Car leasing

[N747JB]

I already had the 'financed price', I didn't let them know it was a cash deal until they had all the paperwork figured out.

Yeah, but some manufacturers, like Ford, make part of the rebate contingent on financing with their captive finance company. Right now on F-150's I think it's $1000.00! So, we have people finance a minimal amount, $7-8k and pay it off at the first payment, doesn't make us any more money, but it saves them $950.00 or so.

 

[Henning]

Yeah, but some manufacturers, like Ford, make part of the rebate contingent on financing with their captive finance company. Right now on F-150's I think it's $1000.00! So, we have people finance a minimal amount, $7-8k and pay it off at the first payment, doesn't make us any more money, but it saves them $950.00 or so.

There was no rebate on a Cummins 2500, they are premium vehicles. I was however buying last year's model fully loaded with a 5speed as I wanted and it had been delivered to that dealer over 3 months prior according to the sticker. I got way more off than any rebate when you deal with the conditions that come with them. They got down to 'hold back' price which is where I wanted to be, then they got me back to F&I with a signed deal and I pulled out a bag of $100s and payed him. They worked on me for 45 minutes trying to get me to finance.

 

[JoseCuervo]

Yeah, any time I take out a loan from my CU, I take the life and disability insurance on the loan. It's so cheap that it doesn't pay not to.

I also tend to finance so the payments comes out to about half what I feel comfortable paying every month, and then I pay double. This is something I started doing after the Great Recession hit. A number of my clients went belly-up, and things were tight for a while. And quite frankly, I'm not all that convinced that we've seen the worst of it, so I like to give myself a big cushion. The extended loan terms are part of that plan.

The upside is that I generally pay off my loans in half their terms (or less). The downside is that I usually pay slightly higher interest because of the longer terms. But I get some peace of mind in return.

Rich

I had no idea anybody. Actually fell for those sales pitches. Wow.

Do they lower the premium on your "insurance" portion each month as the loan principal gets reduced?


What peace of mind do you get buying a vehicle that you don't have the cash to payoff if you get killed?

I am guessing the amounts ain't large, so likely doesn't matter, but there is some bad personal financial decision making in that model.

 

[JoseCuervo]

There was no rebate on a Cummins 2500, they are premium vehicles. I was however buying last year's model fully loaded with a 5speed as I wanted and it had been delivered to that dealer over 3 months prior according to the sticker. I got way more off than any rebate when you deal with the conditions that come with them. They got down to 'hold back' price which is where I wanted to be, then they got me back to F&I with a signed deal and I pulled out a bag of $100s and payed him. They worked on me for 45 minutes trying to get me to finance.

I think the 5-speed has gone the way of the dinosaur.

 

[Henning]

I think the 5-speed has gone the way of the dinosaur.

Yeah, the automatic in use at the time was too weak for my application, the guys using them were going through them every 20,000 miles, it needed a 5 speed, and I ate one of those around 100,000. Now all the manuals are 6 speed.

 

[Dr. O]

I snicker over these threads. I drive a 2001 Saturn.

And yes, I could walk into any dealer and purchase the finest car in the showroom - cept I won't.

 

[RJM62]

I had no idea anybody. Actually fell for those sales pitches. Wow.

Do they lower the premium on your "insurance" portion each month as the loan principal gets reduced?


What peace of mind do you get buying a vehicle that you don't have the cash to payoff if you get killed?

I am guessing the amounts ain't large, so likely doesn't matter, but there is some bad personal financial decision making in that model.

It's actually the disability insurance that I care about, but it's not available without the life insurance. I work for myself, and the car loan would be one less thing to worry about if I were to get laid up. And if I die, someone in my family gets a free car out of the deal.

The premium's less than $8.00 / month. If that's the worst financial decision I ever make, I can live with it.

Thanks for your advice, though, especially considering that I never asked for it. That was very nice of you.

Rich

 

[FormerHangie]

I snicker over these threads. I drive a 2001 Saturn.

