[A4] Prospective A4 Buyer

[Rocky Mullin]

At 4:22 PM +0000 7/7/06, docwyte at comcast.net wrote:
>You're going to lose money period if you get a new car every 3 
>years, even leasing.  In your example you lose $12k every three 
>years, including (especially including the $3k you blow as your 
>downpayment), whereas if you just took that $12k and bought a car 
>and drove it for those same three years I suspect you could sell the 
>car for around $9k, if you buy right.  So you've lost $1k a year.
>
>Yes, you don't have a shiny, brandy new car, but financially you're 
>FAR ahead of the game.

	not if you figure service and repairs into the mix.   and you forget
that i do want a shiny new car.  i don't think owning them makes sense, see
my previous emails.

>
>If you insist on having a brand new car every three years and having 
>to have the latest and greatest and don't mind throwing away $12-15k 
>in that period of time (just wondering how is that different than 
>suffering with depreciation?

	it's the same.  that's the point.  you lose money either way.
since leases work for me, i lose the same (or less, by my calculations)
and won't get stuck having to sell the car, nor with having to spend a
bunch of cash up front and hope to recover it later.

>A $35k car brand new generally sells for $20k plus after three 
>years) then leasing is a good option.  It gets you into a car that 
>you generally wouldn't be able to afford.

	another good reason :)

>
>That last word is the key, affordibility.  If you have to make 
>payments, then you *can't* afford the car!

	that's not how it works.  well it might work for you, sure, but
few americans walk in and drop $20-$50k on their car.  your assertion
sounds just as absurd to me as "if you have to make payments, then you
can't afford the house!" probably sounds to you.

>You can't predict what cars will hold their residual values well.  I 
>bet the Mini's dive in value in the next few years, as their newness 
>and cuteness wear a little thin compared to their utility.

	well, you can't predict their true resale *value* well.  you 
don't *need* to predict the residual value in a lease because that is 
negotiated
and contracted in writing at lease inception.  you're agreeing in advance
on what it's worth when you give it back (or choose to buy it).

>
>As far as gas powered cars being dinosaurs and the market collapsing 
>in favor of diesel, I very much doubt that will happen in any kind 
>of way that makes a person leasing a car in the financial drivers 
>seat vs someone who owns their vehicle.

	on a two year or three year lease, perhaps not.  but i plan to keep
leasing cars, so chances are very high that changes will happen.  TDIs are
nearly here, audi should be importing bi-diesels by '08 or '09.

	the real proof though - where were gas prices four years ago?  how
much has *that* changed?  have prices been, say, steadily going up?  what
are the predictions for gas prices in the next 2, 3, 5, 10 years?  have you
seen any examples where gas prices have effected the auto market?  for
instance, sales of low-mileage cars falling (they did) and therefore the
resale prices drop?  how about examples of innovation and availability of
alternative fueled vehicles?  also, just in the last 4-6 years, the changes
in this realm have been great.  i'm glad i'm not stuck making payments in
a ford explorer now that the hybrid is out now.  it's good for you that you
can pay cash for all your cars - i paid cash for my 2000 A4, plus a five
year extended warranty.  $38k to $10k when i sold it.  most people can't
or won't drop that kind of cash on a vehicle, financing is the lions share
of the car market.

>
>If we're looking at this from a purely financial standpoint, it's 
>clear that you need to buy car at the bottom of it's depreciation 
>point.  That means picking something up that's generally 10-15 years 
>old.  If you're unwilling to do this, then you're going to lose 
>money on a car, whether you lease or buy.  I just don't think that 
>leasing is any more superior than buying as far as what you're going 
>to spend.
>

	good points in there, except the last line.  ultimately, it's
subjective.  leases are *clearly* superior for me, and just as clearly
wouldn't work at all for you - high mileage, cor modding, etc.

-- 
  Rocky Mullin 

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