Wheels
August 15, 2007
Last week I was fortunate enough to find a base-model, 2007 Jeep Grand Cherokee on the lot of the local dealership. Actually, fortunate isn’t probably the best word. Most dealers have upwards of 80 Grand Cherokees in various trim packages. The incentives will probably be better next month, but I was running out of time, and I know that the base-models are usually the first to disappear when the incentives start to get heavy. Combined with a Chrysler Employee discount (to which I’m not entitled) which the dealer applied to pay off the remained of my old lease, I was able to walk away with this one for just slightly more than I was paying for a 2005 Liberty. It’s a lot more car - even the base model has options that I didn’t have on the Liberty, like power seats, compass & thermometer, mp3 input jack, etc. And I purchased additional mileage up-front this time, so that next time around, I won’t be faced with the threat of onerous over-mileage charges at lease termination. I didn’t go over this time around, but with 5 months left on the contract, I only had about 1,000 miles to spare.
To top it all off, because of the steep incentives and the lease-loyalty discount, the lease-term purchase price for the Cherokee is only slightly higher than it would’ve been had I decided to buy the old Liberty. Because of this, it will be cheaper to make 27 lease payments, and then to purchase the residual than it would’ve been to purchase it new off-the-lot, last week.
In two years though, I’ll probably want another upgrade.
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I usually upgrade every four years or so. I always buy because I like the equity. I don’t like mileage restrictions, either, but that’s irrational. I’ve had my car for almost 5 years and I have 36k miles. My last car had 34k after 4 years.
I don’t bother to run the numbers on a lease. I should, but I like owning. After almost 5 years, I have a lot of equity in it. When I sell it for something new in the next few months, I’ll pay off almost half the cost of the new car. It works for me.
I’m averse to making a down-payment on a depreciating asset, which is unfortunately the only way you can finance a vehicle without making enormous monthly payments. Running the numbers, I’d save $5,000 over 5 years if I decide to purchase at lease termination as opposed to financing it outright. But I probably won’t buy it, so the point is moot.
Also, You’d have more equity in your bank account if you settled on a significantly smaller lease payment, and accrued interest on the difference.
with 5 months left on the contract, I only had about 1,000 miles to spare.
That’s what scares me. My girlfriend is in that situation now and she doesn’t want to trade it in because nothing else on the market excites her since VW has taken the Jetta backwards significantly in three model years. She’ll have to go to something she doesn’t like or buy her car outright. I don’t like that balance of choice.
For me, when I look at leases, I think (not the best analysis) it has at least a bit to do with the make of cars I buy. I’ve owned 2 Jettas since ‘99 and am planning on buying a MINI. My cursory look at the numbers didn’t appeal to me for a lease.
When my girlfriend leased her car, we were smart enough to run the numbers on a diesel and a regular. It was impossible to save enough money to justify the extra cost. Strangely, though, her lease payment is the same as my payment. She didn’t put anything down while I put $1,500 down.
That thing just doesnt look right without a roof rack, not that I would find it a deal breaker, I just dont think I have ever seen an SUV without. By the same token my explorer has one and in 6 years with the car, I have never used it once nor see a need to ever use it.
Most of that stuff - roof racks, fog lights, etc., are much cheaper on the after-market. If I ever decide I need one, I’ll worry about it then - but in three years I never used the rack on the Liberty.
Yes, it seems like something that would rarely if ever get used. I mean even on vacations I cant see a family piling their luggage on a roof rack. I never recall doing that.