And yes, I could walk into any dealer and purchase the finest car in the showroom - cept I won't.

The reason that you can is that you don't.

 

[jesse]

I bet you're gonna love the Fusion, Kent; I have friends who drive a Fusion Hybrid, and it is stupidly nice, and darned near manufactures its own fuel.

I haven't driven the Hybrid, but the Ford Fusion rentals I've had are without a doubt one of the nicest "new" cars I've driven.

 

[Bill]

Yeah, but Honda Accords are notoriously boring and reliable. Your F150 seemed to have been owned by my mother before.

That is why I like to buy new and then keep forever. It keeps Ted's mother out of the loop.

Jesse, my 2001 F-150 is as reliable as the sun coming up. But, it's only been touched by a mechanic once, at 11 years it needed rear axle seals and I didn't have time to pull the axles myself. That is the only "repair" the truck has needed, everything else has been routine mx in my own garage.

I drive the thing like a 5200# sportscar, too. It hasn't been babied but just keeps on going. Best vehicle I've owned.

 

[JoseCuervo]

It's actually the disability insurance that I care about, but it's not available without the life insurance. I work for myself, and the car loan would be one less thing to worry about if I were to get laid up. And if I die, someone in my family gets a free car out of the deal.

The premium's less than $8.00 / month. If that's the worst financial decision I ever make, I can live with it.

Thanks for your advice, though, especially considering that I never asked for it. That was very nice of you.

Rich

If you need disability insurance, a real insurer like Aflac is likely a better option than the add-on product from a car loan.

Like I said, your amounts are likely not significant and if they give you peace, they are the way for you, but likely not good for most people who look at financial decisions in a more logical dollars/cents type of manner.

 

[denverpilot]

Yeah, but some manufacturers, like Ford, make part of the rebate contingent on financing with their captive finance company. Right now on F-150's I think it's $1000.00! So, we have people finance a minimal amount, $7-8k and pay it off at the first payment, doesn't make us any more money, but it saves them $950.00 or so.

Gotta be careful and watch them with that thinking. $1000 is only 2.5% of a $40K truck.

Often their percentage will be higher on the loan than ANY credit union, so if you're not paying it off immediately, they're making that rebate back plus more, easily.

Always compare bottom line to bottom line. Often a $1000 rebate is a sucker bet that you'll not do the math. Not always. But most of the time.

 

[N747JB]

I don't think you can get a manual transmission in any Ford truck now! We sell a couple Mustangs and a few Focus with manual transmissions, but they are the exception these days, most people can't or won't drive them!

I think the 5-speed has gone the way of the dinosaur.

 

[Bill]

I don't think you can get a manual transmission in any Ford truck now! We sell a couple Mustangs and a few Focus with manual transmissions, but they are the exception these days, most people can't or won't drive them!

I special ordered my 5.0 Premuim with 6-speed manual, track pack, and Recaro seats as the only options. It's a nice car.

 

[denverpilot]

I think the 5-speed has gone the way of the dinosaur.

Yeah, the automatic in use at the time was too weak for my application, the guys using them were going through them every 20,000 miles, it needed a 5 speed, and I ate one of those around 100,000. Now all the manuals are 6 speed.

The Dodge 5 speed has a nasty habit of losing 5th. The automatic they were using in Gen 3 trucks also was weak and needed lots of add on cooling. The prior generation (like mine) the 6 speed NV5600 was an option and its a tank but has some well known problems also and had parts availability problems when NV went away. The aftermarket has since fixed that but it's still a $2500 rebuild just in parts.

Can tell it's been a while since Henning looked. The manual is no longer even an option from Dodge. And they never did a manual six speed after the five, so no idea where he's coming from there.

Everyone is crossing fingers that the pairing of the Cummins 6.7 to the new Aisin automatic is going to finally be something that can keep up with the Duramax/Allison combo. Unfortunately at a similar price tag.

 

[denverpilot]

P.S. Another interesting side effect of driving a truck with a manual and an exhaust brake...

The automatic drivers can't figure out how you're slowing down in front of them without your brake lights coming on.

