Debunking the “Leasing is a Bad Option” Opinion

Go on any online forum, Facebook page or group, Twitter, or Reddit and you’ll find an overwhelming majority of commenters and members of groups discouraging many people from leasing when they ask the question. Everyone is entitled to their opinion. Some people prefer buying outright, some would rather buy certified pre-owned or used, and a growing percentage of consumers are looking at leasing rather than buying. Every consumer has their motivation as to how, what, and why they buy the cars they do, but why is leasing always ripped when someone asks the question?

One of drawbacks of leasing is the annual mileage limit that typically ranges between 10,000 – 12,000 miles, depending on the car brand. You’re also looking at a higher down payment on a lease. But there are other factors (I’ll get to that in a moment) where the $2,000 – $3,000 down payment doesn’t look so bad in the long run. You will also not have the option to trade in the car after your lease is up, but you can buy the car or look at leasing again. Lastly, any extra miles that go above the annual limit, or scratches and dents, will cost you at the end of the lease, so you must be more careful than if you bought new or used.

Now that we’ve got the negatives out of the way, let’s take a look at why leasing is actually better.

As a used car buyer, I’ve experienced dealing with maintenance due to owning an aging car. I have monthly car payments, and I had to put a $2,000 down payment on the car. Right there we’re looking at close to $4,000+ (not including the monthly payments) with the down payment and maintenance. I’m paying $200+ a month on car payments, and to put that into perspective, the payments are more than if I leased a new Mazda 3 sedan or hatchback, Toyota RAV4, or a Honda CR-V.

The payments are a concern for people inquiring about the costs of leasing, and the advice givers always go back to the payments as a strongpoint to oppose the idea of leasing. However, if you’re in the position where you can’t buy a used car outright and put a down payment on it, you’re still dealing with monthly payments. Unlike with leasing, you could be locked in for 48 – 60 months depending on how much you want to pay per month, as opposed to being committed for 24 – 36 months with a lease. So right there you’re putting in an extra year or two on an older car that could be subject to mechanical failure due to high mileage or age.

Some dealerships are now offering free maintenance with a lease. That’s huge, especially if you’re thinking longterm. There are dealerships out there that also offer competitive prices when it comes to oil changes and wheel alignment. Also with a lease, you’re less likely to have to deal with major maintenance bills with the car being so new. There are no previous owners, so the entire time you have the car you know it’s history from your first drive to the last time you’ll ever see the car.

The last positive is that dealership’s leasing offers are always changing, especially during holidays. Herb Chambers BMW of Sudbury had an offer for the BMW 328ix that you couldn’t refuse. It was $275 a month with a $3,000+ down payment (usually you’d be paying close to $300+ a month). I know the down payment would scare anyone away, but if you have the money, you can’t tell me you’d rather buy a $3,000 early 2000’s Honda Civic with 180,000 miles that’s been owned by 3 different people, than a new 3 series. Now again, it’s all about where you are financially, but whether you’re a parent or college graduate, you would prefer something new or newer than having to deal with the headaches and hassles of owning an older car.

It doesn’t have to be a BMW, but a new Mazda 3, Honda Civic, Toyota Corolla and RAV4, or Subaru would be a better option than buying used and dealing with the unknowns.

Yes, leasing has it’s downsides, but so does buying used. It really depends on what you’re specifically looking for. As someone who owns a nine year old car, driving a new car with a lower monthly payment sounds great. Also, the peace of mind of owning a new car with no mechanical issues or aging equipment would make me sleep more soundly at night.

Am I Buying A Buick, Opel, or Vauxhall?

2014-opel-cascada-convertible-photos-and-info-news-car-and-driver-photo-504291-s-429x262

Meet the all new Buick Cascada, or should I say, the Opel Cascada. The four seater convertible is here to attract young and old buyers alike to purchase a luxury sports car from Buick and GM. Coming with a 1.6 liter turbocharged four cylinder engine that supplies 200 hp, there is great potential for the Cascada to be a very fun car to drive around in. Heated front seats and heated steering wheel will prolong the driving season for owners who live in the northern part or colder regions of the country, while also giving the sense of class and luxury when on the road. But here’s the question. Am I really buying a Buick?

