Danny, what's your advice on car shopping...

[wantonebad]

Or anyone who cares to share their thoughts, I need to buy or lease in 3 months or so. Usually, I'd be out of my current lease by now in a new vehicle, but prices are just insane. I can't get what I want, without ordering it to buy, or leasing a top-of-the-line model which I never do... either way prices suck!

Is waiting smart, is buying my current lease out the right move since my residual is insane compared to current market. It might be a good deal now to buy the lease but in 6 months when the used car market crashes I'll be stuck.

What are you all doing?

[OmegaJJH]

Even if you want to buy a new model you may struggle. Although prices remain stable on new cars, access to them is extremely challenging due to the global semiconductor issue.

Hence why used market values are through the roof - there is a shortage of new cars.

Everything I hear is this isn’t going anywhere for next 12 - 18 months.

With specifics to US leasing and your situation - someone with far more knowledge will hopefully be along soon. I’d guess extend the lease for 12 months if that’s an option.

[favre12rodgers]

Was in similar situation....things aren't changing anytime soon.

12-18 months? That's REALLY hopeful. I've heard 2025.

It depends on the car....but generally you are going to pay more for less car now....and especially so if you want something on the lot now or expect to be waiting to have it built (and still you will pay basically MSRP).

As crazy as it is sounds....cars are really taking the Rolex route right now in terms of value....they all are going up and some people are being ridiculous with pricing because there is going to be one person out there who will pay the huge markup.

[T4ME]

I guess this is better news ....Intel's $20 bln Ohio factory could become world's largest chip plant.... this should help ease the shortage...can you buy your current car at the end of the lease?

[Danny83]

So being that im in the wholesale car business, used car prices are equivalent to Daytona prices. I have my own wholesale lane at 2 auctions here in the west coast. I use to constantly have to sell a minimum of 70 cars per week required my Manhiem auctions now the number is 30 cars minimum, the reason why car prices are insane the bluebook is pretty much useless so. Chip Shortages, remember when most people could not work in person in 2020? Well that caused a huge back up in supply disturbances. Especially impacting Italy,China,Japan, Mexico and here in the US, there is also a boat captain shortage, pilot shortage, employee at port shortage, custom shortage, just to import cars its taking months. Domino affect on car prices, but there is more ….now most New car dealerships are forced to be used car dealerships driving up the prices, most dealership managers are cold calling craigslist and offer up ads to buy cars that is also driving up the price. Honestly its a terrible time to buy a car prices insane and its only getting more insane do to lots of people with kids getting big tax returns everyone has 5-10k down for a car so thats not helping supply and demand. Try to buy out your lease. So pretty much its going to be this way until 2023 maybe 2Q of 2024. Im hoping to exit the car business by the time im 40. I have been buying more gas stations, and breaking ground on a hotel in Texas. Good luck to everyone that buying a car be as patient as you can. This will turn around but the key answer is when.

[m j b]

I think you should buy out your lease. That assumes of course, that you like the car.

After a few months of trying to find a new car that I wanted and waiting for an allocation to order, I found an overpriced used car that I wrote about here instead.

Who is Danny?

[brandrea]

My BMWe came off lease back in August but it had high mileage and I didn’t want to own it off warranty, so I let it go.

I was able to buy a much more modest Camry XSE built in Kentucky. Ordered it in May and received it in August when my lease was up.

I know it’s not as fancy a car as what most of you drive, but it’ll be a good daily driver. With two teenagers headed to University, my luxury car days are behind me for now

[dddrees]

Marc, I'm sorry to hear you find yourself in this position and I wish I had some wisdom to share but I don't.

I just keep telling my wife how fortunate I feel we are considering I purchased our latest Suv in mid July 2020. We didn't necessarily need to then but the timing was right. I think over time this has even become better for me than I first expected.

I'm retired now and will possibly get rid of my wifes older car when she retires in a few months and if we do it would be nice to capitalize somewhat on that decision as well. I'm just hesitant and I want to make sure reducing at this time will be the right thing to do because I certainly do want to find myself in a spot where I need to get another after doing so.

In the meantime I'm just hoping not to find myself getting into some sort of accident which would put me in a bad position given these extremely unusual times.

