AggieLS

Need some advice from folks who are better financial wiz's than I am.

Currently have reached decision that I should replace my owned '98 GS300 with 89,500 miles ($14k est value) on it with an '04 LS430 Custom that we would either lease or buy. I'm leaning toward lease so that it would be returned when new '06/7 LS hits the market in 36 months.

Spouse has a '01 leased MDX that will come off lease in mid Sept with 36,000 on it. Residual on her lease is $24k, $13k was put down on the MDX up front (I know that was not the best decision but timing then required it) and we are undecided as to turn in or buy out of lease. She'd prefer to get new Toyota Sienna for space and safety upgrades (VSC, side curtains, etc.) but is relucantly willing to buy her MDX if that is best decision.

Need any and all thoughts regarding options and best financial point. Have access to $50k, 5% equity line that can be used.

1) Lease LS now, sell GS and buy MDX in Sept with proceeds from GS sale.
2) Sell GS, buy Sienna now for spouse, I drive MDX till lease expires and then lease LS in Sept.
3) Sell GS, buy LS now and buy MDX in Sept.

Any and all thoughts or ideas welcome as I hate to be in this situation. Wife has suggested I should not be attracted to earthly possessions and that a Chevy would do. Dog house is being prepared for me to sleep in based on my response which was unprintable in public forum.

She also questioned why I needed new LS as my GS is in good shape but when the bug bites, the itch must be scratched.

Thanks all.

99LS400

It really depends on the person as to which is better. You are presently in a lease so you have a head start and know what leasing is all about. Leasing is not for everyone. Most people lease for 2 reasons, they want that new car every 3 years or they want to keep the payment in their budget.

A lot of people think that leasing is like renting a car, you never own it. If you really take a look at it financing is the same way (until paid off) the bank owns the car until the last payment.

As far as your situation; it is ultimately up to you.

If you are really feeling the itch and are planning on getting the 06/07 LS than a lease is probably the best scenario. Just throw the keys and pick up the new model.

If you plan on keeping the car for a while than leasing is not the best - you will ultimately pay more on a lease than on a conventional finance.

Kansas

AggieGS,

There is a 3rd option that most people seem to think is unattainable but which is much less expensive than financing or leasing. My wife, fortunately a CPA, (OK, I have a minor in Accounting) and I have have been doing this for most of our adult lives. That option is to pay cash for cars - establish "car accounts" (either separate accounts or "virtual accounts" in a larger money fund that you track in a spreadsheat or perhaps with MS Money or Quicken) and then make month payments to yourself to these accounts which you will eventually use to purchase a car.

Secondly, keep a car as far past its depreciable value as you can stand A wonderful aspect of Lexus cars is that they can last two or three times their depreciable value.

Thirdly (and this was tough for me to learn), stop buying brand new cars. The LS400 I bought new in early 1990 (and kept for 13 1/2 years) was probably the last new car I will buy. A well cared for leased car can be an extraordinary value, especially in the current market where there is a huge oversupply of used cars. Last year I paid barely 40% (cash of course) of the new car price for a nearly flawless and very well optioned 2000 LS400 that had just come off a 3 year/36,000 mile lease. It was about the price of a new Camry XLE. Let a lessee "eat" the biggest part of the new car depreciation.

Fourthly, buy the old model after a model change. Keep driving your GS300 and start saving now. When that "06/7" LS900 hits the market, buy a 2003 LS430 (pay cash of course) that has just come off lease. The price of the 2003 LS will take a bit of a dive when that new 06/7 LS900 comes out so you might as well use the situation to your advantage. Your savings will be huge and you will be free of debt.

The odd thing about paying cash for cars is that it has made me even more conservative. It is one thing to spend a bank's money (when you finance or lease) but a far more sobering (and great) feeling when you write a $30,000 or $40,000 check and know that is coming directly out of your bank account, money market or mutual fund.

I know this may not sound like fun but it really is. One of the greatest gifts you can give youself and your family is the security that you can have by living below your income and becoming immune from the financial ebb and flow of the economy, illness and unforseen personal setbacks. The neat thing about doing this is that you actually end up with more stuff - not less.