The answer is no, you’re buying a rebadged Opel Cascada. For those that don’t know, Opel is a German automaker that’s a subsidiary of GM. They produce cars for Vauxhall in the United Kingdom, and once made cars for Saturn in the United States. The most popular model thanks to the UK’s Top Gear, is the Vauxhall Astra, which is still in production today. So at the end of the day you’re really buying a German car.

Thanks to the Cascada’s unveiling at the North American International Auto Show, it’s also been noted that the new Buick Regal is not exactly American or Buick at all, but is also an Opel. In Europe the Regal is sold as the Insignia, which not only comes as a sedan, but also a station wagon, an option we don’t get here in the States.

Buick’s new look has been great, and has revitalized the sluggish sales as of late. In 2014, Buick sold 228,963 cars, which was an 11.4% increase from the previous year. With German engineering being the cornerstone and heart of the new cars for Buick, buyers can feel good knowing that they’re purchasing a quality car that has a blueprint from Germany, but still has an American badge. With the Cascada, Buick hopes to not have Chevrolet compete with them in this segment, and make a cheaper, knock-off version of the four seater convertible.

Hopefully Buick continues to look across the ocean for inspiration and importing cars from Europe, and rebadging them. While it’s true that they’re no longer Buick vehicles per se, they do have a German backbone, something Chevrolet can’t boast. With Cadillac becoming a distinct brand and really trying to distance themselves from GM as much as possible, Buck must do the same to stay alive. Right now Buicks don’t remotely look like GM cars anymore, and that’s a good thing.

Mazda: The Face Of A New Trend In The Auto Industry

Mazda 6
AlBargan / Foter / CC BY-ND

The past five to ten years for the auto industry has seen countless innovations and changes, from cars being more economical, smaller SUV’s, to auto manufacturers changing their identity to keep up with the times. Mazda is one of many manufacturers who changed their lineup to appeal to all generations with their new designs and models that range across the spectrum of the auto world. A company that was primarily sports car driven with the Miata and RX-7, is now continuously finding ways to add on to what they’ve built in the past decade.

The Mazda 3, Mazda 6, CX-5, and CX-9 have created a solid foundation for the Japanese auto maker to build on. The 3 and 6 are beginning to compete against tough competition, as sedans priced between $20,000 – $30,000 have become extremely competitive. Because of this, auto brands are releasing some of the best looking cars in the segment. The Chrysler 200, Ford Focus and Fusion, Honda Civic and Accord, Subaru Impreza and Legacy, and Mazda’s 3 and 6 might just be the most options consumers have ever had in the compact to mid-size sedan segment. With that being said, a new trend in the auto industry is here, and you can thank the Germans for that.

Mercedes Benz, Audi, and BMW are in a battle of their own, fighting for position and dominating the smaller luxury car market. This fight for a majority stake in the $30,000 – $40,000 range has trickled down to companies who primarily sell cars $10,000 cheaper. Chrysler, Ford, Honda, Subaru, Mazda, and Hyundai know that if they don’t start jockeying for position in their respected segment, they’ll become victims to the big three in Germany. Consumers are beginning to see the opportunities that BMW, Audi, and Mercedes Benz have opened up and are now buying A3’s, CLA’s, and BMW X1’s. After two strong years for the Germans, the other auto manufacturers have had to throw a few punches of their own.

Think about it. Did you ever think you’d see the day when a Honda Fit or Civic would have a touch screen in their dashboards? Mazda’s, Subaru’s, and Hyundai’s are looking more high class which is making the consumer very bold in this segment. Four-door sedans, hatchbacks, and crossovers are the new, hot toys on the market. Sports cars are seeing a decline in sales, and despite lower gas prices, consumers aren’t buying bigger SUV’s like they once did.

We are going to continue seeing the auto industry changing, but for the better. Right now, as consumers, we’re like kids in a candy store and the auto manufactures continue coming out with new things to try. Mazda is about to unleash the new CX-3 which will take a bite in the small crossover segment, Honda is still going strong with the models they’re selling, Subaru continues to change their model’s appearances to entice buyers, Ford is pushing the Titanium trims of the Focus and Fusion, and Chrysler’s 200 not only looks classy, but now offers a V-6 engine under the hood that supplies 295 HP.