Anyway good luck Marc and to all of you who find yourself in similar circumstances.

PS: Marc this being a good place to inquire, I take it you have checked out other sites that might be as well versed or better on this very subject?

[crew]

I would exercise the buyout at lease end. Most likely your car is worth much more than the buyout cost. Seems like money in the bank to me with the only downside being the car is likely out of warranty. Since you’ve owned the car since new you know what you’re getting.

[DLRIDES]

) Wait

) Never lease

) Purchase, drive for 10 years

) If every day reliable transportation is your goal : Lexus, Acura, Toyota, Honda

) If money is no object, discard all the above.

[GoingPlaces]

I'd buy out the lease and wait. Otherwise you will get killed on the purchase. I've got the itch but am holding out myself. Terrible time to buy a car.

[spurwar]

The lease on our family SUV came due in October and we ended up purchasing it since there was a large difference between the buyout price and the current market price. Seemed like a no-brainer considering the dealer had a markup on the new cars. We were well under the mileage limits and love the truck anyways so it makes sense to hold for a couple of more years (especially since the kids will destroy it anyways!).

If you have equity embedded in your vehicle, it may make sense to buy it and if the market crashes, you should at least get something close to the residual value.

[walds11]

Originally Posted by DLRIDES

) Wait

) Never lease

) Purchase, drive for 10 years

) If every day reliable transportation is your goal : Lexus, Acura, Toyota, Honda

) If money is no object, discard all the above.

This is what I’ve always done

I leased a car once. Not sure if ever do that again.

[dddrees]

Originally Posted by walds11

This is what I’ve always done

I leased a car once. Not sure if ever do that again.

I don't myself either, however this doesn't make it a good choice for others.

I think the main problem in this case is the times we find ourselves in.

[DeeTee]

Shop your car and sell it before lease expires. You can sell higher than your buyout.

Sell high, buy high it works out.

[dddrees]

Originally Posted by DeeTee

Shop your car and sell it before lease expires. You can sell higher than your buyout.

Sell high, buy high it works out.

Is there a second part to this recommendation. Like, what he should do to replace the current car he uses?

[enjoythemusic]

It'll be bad when people follow the obits to buy their car. Don't think we're there just yet.

[dddrees]

Originally Posted by enjoythemusic

It'll be bad when people follow the obits to buy their car. Don't think we're there just yet.

I'm just hoping this might return just some of the manufacturing to the US and not just the Intel factory they are currently talking about. I know, wishful thinking. It's not until times like this that people realize what bad shape our lack of manufacturing has really put us in.

[OmegaJJH]

Originally Posted by dddrees

I'm just hoping this might return just some of the manufacturing to the US and not just the Intel factory they are currently talking about. I know, wishful thinking. It's not until times like this that people realize what bad shape our lack of manufacturing has really put us in.

Would US manufacturing have avoided Covid?


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[BNA/LION]

Originally Posted by Danny83

So being that im in the wholesale car business, used car prices are equivalent to Daytona prices. I have my own wholesale lane at 2 auctions here in the west coast. I use to constantly have to sell a minimum of 70 cars per week required my Manhiem auctions now the number is 30 cars minimum, the reason why car prices are insane the bluebook is pretty much useless so. Chip Shortages, remember when most people could not work in person in 2020? Well that caused a huge back up in supply disturbances. Especially impacting Italy,China,Japan, Mexico and here in the US, there is also a boat captain shortage, pilot shortage, employee at port shortage, custom shortage, just to import cars its taking months. Domino affect on car prices, but there is more ….now most New car dealerships are forced to be used car dealerships driving up the prices, most dealership managers are cold calling craigslist and offer up ads to buy cars that is also driving up the price. Honestly its a terrible time to buy a car prices insane and its only getting more insane do to lots of people with kids getting big tax returns everyone has 5-10k down for a car so thats not helping supply and demand. Try to buy out your lease. So pretty much its going to be this way until 2023 maybe 2Q of 2024. Im hoping to exit the car business by the time im 40. I have been buying more gas stations, and breaking ground on a hotel in Texas. Good luck to everyone that buying a car be as patient as you can. This will turn around but the key answer is when.

Great Post! Thanks!

Selling our other Macan S and prices are Very High. Not a lot of private sellers either.

