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Discussion Starter · #1 ·
Well, the deals posted by Volvo this month have me considering a swap. Our regular readers will remember we have 'planned' a trip late next summer to celebrate my 'zero' birthday with the OSD of a '14 XC60. The thought of a new vehicle NOW is hard to dismiss. Our '10 has >55K miles, new tires and is running fine; BUT, I could sell it, free up some cash and lease a '12 under the Summer Savings program. We could run into a mileage problem down the road, but we'll fall off that bridge when we get to it. Hmmm...let's see...more HP(maybe even an R-design), NO fogs, shiny new color?, jazzy interior, faster liftgate...that pesky Sensus thing...

Oh, yeah...Safe and Secure!!!

Dang! Too much to think about. I need to drop by the dealer to see if a center grill badge is in...MAYBE I'll swing by the showroom....:D

What to do....what to do????:confused:
 

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Leasing is never a good financial decision, just my opinion. "Freeing up cash" is all relative because you are decreasing your net worth significantly for immediate satisfaction.

Just my opinion.
 

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Go to OSD a year early is my suggestion. The trip is totally worth it!
 

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Discussion Starter · #4 ·
Leasing is never a good financial decision, just my opinion. "Freeing up cash" is all relative because you are decreasing your net worth significantly for immediate satisfaction.

Just my opinion.
Hey!...Don't be bringing reason and logic into this !!! ;) Even with a hefty down payment on the Summer Sales lease deal, I'd likely have about $20K to invest at a fair bit better return than the effective interest rate of the lease. Of course, THEN we're into a half-a-grand monthly lease payment, BUT...we'd have a shiny new vehicle, S & S, roadside assist, MORE horsepower! I'll sure miss those fog lights! :)

Our (only) local dealer(two locations) has about a half-dozen R-designs on hand from what I can find online. Couple of Ice White numbers that would match our C70...how weird would THAT be?... and the Saville(enough of a departure from our Electric Silver to feel 'new'). I actually filled out the 'sell us your car' online form and will be curious to hear what the offer is.

Our '10 is older than any vehicle we've owned in eleven years of marriage(3.3 years...we got the 11th one sent to the dealer in '09). The dealers like to see us and the folks who buy our 2-3 year old vehicles are happy as well! SOMEbody's got to keep this economy runnin'! Some days I feel like the 'first edition' XC60 could be in the family for a while; other times(like now) I think about new and shiny as the way to go ! Did I mention MORE horsepower, S & S, etc, etc. :) ;) :)
 

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Discussion Starter · #5 ·
dhorvath,
I've been reading the OSD threads...sure would be fun! Sure wish I knew what sort of new goodies might come on the '14. That could help me make my decision...OR...I lease now and take the OSD in three years!(wouldn't be a 'zero' birthday, but possibly a significant one-income wise)
 

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Discussion Starter · #6 · (Edited)
Me again...
I co-hijacked the 'Hitch' thread and thought I should post this here, instead...Some development this afternoon:

Dang...that '12 lease is looking a little better! Sales dude called back after receiving my 'sell us your Volvo' form all nicely filled out. Of course, they don't want to give me numbers over the phone(even though their email stated they would :
"This entire process can be conducted and finalized over the telephone from the comfort of your home or office."

That's OK...I know they want me on the floor so they can sell me another vehicle; BUT, I was very clear that selling MY vehicle was the reason for the inquiry. Naturally, the sales dude, even though he is the 'head guy', has to ask his 'manager' for the proper course of action.

This is all very interesting, especially as I believe the effective APR on a lease is under 1% right now.(Money factor ~.00035 ?)
It's nearly like a 1% balloon payment loan for three years except there's no obligation to buy(but the opportunity IS there) at the end of the three years. Four payments paid by Volvo, S& S for the life of the lease, MORE horsepower(did I mention that already? :) ).
 