I'll bet that is a lot more of an answer than you were looking for!

daryll40

I agree totally with the last post. I continue to "priss away" good money on new cars, but I always pay cash so at least I honestly know what I am doing. Leasing becomes "funny money". And you get into a cycle ("rut") that you never get out of. At least when you pay cash, you decide when you want/need/can afford a new car. It's about control.

But if I were REALLY doing it right, I'd do exactly as the last person posted...I'd buy 3-4 year old Lexi vehicles and drive them for another 3-4 or more years.

Daryll40

kjbro

Great suggestions! I also subscribe to the "own your car" philosophy and drive until death. I applaud your consideration of Lexus. My position is to buy/own cars with strong residual and/or life span, typically buy used, and drive until death. My last car was a BMW 320i that I owned for 20 years and put over 225,000 miles on. I purchased my Lexus under the same considerations....solid machine, lasting appearance, and high mileage capability.

I'm sure that the 04 Lexus might be nice, but why pay new when your position is to buy new again in a few years? How about buying a 95-97 LS400 for cash. Many people are amazed at the look/appearance of my 95 LS400 and assume the car is much newer. They further gasp, when I tell them I paid around $15,000. The money I save provides means to fund IRA, take vacations, and improve home.

Incidentally, we live a pretty debt free lifestyle. No car loans (3), no credit card debt, and ample emergency cash funds.

daryll40

I don't do debt and extravagant lifestyle either....the Lexus is my one indulgance, however.

AggieLS

Thanks everyone, you've given me some additional things to consider but boy oh boy do I feel that tug to get into an '04 LS430. Seems when I drive my GS I am beginning to hear noises and feel rattles/knocks and hesitation - I know all imagined to justify my desire to get a new one now.

usermel

The advice given to buy used is the best. Kansas hit the nail on the head. A Lexus dealership owner told me to buy used from my first new GS300 in 1998 to my last new leased GS300 sportdesign in 2002. Finally i went an listened to him and purchased a 2001 LS430 mark/nav. It was the best car decision i ever made. I let someone else eat the cost of ownership and paid $20,000 less than i would have if i had purchased new. But it is your choice just be sure your happy with it. Im happy with my used LS430. I talked to the owner of the Lexus dealership last week. I asked about the new 2004 he says that if you own even a 2000 or even 1998 LS not to trade up. He said cosmetics aside and the new six speed the quality hasnt changed. He said the new features like knee airbags and back-up camera are nice but wouldnt suggest someone break there bank for a new car for new features. Also i was told eventually the whole Lexus brand will be hybrid in the future. Got that info from the dealer owner but will protect there identity out of respect for info. At one time he suggested I just buy an Avalon or a Camary both with all options. He said the quality is the same in a loaded one of those Toyota's as it is in a ES300 or a GS300. He said Toyota sells all there cars to have high quality standards, no matter toyota or there luxury brand Lexus. He said its all about choice, by the way he drives a 96 LS400 and can drive new but said he choses used because being on the inside of the company he knows they are the same cars.

AggieLS

Well, after much wringing of hands and head scratching I have decided it will be best to lease an '04 LS and buy the MDX at end of it's lease in Sept. Then will sell the MDX next summer to get into more of an off-cycle between the two cars. Plus this will let us look at the new '05 Honda Odyssey this fall when it intros and compare it to the Sienna. If the Sienna has memory seats it would be an no-brainer decision. I'll sell the GS outright over the summer. Kids want me to save it for them for the next 2 years till they are old enough; not gonna happen but I can see a low hp Corolla, Scion or Civic in their future like my '62 Chevy Nova was for me.

Now to finalize color choice for the Custom pkg. Leaning toward Moonlight Pearl or Crystal White with Ecru or Black with Black. Spouse is interested is seeing the Saddle interior but from only pictures - I was not impressed. Although I like the similar color dash that it brings vs the Ecru's multicolor.

Thoughts anyone?