 

[Bill]

P.S. Another interesting side effect of driving a truck with a manual and an exhaust brake...

The automatic drivers can't figure out how you're slowing down in front of them without your brake lights coming on.

On the motorcycle I sometimes tap the brake lever during engine braking just so they know I'm slowing down.

 

[JoseCuervo]

I don't think you can get a manual transmission in any Ford truck now! We sell a couple Mustangs and a few Focus with manual transmissions, but they are the exception these days, most people can't or won't drive them!

There is a whole generation of kids nowadays that have no idea what the 3rd pedal is for. They all think the "manual" mode on the auto transmission is what "shifting" is.

Once in awhile I ask someone to go grab a PU, and they call back, unable to drive.

Even the little Ranger-type pu's are disappearing, and they were the easiest thing to teach a kid to drive.


(As a side note, the dumbest thing Ford has done in a long time was discontinue the Ford Ranger. There are some commercial applications where those trucks were amazing and saved/made money for their operators. I have 6 of them running, some with 280k miles, they just keep rolling, and save a ton of money over full size PU costs for some tasks.)

 

[N747JB]

Of course, when people are planning on paying the loan over time, it's often better to finance it at a lower rate than Ford offers and forgo the extra incentive. For people paying cash, it makes sense to pay a month's interest on a minimal amount to get the extra $$ in most cases. For long the long term it is very often better for the customer to pay 2.5% and give up the $1000.00 vs 4.0% through Ford credit, each deal is different and we generally try to show the customer the options that they qualify for.

Gotta be careful and watch them with that thinking. $1000 is only 2.5% of a $40K truck.

Often their percentage will be higher on the loan than ANY credit union, so if you're not paying it off immediately, they're making that rebate back plus more, easily.

Always compare bottom line to bottom line. Often a $1000 rebate is a sucker bet that you'll not do the math. Not always. But most of the time.

 

[JoseCuervo]

The Dodge 5 speed has a nasty habit of losing 5th. The automatic they were using in Gen 3 trucks also was weak and needed lots of add on cooling. The prior generation (like mine) the 6 speed NV5600 was an option and its a tank but has some well known problems also and had parts availability problems when NV went away. The aftermarket has since fixed that but it's still a $2500 rebuild just in parts.

Can tell it's been a while since Henning looked. The manual is no longer even an option from Dodge. And they never did a manual six speed after the five, so no idea where he's coming from there.

Everyone is crossing fingers that the pairing of the Cummins 6.7 to the new Aisin automatic is going to finally be something that can keep up with the Duramax/Allison combo. Unfortunately at a similar price tag.

I don't buy Dodge diesels, so I wasn't sure on Dodge, but I knew the 5spd was gone, and thought Dodge made a big deal about only offering Auto transmissions. My SuperDuty diesel has an auto, and it works fine.

On the other hand, my diesel mechanic won't let me buy big trucks (Freightliners, Kenworths, etc) with auto transmissions. He sees too many dissatisfied owner/operators of those. That being said, I think the line drivers that just use "steering wheel holders" for drivers are loving the Auto transmissions on commercial trucks.

The times, they are a changing.

 

[RJM62]

If you need disability insurance, a real insurer like Aflac is likely a better option than the add-on product from a car loan.

Like I said, your amounts are likely not significant and if they give you peace, they are the way for you, but likely not good for most people who look at financial decisions in a more logical dollars/cents type of manner.

Peace of mind is exactly what it comes down to, as is the case with most non-mandatory insurance when you come right down to it. It even factors into mandatory insurance (auto, homeowners, etc.). For example, it's why I recently switched back to USAA from a company whose premiums were lower, but whose claims department hails from the deepest pit of hell. You get what you pay for.

In my case, my general disability insurance doesn't cover my full income. Having the car loan covered separately would soften the hit. As for the life insurance on the loan, it would make paying off the loan one less thing my brother would have to do upon my demise. I also have young relatives just turning driving age, so he'd have no problem finding a new home for a paid-up car.