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Discussion Starter · #7 ·
To continue bumping my own thread;) and offer a bit of an update, I'm more torn between the R-series and the T6. The R 'goodies' are a +/- sort of thing to me. Love the idea of the extra power...not so crazy about the tighter suspension and 20" wheels(and cost, since most of the cosmetic R goodies are 'take em or leave em' to me...no offense to R owners). Our '10 T6 suspension feels fine and the 18" wheels 'fit', IMO.

Looks like the Summer Sales program is working, as our local dealer(two locations, one owner) inventory is dwindling. Still a few R-series but also a number of apparently tricked out T6(close to $50K MSRP); however, the color selection is down to mostly black or white.

I don't want to jump in TOO quickly, but don't want to miss out, either. Dang!:confused:
 

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Ah c'mon coach, the R-design cosmetics are sweet! The body color lower molding alone is worth it, but it is such a complete package with the silver lower trim, larger chrome tail pipes, rear mirrors, etc. We also really like the center console treatment. I agree the suspension is too taught, but my switch to the regular T6 rear springs and shocks addressed most of our complaints there. I do also like the quicker steering ratio of the R-design which a lot of folks forget about. I will say the seats are a bit tighter on the R-design so make sure you are comfortable in them.
 

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Do the R-Design. But as the lease money factor (interest) is almost nil, do a zero $ down lease.
 

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Discussion Starter · #10 ·
Ah c'mon coach, the R-design cosmetics are sweet! The body color lower molding alone is worth it, but it is such a complete package with the silver lower trim, larger chrome tail pipes, rear mirrors, etc. We also really like the center console treatment. I agree the suspension is too taught, but my switch to the regular T6 rear springs and shocks addressed most of our complaints there. I do also like the quicker steering ratio of the R-design which a lot of folks forget about. I will say the seats are a bit tighter on the R-design so make sure you are comfortable in them.
Do the R-Design. But as the lease money factor (interest) is almost nil, do a zero $ down lease.
You guys are killin' me! :) For the Summer Sale, the 12s are movin' on out! I might run by there tomorrow and see what's what. Interesting that the sales dude never got back to me(needed to talk with his 'manager') with any sort of numbers on cashing out our '10. That's pretty laid back, I'd say. I really wish I could perceive a huge difference going to the '12 from the '10 and the R-series offers 'some' of that. It's still essentially the same very nice vehicle(non R, that is) we've enjoyed for 3+ years...it's not like they've re-invented the wheel(so to speak).

Maybe I should take a midnight spin in the top-down C70. ;) Might help me think more clearly...or not! :) With this screwball economy, my fiscally responsible side keeps creeping into view.

Zero down, three year lease on a $50K vehicle...THAT payment would open my eyes!!!
 

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AND I REPEAT LEASING IS NEVER A GOOD IDEA.

Its people like you that I love, actually. You buy a new car at $53k(-$4k incentives, sure!), break it in for 20k miles, then trade it in to a dealership where I am able to pick it up for $20k+ less than you paid.

Its people like you that save me from fiscal irresponsibility! ;)
 

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Discussion Starter · #12 ·
AND I REPEAT LEASING IS NEVER A GOOD IDEA.

Its people like you that I love, actually. You buy a new car at $53k(-$4k incentives, sure!), break it in for 20k miles, then trade it in to a dealership where I am able to pick it up for $20k+ less than you paid.

Its people like you that save me from fiscal irresponsibility! ;)
Don't I know it! When we traded our '04 V70(three years old when we switched to the RX330), a couple of people wondered why we were trading a 'new' car! Not a door ding on it! Not only do we take the hit, I maintain the vehicles like I'm keeping them forever. Before getting married over a decade ago, I had a couple of vehicles for over 125k miles. I got exactly what I paid for my Miata after putting over 40k miles on it! We just haven't been doing that since our first Volvo. As you can see in my sig, we've been through a few in the past 11 years. :)

A couple of things are different this time...S & S with roadside assist is worth about a grand a year, I reckon(our '10 is out of warranty and roadside ends next spring). Also, the effective interest rate for a lease through US Bank/Volvo is ~1%. I could make 3x that on the >$20K equity I could pull out of the '10 with virtually no risk(6x if I let our financial guy do his thing--and the world economy doesn't just plain collapse). Also, Volvo is throwing in another $1800 by 'making' the first four lease payments. I think the $1000 loyalty 'bonus' will fall through the financial cracks, somehow; but it's yet another spiff to get us into the showroom.! These Volvo marketing guys are no dummies! :)

None of that actually justifies having TWO vehicles worth north of 45 grand in the garage!