[rlj676]

Originally Posted by OmegaJJH

Would US manufacturing have avoided Covid?


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Yes in many ways. First the shutdown laws in many of the Asian countries we depend on are far more draconian than in the US. One case will close a plant for weeks.

Second there is a better chance of us companies and mfg allocating more domestically than foreign competitors.

Source, I’m a purchasing director of a tier 1 automotive electronics supplier.

The biggest problem though is that expecting a prolonged volume collapse auto orders were cancelled and we can’t ever get back that capacity as it was sold to other industries. Also automotive uses older, reliable and cheaper tech (long development lead time impacts too) so new investment and capacity doesn’t go into the chipsets we need most.

If you want real fear read about how important TSMC is to the worlds electronics (auto included) and think what happens if Taiwan gets overtaken.

[zengineer]

Order what you want in a new car even if you have to pay MSRP (not more). It will be slow but eventually arrive, new car production is slowed and inventory levels are low but nobody has stopped building cars completely.

In the meantime buy out your lease. You'll likely have your new car long before the current car drops to anywhere close to the buy out residual.

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[dddrees]

Originally Posted by OmegaJJH

Would US manufacturing have avoided Covid?


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No, but it may have avoided a some of the problems we are currently experiencing. Not all, but some of them.

But that is only a small part of my frustration with the lack of manufacturing we currently have and that's why I mentioned it.

Actually there are problems where this lack of manufacturing could have been much worse.

[Dr. Robert]

Looks like I'll keep my trusty 2001 Toyota Highlander Limited for a few more years!

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[East Bay Rider]

Buying out the lease is the way to go.
We bought out my bride's leased 2018 Rav4 Adventure (15K miles) last summer for $17,447. I just checked Cargurus and dealers are asking nearly twice that right now often with higher mileage. Higher even than the original window sticker.
Once this bubble pops it's going to be devastating to the owners of those cars owing more than twice what their car is worth to sell or trade.

[ronricks]

Depending on what car you have leased a lot of people have equity in them when they come off lease right now. Example. My girlfriends Toyota 4Runner just came off lease. We bought it then sold it two days later for a $17k profit. Then, we went back and leased another brand new 4Runner for about what she was paying on the other one.

[Malum]

I buy and keep my truck for ten years then buy another new . Not a big car fan , love my trucks and motorcycles .

[East Bay Rider]

Originally Posted by ronricks

Depending on what car you have leased a lot of people have equity in them when they come off lease right now. Example. My girlfriends Toyota 4Runner just came off lease. We bought it then sold it two days later for a $17k profit. Then, we went back and leased another brand new 4Runner for about what she was paying on the other one.

That's awesome.

[wantonebad]

Originally Posted by Danny83

So being that im in the wholesale car business, used car prices are equivalent to Daytona prices. I have my own wholesale lane at 2 auctions here in the west coast. I use to constantly have to sell a minimum of 70 cars per week required my Manhiem auctions now the number is 30 cars minimum, the reason why car prices are insane the bluebook is pretty much useless so. Chip Shortages, remember when most people could not work in person in 2020? Well that caused a huge back up in supply disturbances. Especially impacting Italy,China,Japan, Mexico and here in the US, there is also a boat captain shortage, pilot shortage, employee at port shortage, custom shortage, just to import cars its taking months. Domino affect on car prices, but there is more ….now most New car dealerships are forced to be used car dealerships driving up the prices, most dealership managers are cold calling craigslist and offer up ads to buy cars that is also driving up the price. Honestly its a terrible time to buy a car prices insane and its only getting more insane do to lots of people with kids getting big tax returns everyone has 5-10k down for a car so thats not helping supply and demand. Try to buy out your lease. So pretty much its going to be this way until 2023 maybe 2Q of 2024. Im hoping to exit the car business by the time im 40. I have been buying more gas stations, and breaking ground on a hotel in Texas. Good luck to everyone that buying a car be as patient as you can. This will turn around but the key answer is when.

Thanks Danny, I can always count on you to tell it like it is!! I appreciate your insight!!

[wantonebad]

Originally Posted by East Bay Rider

That's awesome.

I have equity but not like that LOL 17K GEESH!!