This is an amazing time to be in the market for a car. You can buy new or used, or lease which will put you behind the wheel of these new cars. Best of all, dealerships are offering great lease deals, especially around the holidays. Heading into 2015, you don’t have to own a BMW, Audi, or Mercedes Benz to drive a nice a car that provides luxury and a quiet interior.

Is Luxury Taking On A Whole New Meaning In The Automotive World?

If someone walked up to you fifteen years ago and said that Subaru, Honda, Mazda, and Toyota were making four door sedans that rivaled the Germans, would you believe them? Or better yet, if that same person told you Audi, Mercedes Benz, and BMW were offering smaller vehicles with starting prices near $30,000, would you think they were joking? The reality is, in the year 2014 the Subaru Legacy, Honda Accord and Civic, Mazda 6, and Toyota Camry and Avalon are all on par with German luxury vehicles, but for a fraction of the cost. While the big three German auto manufacturers are entering the cheaper luxury markets, the Japanese and even the Americans are meeting them with top notch vehicles that might make you question your bias towards a certain car brand.

The fact that any car can have an LCD monitor, leather seats, a spacious interior, and great fuel economy, really begs the question on whether it’s worth spending $10,000 – $20,000 more to get the same package and luxury you’d find on what used to be inferior car brands. For many, the dream of owning a Mercedes Benz or BMW will never go away, but when we were kids, who could have foreseen a Honda, Toyota, Mazda, or Subaru with a luxurious interior? What was once exclusive to those who were affluent, can now be found on most cars that were seen as average. Luxury really has taken on a whole new meaning, but it doesn’t stop there. Performance is also another feature that can be found on four door sedans that were 15 years ago, a family oriented vehicle.

You can own a Subaru Legacy with a 265 horsepower V6 engine for around $32,000, almost $8,000 less than the Audi A4 that has a turbocharged four cylinder engine with 220 horsepower. I must ask the question again, is it worth spending the extra $8,000 on an Audi when you can own a Subaru with the same comforts and styling? The Chrysler 200 has a V6 option which supplies a whopping 295 hp, completely blowing away any of the Japanese or German four door sedans in the price range of $30,000 – $35,000.

But at the end of the day, all the driver really wants is reliability with a combination of some form of luxury, and Honda, Mazda, Subaru, and Toyota can offer that. These brands speak for themselves as they’ve been known for reliability for years, but now that they’ve put in nicer interiors, leather seats, and performance for competitive prices, it’s hard to see why you’d pay extra for a car that offers the same. The only major difference is the badge on the front of the car and the recognition that brand has that catches the eyes of bystanders.

Heading into 2015, the consumer is going to have a boatload of options in the four door luxury sedan market in the $30,000 – $35,000 price range. Luxury is what you make it; the auto manufacturers are just making cars that help steer you into their direction. Owning an Audi, Mercedes, or BMW is a major feat, but when you see cheaper options that may offer more, it’s hard to say no.

Chevrolet: From “Like A Rock” to “The Dollar Menu”

2014 Chevrolet Silverado LTZ
AlBargan / Foter / CC BY-ND

Chevrolet has been launching campaigns to attract an assortment of consumers for years by offering cheap prices for those who have poor credit or can’t afford buying a new car due to their financial situation. While that is a noble cause, one that has probably been successful, there are major implications the auto manufacturer faces by making such offers. After the launching of their latest marketing campaign, “Chevrolet’s Dollar Menu”, they’ve unofficially solidified their fate as being the McDonald’s of the automotive world.

The deal is one dollar down payment in a lease offer for the Chevy Cruze and Chevy Silvarado, making them the cheapest lease offers on the market today. Forgetting about the incentives, limited mileage because of a lease, and the deal itself, let’s take a step back for a minute and let this sink in. A dollar menu for an auto brand, not a fast food restaurant, but an American auto manufacturer.