For the trivial premium that the CU charges for the insurance, it works for me in my current situation. For others, not so much.

Rich

 

[Ted]

That is why I like to buy new and then keep forever. It keeps Ted's mother out of the loop.

That is probably the best reason for buying new. After driving the Infiniti without oil for 200 miles, I took away her driving privileges. Car had maybe 20k miles on it, basically new. Then there was her Volvo before that. At 35k it looked like it had 335k.

I will say that I think future vehicle purchases will be under 100k on the clock. That seems to have worked much better for me, I think because I'm easier/nicer to cars than most.

 

[Speed]

There is a whole generation of kids nowadays that have no idea what the 3rd pedal is for. They all think the "manual" mode on the auto transmission is what "shifting" is.

That and power steering... I had a beater airport car (90's Aspire) that didn't have power steering. I took it in for an oil change and the kid tried to tell me how bad my power steering was and that I needed a new pump ASAP or it wasn't going to steer anymore. I tried explaining to him it didn't HAVE power steering but he wasn't buying it. Finally got him to get his manager who apologized and said the guy had never seen a car without power steering. I asked, so if I had agreed what the heck would the tech have done? Sold me a pump and not install it? I did get a free oil change out of it, not that I ever went back to that shop to collect.

 

[Henning]

There is a whole generation of kids nowadays that have no idea what the 3rd pedal is for. They all think the "manual" mode on the auto transmission is what "shifting" is.

Once in awhile I ask someone to go grab a PU, and they call back, unable to drive.

Even the little Ranger-type pu's are disappearing, and they were the easiest thing to teach a kid to drive.


(As a side note, the dumbest thing Ford has done in a long time was discontinue the Ford Ranger. There are some commercial applications where those trucks were amazing and saved/made money for their operators. I have 6 of them running, some with 280k miles, they just keep rolling, and save a ton of money over full size PU costs for some tasks.)

If they go to Europe, they will be very limited in rental cars. It's not that difficult of a skill to master, I used to teach people on the test drive selling them their first stick. Lock up torque converters have reduced the advantage of the manual Trans, but you still have to feed the hydraulic pump energy.

 

[RJM62]

If they go to Europe, they will be very limited in rental cars. It's not that difficult of a skill to master, I used to teach people on the test drive selling them their first stick. Lock up torque converters have reduced the advantage of the manual Trans, but you still have to feed the hydraulic pump energy.

Now that so few people know how to drive stick, it's apparently becoming a new measure of coolness among the high-school set. There are three beginning drivers in my family competing for my manual transmission instructional services.

Part of the reason is that my stick shift skills are legendary (seriously -- anyone who's ever ridden with me henceforth held me up as the gold standard of driving stick), and part of it is that I'm the only adult in the extended family who currently owns a manual transmission car. That's pretty sad, in my opinion.

I agree that advances in automatic transmission design have reduced the advantage of manual transmission for average drivers. But drivers who really understand the art and science of driving stick can still capitalize on the extra degree of control it gives you. I've never owned a manual transmission car in which I didn't beat the official MPG estimates by at least 10 percent -- usually more.

And then there are the complexity and reliability issues. There are just fewer things to go wrong on a manual transmission. With skillfull use and attention to things like rev-matching, modern clutches should easily last in excess of 150,000 miles. The last one I had changed had 176K on it.

Rich

 

[jsstevens]

Now that so few people know how to drive stick, it's apparently becoming a new measure of coolness among the high-school set. There are three beginning drivers in my family competing for my manual transmission instructional services.

Part of the reason is that my stick shift skills are legendary (seriously -- anyone who's ever ridden with me henceforth holds me up as the gold standard of driving stick), and part of it is that I'm the only adult in the extended family who currently owns a manual transmission car. That's pretty sad, in my opinion.

I agree that advances in automatic transmission design have reduced the advantage of manual transmission for average drivers. But drivers who really understand the art and science of driving stick can still capitalize on the extra degree of control it gives you. I've never owned a manual transmission car in which I didn't beat the official MPG estimates by at least 10 percent -- usually more.

