BMW - Test drive #3

Today, myself and my two older kids set off for BMW to test drive the 335i.  I called ahead so they would have the car ready.  I asked to speak to a different customer sales representative and they were very accommodating.  The guy was busy when I got there so the nice reception lady made me a great cup of coffee with their fancy coffee machine, this coffee was top notch.

So after about 5 minutes sales guy came over and said he had the car all ready for me, he asked if he wanted me to have him come along and I said no that was fine.  Just then the previous sales guy came over and there was a moment of awkwardness as he says “I’m free now”  as if he was going to take over again.  I sort of looked at new sales guy and he said to give him a second.  The two sales guys went off and the new guy came back.  I felt a little bad about it all but not overly, not sure what he said to the previous sales guy but he never came back.

Anyway we piled into the 335i and headed straight for the highway.  This machine is fast and it clings to the road, it is beyond a pleasure to drive.  Overall it is identical to the 328i but it just accelerates quicker.  I like to concept of having a 300hp car and it is really fun but I’m not sure if it is worth the extra $5,000.  When you are going to buy your next car, even if you have no intention of buying a BMW you should take one of these out for a spin.  I think I will go for the used 328 over the 335 just because it is $5,000 cheaper and will probably save me a few speeding tickets.

So the kids like it, I like it, now its decision time on selling the Pilot……

BMW - The Saga Continues

So I went to Audi today and actually saw a nice Certified 2008 A4 on the lot so wandered inside to see what the story was.  List price is $27,900, it is the Special (or they call it S) edition which means it has full leather and a few styling additions.  They also have 1.9% financing for 5 years (same as BMW right now) and the same certified used vehicle warranty.

So now I go off on a tangent about certified used vehicles.  Here is how it works…. The luxury brand guys figured out they could make another few thousand bucks off vehicles that come back off lease if they certify them.  This basically means they make sure the brakes and tires are in good shape, fix any broken parts and resell the vehicle for about $8,000 more than the lease end residual from what I can figure. 

For example, the 328xi I was thinking about leasing had a residual after four years of $18,000 and BMW currently has a 2007 (4 year old) 328xi for $29,500.  So someone is making money here…. serious money. 

The upside to buying certified used is that you get a 6 year 160,000 km warranty on the vehicle from its initial service date.  If the factory warranty is all gone you get an extra 2 year 80,000 km warranty.  If you have a warranty job though you have to pay $50 to deter people from getting every little minor thing fixed.  I would just save a few up and bring it in for the $50 fix up.  It’s a good warranty if you plan on keeping the car a couple of years and moving on, which is probably what I would do.

Anyway the Audi looked nice but the back seat was really cramped, I checked a few reviews and they all agreed.  I never drove it but it only has 200 hp and 201 lb/ft of torque…. No BMW, but it was a good comparison shop.

Now about BMW, I checked their certified used and saw they have a 2008 335 xi on the lot, and it’s black, with Dakota leather and premium package for $34,500.   Now as you would have already read, the 328 xi was fun at 230 hp, the 335 has 300 hp and 300 lb/ft of torque…….. 300 HP!  Yes I will be test driving this vehicle and let you know what it is all about.  So basically you pay an extra $5,000 to have 300 hp compared to 230, I consider that a great deal.

On a happier note, when I emailed BMW today to ask about their used vehicle rates, the sales manager replied to me so I email him back about my lease rip off concern:

“I will probably drop in the weekend.  I was previously considering leasing new but am leaning towards a certified used now, I see you guys have a few nice ones there to choose from.  I was dealing with Mike Roche but he didn't reply last time I emailed him about the lease program you guys are currently running. 

Maybe you can answer a question I had.  I was reading that you guys had free automatic and $4,000 discount on the 2011 328XI but he was saying the free automatic was included in the $4,000 discount, which is not how it reads or is portrayed in the globe and mail article from a couple of days ago. 

Anyway I am moved on to the certified used and will drop in to see you on the Saturday if you are free.”

And he was nice enough to email me back:

I apologize for the breakdown of communication that is not acceptable.

Totally acceptable response and I am back to being a BMW fan.  So I think certified used may be the way to go…… the thought of 300 hp makes me happy, I’ll get some barf bags for the kids and we will be all set.

