeffrey, 44 years old, was happy "someone took a chance on us." Now, he sees it as a contributor to his financial downfall. "Was it feasible? No," he said.

The Maloy dealership wouldn't discuss the loan. "I got nothing to say to you," an employee said.

At car dealers across the United States, loans to subprime borrowers like Nelson are surging - up 18 percent in 2012 from a year earlier, to 6.6 million borrowers, according to credit-reporting agency Equifax Inc. And as a Reuters review of court records shows, subprime auto lenders are showing up in a lot of personal bankruptcy filings, too.

It's the Federal Reserve that's made it all possible.

MONEY, MONEY EVERYWHERE

In its efforts to jumpstart the economy, the U.S. central bank has undertaken since November 2008 three rounds of bond-buying and cut short-term interest rates effectively to zero. The purchases of mostly Treasury and mortgage securities - known as quantitative easing and nicknamed QE1, QE2 and QE3 - have injected trillions of dollars into the financial system.

The Fed isn't alone. Central banks from Tokyo to Frankfurt to London are running their printing presses overtime. The heavily indebted advanced economies are trying to reflate their way out of the prolonged bout of crisis and recession that crystallized with the collapse of Lehman Brothers Holdings Inc in 2008. That crisis, of course, followed a nearly decade-long cycle of easy money and exotic financial products that itself began with the collapse of the tech-mania bubble of the late 1990s.

The Fed's program, while aimed at bolstering the U.S. housing and labor markets, has also steered billions of dollars into riskier, more speculative corners of the economy. That's because, with low interest rates pinching yields on their traditional investments, insurance companies, hedge funds and other institutional investors hunger for riskier, higher-yielding securities - bonds backed by subprime auto loans, for instance.

Lenders like Exeter have rushed to meet that demand. Backed by Wall Street banks and big private-equity firms, they have been selling ever-greater amounts of subprime auto loans in the form of relatively high-yield securities and using the proceeds to fund even more lending to more subprime borrowers.

Expansion of the subprime auto business was chronicled in a 2011 Los Angeles Times series. Since then, growth has continued apace. Consider that in 2012, lenders sold $18.5 billion in securities backed by subprime auto loans, compared with $11.75 billion in 2011, according to ratings firm Standard & Poor's. The pace has continued so far this year, with $5.7 billion of the securities issued, compared with $4.4 billion for the same period last year, according to Deutsche Bank AG. On Monday alone, three deals totaling $1.6 billion of subprime auto securities were announced by Wall Street banks.

To make up for the risk of taking on increasing numbers of high-risk borrowers, subprime auto lenders charge annual interest rates that can top 20 percent.

The Exeter loan Nelson and his wife got, for example, carried a 21.95-percent rate. Exeter, which is majority-owned by private-equity giant Blackstone Group, assumes that one in four borrowers will default on their loan, according to an Exeter investor pitch book reviewed by Reuters.

"Exeter works with auto dealers throughout the country to help consumers who do not qualify for prime financing," a company spokeswoman said. "Exeter offers conventional financing with affordable payments tailored to each customer's individual circumstances."

A Blackstone spokesman declined to comment.

http://www.reuters.com/article/2013/...9320ES20130403

[Polish_Silver]

Autos, usury, Irrational customers

putting (your savings) ZIRP to work . . .


To make up for the risk of taking on increasing numbers of high-risk borrowers, subprime auto lenders charge annual interest rates that can top 20 percent.

The Exeter loan Nelson and his wife got, for example, carried a 21.95-percent rate. Exeter, which is majority-owned by private-equity giant Blackstone Group, assumes that one in four borrowers will default on their loan, according to an Exeter investor pitch book reviewed by Reuters.


http://www.reuters.com/article/2013/...9320ES20130403

1) The interest rate is proportional to the default rate, as expected.

2) Rates this high were formerly not allowed (usury laws). The laws had to be changed around 1980, because all the rates (and inflation) were so high.
But when inflation went down, the usury laws were not put back in.

3) I believe in personal freedom, but debt contracts of this sort are not meaningful freedom. They are self destruction. It's like seat belts for cars and helmets for motorcycles. People fight like hell against
something that will save their life.

4) The interest rate is not "too high" in the sense that the lender could charge lower rates and be profitable. The default rate is so high, that the interest rate seems reasonable. So it does seem to be a competitive market, just one that should probably not exist in a decent country.