And then there are the complexity and reliability issues. There are just fewer things to go wrong on a manual transmission. With skillfull use and attention to things like rev-matching, modern clutches should easily last in excess of 150,000 miles. The last one I had changed had 176K on it.

Rich

Yes, yes, yes!

I insisted that all of my kids learn to drive a stick whether they ever want to own one or not. My oldest son opted for a stick in his 350Z. My oldest daughter will never own one (she says) and wouldn't voluntarily drive one today but she acknowledges that she could. My younger son doesn't really care. He has an automatic because that's what he could get for what he had to spend. And my youngest daughter hasn't started to learn yet. But I will teach her how.

I never want one of them to say "I can't drive that."

Mean dad.

 

[Ted]

You're a good mean dad. My kids will know how to drive stick, change their oil, and change a tire. Oh, and land an airplane.

If they're done with the garage (and hangar) after that, their choice. But not until they know those.

 

[jsstevens]

You're a good mean dad. My kids will know how to drive stick, change their oil, and change a tire. Oh, and land an airplane.

If they're done with the garage (and hangar) after that, their choice. But not until they know those.

Yep. All that. (Well the landing the airplane part, not yet. I'm no CFI.)

John

 

[RJM62]

Yep. All that. (Well the landing the airplane part, not yet. I'm no CFI.)

John

You don't need to be to teach pinch-hitting. The time simply won't count for anything -- except maybe saving their lives some day.

Rich

 

[Ghery]

My son drives a 1999 Mustang. Yup, with a stick. My daughter never learned to drive a stick. Her loss. I haven't had one in a great many years. I got the automatic in my 1999 Jeep Wrangler because I had determined that I needed three hands when driving the old Ford Escort. One for the wheel, one for the stick and one to hold the ham radio microphone. But I only have two hands. Hence the auto on the Jeep.

 

[Henning]

It's hard to run a meth lab in the back seat and shift as well.

 

[airdale]

Interesting OT discussion. I didn't know that manual transmission skills were all that rare.

My wife prefers sticks and recently bought a 6-speed Mini to replace her 5-speed Audi TT. (BTW the automatics in those Minis are really awful.) She told me that her friends are amazed that she downshifts and uses the engine for braking. She's pretty good, but she doesn't double clutch downshifts like I tend to do. In a street car with synchro rings that's kind of silly but it's an old habit from racing gearboxes and I kind of like doing it.

We have some friends whose daughter's first "car" was an early 1960s Ford pickup, three on the tree. I'm not sure how hard they pushed to get her into that tank, but she's learned to work on it. Even changed out the radiator herself! Fantastic parenting skills = great life skills for her! She's not afraid of anything.

 

[pilot_dude]

While I know that a lot of people make car payments that blows me away. Over 9% interest rates??? Someone would actually knowingly sign up for a loan at that high of a rate?

Also, 12% return on mutual funds? I would like to know which fund that is...

Back to the subject at hand though, what's wrong with spending $6000 on a car that's a few years old but it good shape? Some of those will last you a decade with minimal repairs? Just go find some car enthusiasts and they'll tell you what lasts forever and what doesn't.

Anyway this whole notion of a car payment just continues to blow my mind. It's a terrible terrible deal I don't see why anyone would do it.

Winner!

 

[pilot_dude]

Sounds like you worked for a "Bill Heard" type of dealer *snip*

Shudder

 

[35 AoA]

On the motorcycle I sometimes tap the brake lever during engine braking just so they know I'm slowing down.

I do the same thing with my M3's. Insurance against road rage or (more importantly) someone accidentally rear ending me.

 

[denverpilot]

Now that so few people know how to drive stick, it's apparently becoming a new measure of coolness among the high-school set. There are three beginning drivers in my family competing for my manual transmission instructional services.