Gig'em Ag's

daryll40

There is NO WAY I'd put a kid in one of those "kiddie" cars. If you are wealthy enough to buy the cars that you do, don't do that to your kids. There are SO MANY big, hulking SUVs on the road today...the only way to protect yourself...your kids...is to give them some large metal to wrap around themselves too. Even if you wanna be an environmental whacko tree hugger PRIUS type person, you can't do it because EVERYONE ELSE is driving tanks. At the very least buy your kids a used Explorer/4 Runner or even Lincoln Town Car. The resale value of the Ford products is awful...which is to your advantage. The kids can beat them up without too much financial damage. But they are MASSIVE vehicles....providing the safety the kids need. Scion? Deathtrap!

SRK

Jim (Kansas) that was a great post. People forget that every car is a used car, they are only new on the lot, and they become used as you drive away..... Here in Canada there is another reason to buy used cars - the governments get a total of 17% in tax when sold new. Any saving in depreciation is further augmented by the reduced tax on the depreciated value. And if you buy used privately, one tax is not applicable, so it drops to 7% on the private sale. I figure the first owner of my car spent about 70 cents per kilometer in depreciation, in addition to all the other fixed costs and repair costs. I hope he had fun. I am having more fun I think.
Darryl makes a good point about safe cars for kids - my daughter has a Volvo 240 I bought for her. Not her first choice, but then I didn't ask her.....and she will have the myriad small bumps and lumps that all new drivers have parking and such, and it doesn't matter. Her friend put her late model Corrola off the road and the repairs cost twice what I have in the Volvo. The Town Car or a Crown Vic appeals a great deal too - kids only drive them as far as they have gas money, and that ain't too far....

Kansas

Regardless of what I said earlier in this post, how one spends his money all comes down to what makes a person happy. AngieGS may well make both himself and someone like me very happy. Maybe one of us can can buy Angie's 2004 LS at a bargain price when his lease expires. This would truly be a win-win situation.

I just returned last night after spending the last week driving an almost new (3000 mile) supposedly full size Chrysler rental car around the Pittsburgh PA area while listening to one its CV joints noisily failing. Gosh was it nice to get into my LS this morning and have a re****l drive to the office. Aren't these LS's great cars?

Daryl and SRK make important points about car size. My insurance agent tried (successfully) to scare the crap out of me when he showed me statisics on small cars after I bought a Honda CRX Si as a "fun car" in 1985. I kept the CRX for three years and sold it with only about 10K on the odometer.

I could hardly walk for days after getting rear ended in my 90 LS while sitting at a stop light. The car was out of commission for months and I felt like I had been kicked by a horse. I'd hate to think of what would have happened to me if I had been driving that CRX or another small car.

Now we never buy or rent anything smaller than a full size car.

AggieLS

Good points and I got a better idea from my boss today while driving his '04 XJ8 from Michigan back to Illinois this afternoon. While held up in traffic in Chicago he suggested I might go forward with the LS, sell the GS, buy the MDX and hold it for the kids when spouse gets her new car next summer. It's got great reliability, safety, size, etc. for kids to drive and my then it will be 5 plus years old at least.

Also, Kansas - would like for you to note my correct User ID - it's AggieGS not Angie GS - just a little correction my friend.

Kansas

Sorry AggieGS for getting your screen name wrong.

And I thought that your ATM graphic stood for "Automated Teller Machine"!

OK, I spent some time in an area referred to as "Aggieville" in Manhattan, Kansas so maybe I'm figuring all this out.

AggieLS

You'll love this then if you understand the ATM reference. We lived in Overland Park for several years and a friend got us one of those limestone blocks with the college logo engraved on it - ATM of course. We moved to GA and placed it in our yard and had the rumor going rampant among several neighbors that I was the guy who had invented the ATM machine and had retired to there to live. Pretty funny and still gets a great laugh. Now living in IL I still got one guy make that comment just 2 weeks ago who I work with and who had driven past our home recently.

I've been to Aggieville also, a great place but a little out of the way for most folks getting to Manhattan.