With all the recalls Chevy has had to endure, and now offering some of their lineup for a dollar, they’ve now opened themselves up to the perception of being the car equivalent of McDonald’s. When it comes to the food McDonald’s offers, you could say, “It’s cheap, but in the long wrong could cause obesity”. Chevys are now cheap, but could break down 2,000 miles later. This is not the best approach for a struggling auto maker and completely makes the brand look bad by subliminally saying, “Our cars are lemons and no longer of good quality”.

Chevrolet was once a proud American auto maker, the Camaro and Corvette were highly coveted by young adults, the Silverado was a very popular and durable pickup truck, and the Impala and Malibu were decent four door sedans that could hold their own against their American counterparts. Even the commercials sent better messages by going with the slogan “Like a rock”. In a matter of 15 years, Chevrolet has gone from being a respected manufacturer, to being the prime example of not buying American when it comes to cars.

Instead of the dollar menu approach and sounding like a fast food restaurant, Chevy should try a strategy similar to Honda. The Honda Fit is being marketed as an affordable, yet fun and efficient compact hatchback that fills every need for young adults, as they’ve been the target of this recent advertising effort. Chevy has the Spark, Sonic, and Cruze, all with starting prices under $20,000, and this should be the basis of a marketing campaign. Honda isn’t playing the Chevy game by being a Burger King or Wendy’s, and instead has a sound marketing strategy to a specific audience who are in the market for the hatchback.

The Sonic is a fun, hot, little hatchback for Chevy, and they should roll with it as being the backbone of affordable cars in their lineup. In all honestly, if a Cruze is only $1 down, I don’t think I’d be willing to pay the $169 a month as it doesn’t seem worth it, and would then think that the Sonic or Spark should be offered for $.50 or $.75 down on a lease offer.

When it comes to the automotive world, there should never be a dollar menu. ‘Like a rock” was a better slogan as it promoted a durable and quality vehicle lineup by an American automaker. Chevy has a lot of work to do when it comes to brand image after the countless number of recalls, but if they really want to be respected again, they need to drop the dollar menu immediately.

Auto Marketing: Are Car Manufacturers Becoming Too Much Alike?

Let’s go back in time for a minute to the late 1990’s to early 2000’s in the automotive world. What has changed since those days? Are consumers more confused now than ever? Are car manufacturers becoming too much the same, losing that individuality and no longer catering to the loyal customers they’ve had for probably generations? These are the questions that no one is asking, and in an industry that is constantly changing, why have blurred lines appeared where consumers can’t decide on what the better brand is, and instead just go along with tradition?

In the late 90’s if you wanted luxury you probably would buy a Mercedes Benz, BMW, or Cadillac. For the average family vehicle that was reliable and safe you’d go with the Honda, Toyota, Subaru, or Volvo. The young and dangerous teenager who wants speed would maybe look at a Ford Mustang, Chevrolet Camaro, or Pontiac Firebird. And for the person that wanted a pickup truck, Dodge, Chevy, GMC, and Ford were constantly advertising on TV to appeal to that specific person.

However, today there is such a variety of vehicles in the same price range that often get forgotten, not because they’re of poor quality, but they’re neither marketed correctly nor presented as an individual car manufacturer that stands out from the competition. For example, the average consumer who has no loyal ties to one specific brand will look in multiple categories such as, fuel economy, safety, performance and price. Yet most likely, they’ll only compare the car brands and models that are most prevalent in their lives that have been marketed to them constantly over the years.

As I wrote in a previous article, the 2015 Chrysler 200 is priced from $21,000 to $31,000, putting it in the same price range as the Toyota Corolla, Volkswagen Jetta, Honda Civic and Accord, the Mazda 6 and the list could continue on for a while. What the average consumer who wants performance while still owning a four door sedan doesn’t realize is that the 200 comes with a V6 engine that supplies 295 horsepower, completely blowing away the competition in it’s class in performance. Any one of the cars listed are also subjected to the same reality that poor marketing and a person’s personal preference completely drives their buying habits.

Let’s take a look at the new crossover SUV market that is constantly growing that includes the BMW X1 and the all new Audi Q3. Besides looking good, and for BMW and Audi the brand recognition, what do they really have to offer that other manufacturers can’t? Because luxury brands are now entering markets that are now rivaling Ford, Honda, Toyota, Volkswagen, and Mazda, consumers will now look to just the luxury brands and skip over what the traditional brands in that price range offer.