Part of the reason is that my stick shift skills are legendary (seriously -- anyone who's ever ridden with me henceforth held me up as the gold standard of driving stick), and part of it is that I'm the only adult in the extended family who currently owns a manual transmission car. That's pretty sad, in my opinion.

I agree that advances in automatic transmission design have reduced the advantage of manual transmission for average drivers. But drivers who really understand the art and science of driving stick can still capitalize on the extra degree of control it gives you. I've never owned a manual transmission car in which I didn't beat the official MPG estimates by at least 10 percent -- usually more.

And then there are the complexity and reliability issues. There are just fewer things to go wrong on a manual transmission. With skillfull use and attention to things like rev-matching, modern clutches should easily last in excess of 150,000 miles. The last one I had changed had 176K on it.

Rich

Teach 'em to double clutch and rev-match when downshifting... They'll be the coolest kids on the block. Heh heh. Everything old is new again!

The diesel is a PITA to rev-match unless you watch the tach closely. Each gear on mine other than 1st to 2nd, is a 600 RPM difference, but the diesel turns so slowly that it's hard to do it by ear.

I got in Karen's Lincoln LT last week to cart the doggies around in it and laughed at myself when it downshifted on a hill and wrapped itself up to 4000 RPM and my foot came off the accelerator thinking I'd over-reved it badly. Heh. Oh yeah, gas V8...

Not the diesel with a 3200 RPM redline that sounds like it's screaming at anything above 2800.

I managed 21 MPG measured in the diesel last month when the weather was nice, no A/C nor any other climate control needed other than a window down, and driving it like a grandpa.

A one ton dually, and I got over 20 MPG, measured every fill up, and it didn't have any spikes in the data.

Best I could do in her slushbox V8 was 17 MPG.

I did stop matching revs without the clutch on up shifts in the diesel though... The synchros in the NV5600 are not happy with that, from additional research.

 

[Bill]

We have some friends whose daughter's first "car" was an early 1960s Ford pickup, three on the tree.

When I was growing up a kid in the neighborhood bought an old Plymouth Duster (Ruster?) with 225 slant six and three on the tree. He was the first stick driver in that family, and after the second clutch in a month, they asked my Dad to drive it.

He told them it drove fine, and they asked him to ride with the kid. Turns out the kid was starting off in 3rd, shifting to 2nd, and then back to third. Dad taught him where 1st was and how to get there.

Dad taught me how to drive stick on both 4 on the floor and three on the tree. Biggest tips for three on the tree:

1->2 upshift and 2->3 upshift always palm away from you.

3->2 downshift was palm away from you, but the trick was always do 2-1> downshift palm TOWARD you. Same for engaging reverse, always palm toward you. If you did this, you wouldn't grind the gears. For some reason, trying to engage 1st or reverse palm away always resulted in grinding gears.

I drove an old 1960 Plymouth Savoy 225/3 tree for many years, it was quite a simple car.

 

[Bill]

While I know that a lot of people make car payments that blows me away. Over 9% interest rates??? Someone would actually knowingly sign up for a loan at that high of a rate?

Not only that, but 84 month loans are now becoming quite common. C'mon, man! 84 months? Seven year car loan? That's NUTS!

 

[RJM62]

Teach 'em to double clutch and rev-match when downshifting... They'll be the coolest kids on the block. Heh heh. Everything old is new again!

That irony hasn't been lost on me, either. In an age where young people's whole lives have become automated and digitized, the ability to shift gears manually seems to be a status symbol -- at least judging by the demand for lessons. There are three kids in that age group in the family, and all three are eager to learn to drive stick.

Rich

 

[RJM62]

Not only that, but 84 month loans are now becoming quite common. C'mon, man! 84 months? Seven year car loan? That's NUTS!

Wow, that's extreme for a car loan. I didn't even know you could do more than 60 months.

I finance loans in general for roughly double the term within which I actually intend to pay them off because I'm skeptical about the economy. But 84 months for a car loan is waaaay out there. The rates for a term like that must be astronomical. Also, taking out a loan whose term extends beyond the car's warranty wouldn't sit well with me at all.

Rich