One wrench in the decision-making process is the fact that a leased vehicle(through US Bank) is covered by S & S only for the term of the lease. IF we should fall in love with the new XC and decide to purchase at the end of the lease, losing two years' worth of S & S wouldn't make us happy.

But you're right...we're spending more than we need to in order to drive something shiny and new. No gettin' 'round THAT! ;)
 

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Discussion Starter · #13 ·
AND I REPEAT LEASING IS NEVER A GOOD IDEA.

! ;)
I wouldn't say NEVER(I would NEVER say NEVER?). Doesn't apply to me, but some folks can snag a tax benefit from leasing AND there's a fair chance that the total lease payment would match the depreciation of the vehicle over the same period of time...AND you have the option of purchasing or walking away.

For someone like you, the perfect scenario would be having a friend or neighbor who is in a 2-3 year lease about to expire(the lease, NOT the friend) and you offer them $500 to sell you the vehicle rather than turning it back in. On something that sells for >$50K, the disposition fee plus another few hundred dollars would still put you thousands below 'dealer retail' for the vehicle. I'll admit it's a little far-fetched, but it could happen IF you found that 'one in a million' vehicle driving past your house every day! ;)
 

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Discussion Starter · #14 ·
Didn't want to go a day without an update, ;) ...a wrench has been thrown into the works...DW had a bit of a 'dust-up' with a Subaru in yesterday's bumper-to-bumper traffic. She was driving our '11 C70 and mangled the driver front quarter panel severely. The initial body-work estimate is $3500 but the estimator said the left front wheel was impacted and there would certainly be additional internal damage apparent once the bumper is removed.

As my Grandmother used to say: "If it ain't one thing, it's a dozen." Stay tuned.
 

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DW are such a pain sometimes... mine has the XC today, I fear every day it will come back hurt...
 

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DW? Designated Wench?
Careful boys!! I too wondered what "DW" stands for. A couple of observations- you CAN sell a car through Carmax. I know at one time they were desperate for XC60s. Worth a shot. Also, I don't know a dealership that wouldn't work to find you the car you want. Don't get so caught up that you think you have to choose what's on the lot you've been looking at. You know this. Don't know what that salesman is up to - maybe TRYING to whip you into a frenzy??

I'm with David, though. The OSD experience is SO UNIQUE that if you can eek out the months between now and then, do it. You get EXACTLY the car you want down to the last detail, an incredible trip, the fun of planning, deferred gratification TWICE, can't beat it!!:D
 

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Discussion Starter · #18 ·
D arling W ife, y'all :) .

I may go the CarMax route, but the Volvo dealer was kind enough to solicit my business. HOWEVER, this C70 snafu has me at a standstill for now. I reckon it's possible they would total the car if the internal damage is great enough(front angle impact on a FWD vehicle!) The insurance adjuster should be there today or tomorrow and I've authorized them to 'tear down' the vehicle as needed. Yikes! I had no idea we might be replacing the C70 before the XC60...dang!!!
 

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AND I REPEAT LEASING IS NEVER A GOOD IDEA.

Its people like you that I love, actually. You buy a new car at $53k(-$4k incentives, sure!), break it in for 20k miles, then trade it in to a dealership where I am able to pick it up for $20k+ less than you paid.

Its people like you that save me from fiscal irresponsibility! ;)
Rick, this is horrible advice. There is no "one size fits all" solution for vehicle purchasing. The counter is that you BUY things that appreciate in value and rent or lease things that depreciate in value. Statements like the above are usually made by people who don't know much about leasing and were most likely "hosed" because they did not get enough miles or had to get rid of the vehicle early or don't know how to calculate a money factor. Leasing is not for everyone, but if you understand how a lease works, it is a great way to only pay for the portion of the car you actually use. However - It is much easier to get taken advantage of in a lease if you don't understand all of the moving parts. Certain cars make good "leasers" and others don't because they have such poor residual values (usually american cars)....Volvos (from my research) make good leasers.