What used to be a black and white market has now become an array of colors, and while that is great news for the consumer, the manufacturers may end up losing in the end. If the consumer wants a small compact sedan, they’re going to be attracted to the Audi A3 or Mercedes Benz CLA without looking at what the other auto brands have to offer. The sports car market has remained the same over the years, as there is still a price margin wide enough where younger consumers will look to the American muscle cars over the BMW 2 series and others in that category.

The auto market has certainly become competitive, but along with it is the loss of individuality. Most have LED lights, leather seats, MP3 capability, power windows, keyless entry, and other technologies and comforts that were only found on the most luxurious of brands in the late 90’s. There needs to be better marketing strategies from auto manufacturers, whether that be target advertising, or mass marketing that reaches a variety of different people. BMW, Audi, and Mercedes Benz will be catering to a whole new audience; the audience that once bought Hondas, Toyotas, Volkswagens and Fords. TV commercials aren’t enough anymore as brand recognition is enough for consumers to get fixated on one manufacturer.

Right now there are multiple options at all different price ranges, but the consumer doesn’t know it. These auto manufacturers need to become unique again and cater to the specific audience they knew would buy their brand for many years to come. For the time being, the German luxury car segment is taking over, and if the other manufactures don’t step up their game, they’ll be in a for a rude awakening if and when Audi, BMW, and Mercedes Benz introduce the smaller vehicles they’ve been selling in Europe.

Using CarFax Alone Isn’t Going to Guarantee Finding a Quality Car

Volkswagen Golf 6 2008 26
Janitors / Foter / Creative Commons Attribution 2.0 Generic (CC BY 2.0)

CarFax is a great tool for the 21st Century car buyer who is looking for a Certified Pre-owned or used vehicle that is still in good condition. However, there is still no guarantee that you’ll find the perfect car that has years and thousands of miles left in it’s lifetime. There are multiple factors that come into play, such as the previous owner’s driving habits, the car’s seasonal wear and tear, and more importantly where the vehicle was manufactured. The country(s) in which the car was manufactured can be the difference between buying a quality vehicle and a lemon.

To dig deeper into this, think about your favorite automotive brand, or even the current car you own and drive on a daily basis. Where was the car manufactured? Shockingly, some of your favorite everyday purpose cars may not be built where you think they are, even if it has a reputation of being an American, German, or Japanese car.

Volvo has just announced that their new S60L which is manufactured in China will be sold in the United States. With this story being only a few weeks old, it’s already stirred up controversy as the company’s reputation of being a safe, reliable brand may be thrown to the gutter if Volvo plans to go through with selling a Chinese Volvo in the states, which they have every intention of doing.

Volvo’s are known to last a very long time, in fact people joke saying that they’ll outlive the owner if kept in good condition. Who knows how long the 2015 S60L will last, and there will be many questions raised by consumers when you find it in the pre-owned list on your local Volvo dealer’s website.

Another popular car brand is Volkswagen, and it might surprise some that a majority of their vehicles that are sold in the US aren’t made in Germany. Yes, the same Volkswagen who owns Audi, Porsche, and Bugatti doesn’t manufacturer all their cars in Wolfsburg. The VW Beetle, Jetta, Golf, and soon the Golf GTI are or will be made in Mexico. It wasn’t until 2005, when VW changed the appearance of the Jetta, that they started assembly and production in Mexico. Whether this changes the quality of the vehicle itself, that is still to be determined, but the perception customers have of the car is certainly different.

To make sure you’re getting a top notch used car, do extensive research on where the vehicle was manufactured. Not only is the assembly of the car different, but you’ll find that the electrical components and interiors will be substantially different. Road noise or lack thereof will be noticeable, and even the suspension and how it takes bumps on the road could determine where it really came from.

The badge on the front of the car may say it’s from Germany, Sweden, or America, but there is the possibility that it’s originally from some factory in Mexico, or China if you intend on buying the new Volvo S60L. We have no power to improve the driving habits of drivers so we get a used car in great condition, but we can research and make sure we’re getting a car that was built in a factory that has a reputation of producing quality and long-lasting vehicles.