For me, I wanted the DW (your term!) to always have a new, reliable car under warranty with no maintenance bills or surprises and it worked out great for us. I get to get rid of the car just around the time it usually starts having problems or rattles, and we get another car...of course, you are always on the treadmill of car payments, but I'm not going to take 50 large out of the bank and sink it into a deprecating asset any ways, so we are most likely to always have payments with what ever vehicle we get. Our 2012 R design was somewhere around 50% residual value at 36 mod and 15k per year. Quite often the manufacturers subsidize the lease because they know at the end of the term you will be back at the dealer to get another car and they quite frequently waive the last few payments and the "disposition fee" to get you into another car.

Leasing is a semi-sophicitacted transaction and if you are not comfortable with it, it can be daunting. Also, if you plan to keep the car for a long time and you can pay cash you might be better buying. Don't write if off until you completely understand how it works.
 

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In response to above^^, lets do the math (I am an engineer and financially VERY savvy)

Lets look at the next 10 years and our net worth. We both start with 30k, and you lease and I buy:

I pay $30k cash today for my ALMOST 2 year used car that stickered for 52k in october of 2010. Now I have warranty through October of 2015 and I have no car payments. I get to do with my car whatever I want, I get to drive it more than 12k miles if I want, and I get to write off the asset each year on my tax return. After october of 2015, I have to pay to maintain my car. Oil change 3x a year in my driveway is $150, lets say I find a total of $500/year of maintenance issues (which is crazy high), my car depreciates to 2020, where it has 120k miles (if i limit to 12k/year), and is worth 15k. I have towing through my insurance for free, and lets say the volvo dies once, stranding my wife for a few minutes while she makes a call. YIPES! My total loss is $30k-15k = 15k, plus maintenance for 7 years at $3500. Total loss: $18,500, meanwhile I am driving free, dont have to worry about monthly costs, it costs me literally nothing. I am taking my $500/month and investing it in a means of investment with a ROI of 8%, which I have had no problem finding. My final worth is 92.5k-18.5k is $74k. Even if my car was WORTHLESS at the end (which it wont be) I am up $62.5k.

You lease a new car every 3 years. Terms vary of course, but lets go with the sticker of $52k for a loaded R-design such as Mrs. Rizzo's. You lease it for $500/month (GOOD RATE IMO) with a down payment of $5k (we can feel free to insert numbers from your lease here). So you on day 1 invest the other $30k-$5k= 25k at the same ROI of 8%, except you have to take out $500 each month for the car payment. You drive a new car, no maintenance, but no asset. At the end of the 6th year you cant even make a payment anymore, because you have driven a new car the whole time and carried over payments. You will literally not be able to make payments in the 6th year. So add in the incentives or whatever, and you are still cashless and assetless after 7-8 years, meanwhile I am well on my way to buying a porsche (or used Ferrari, etc.) with cash. *EDIT* This doesnt even take into account that at the end of year 3 and 6 you still have to come up with $5k for a down payment, which makes your account go to 0 after less than 5 years, not even through your second lease. ALSO this does not take into account any fees upon returning the car in sub-excellent condition (scratches, door dings etc.) which the dealership essentially just determines the price for, so maybe add in a few hundred to 1k per return in there...

Please inform me where leasing a car is a better financial decision than buying? I am sorry but to try to convince someone that leasing is a better investment is better than buying is a joke coming from this guy.

Kevin

*Edit 2: This does not account for insurance increase in not owning the car outright, writing off the car on taxes, inflation of the dollar each year, and other minute differences.

*Edit 3: Comparing NEW to NEW, financing 22k over 5 years (keeping car for the long term) at current rate of 2.79% puts it at 393.26 payment monthly. So you contribute monthly $500-393.26= $107, thus the difference will net you $19,705 after 10 years.
 
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