SUV Buying Info - Part 2

I was going to do this yesterday but I got carried away with rambling about my second trip to BMW.  The BMW guy still didn't email me back, I'll take that as a no.  Just for kicks I emailed a Toronto BMW dealer and he said he could get me into a BMW 328i Xdrive for $600 a month for 48 month lease, which is almost $60 a month less or almost $3,000 over term of the lease.  I asked him to forward me the details of the deal so I can see where he is making up the extra, I will post that when I get it.  It's just a shame that the local guy won't make me the same offer, or even bother to email me back.

Anyway on to part two of SUV buying info.  My plan was to talk about cross-over vehicles a bit but I realized I have already discussed a bunch of vehicles that can be classified as crossovers.  I think just about all SUV type vehicles are crossovers these days which is basically an SUV that rides like a car on a car type chassis…. Also know as a station wagon.  Crossovers include Ford Escape, Edge and Explorer, Honda CRV’s, Toyota Rav-4’s, Mazda CX-7 and 9, Nissan Rogue, Volkswagen Tiguan and Touareg, Subaru Forester and Outback, Suzuki Grand Vitara, Kia Sportage, Hyundai Tucson, Chevy Equinox….etc etc.

So what is not a crossover….. Jeep Cherokee and Landrovers from what I can see.  I refuse to call my Honda Pilot a crossover but I think it might be, at least the new ones are. 

I can understand why these vehicles sell well here in Newfoundland, I mean 4WD is useful here for our winters but why would they be so popular in warmer climates?  Maybe they just sell a lot of the 2WD versions down there.  It wasn’t that long ago that no one drove a 4WD and now 50% of the vehicles on the road are an SUV of some type or another.  Gas prices are starting to dent the SUV trend I think but the engines are becoming more fuel efficient to combat the rising gas prices.  Most people who live in the St. John’s area probably only drive a few hundred KMs a week anyway so gas prices are not as impactful here.  You are looking at a difference of about 5 or 6 mpg for a standard SUV compared to a mid sized sedan on average or 7 or 8 compared to a compact sedan.  That’s just a rough estimates but fairly accurate.

SUVs (also including crossovers) have the advantage of being able to hold more crap in the back on top of the 4WD option over most cars.  Some cars do offer 4WD, most notably sport sedans like BMWs and Subaru which must have had a Newfoundlander on staff when they decided to have AWD on all vehicles.  You have to ask yourself, how often do I need the extra crap room, and do I need 4WD.  If you need room often and want 4WD then I guess you need an SUV.  Of course they cost more than a nicely appointed sedan and have 20-30% lower fuel economy.

Now I have myself thinking about that BMW again…. I checked out the Audi A4 today and they look nice as well and can be leased for $40 less than the BMW a month.  I wonder if they will offer me any kind of a deal…. I’ll check it out and let you know.

Test Drive BMW 328i - Follow Up

So I went back to take the BMW out for another spin, this time I drove the model I would buy if I bought one which was similar to the one I previously drove but with no Navigation and the wheels were a bit smaller.  The previous one I drove was the "Executive" model but it wasn't worth the extra $3,000 to me.  Besides it had plastic wood trim inside which I would pay NOT to have.  The 328i X with premium package was the one I took out the second time.  I figured I would take my better half out for a spin to see what she thought.

Anyway the drive was very nice as I assume it will always be, excellent acceleration, braking and handling.  It's a car for drivers, not so much for practicality but I could drive this thing all day.  So I took out better half, she liked it and I headed back to the dealership to see what better offer I could get out of them.  To my surprise the guy didn't offer me so much as a free car mat.  He just said the deal is already good so we have nothing else to offer.  He went over the $4,000 discount and the 1.9% lease rate which are good but my cat could go in and get that offer.... seriously .... meow..... Oh look $4,000 discount and 1.9% rate.  They also advertise free automatic transmission, and sales guy said that was included in the $4,000 discount, well not according to the Globe and Mail yesterday (http://www.theglobeandmail.com/globe-drive/new-cars/deals-week/deals-of-the-week-no-payment-deals-on-premium-cars/article2212940/).

So again I found myself feeling like I was being cheated by a car salesperson, well in actual fact I was being cheated out of the free auto transmission.  So all of a sudden I never felt the same about the BMW, the salesperson was making me not want the car so much, he was actually getting in the way of the sale.  I emailed him earlier today to mention the globe and mail article and guess what.... he never got back to me.... as  I expected, maybe he was busy, I will let you know what happens tomorrow.

I went over to Mercedes for some comparison shopping and they cover the first $450 of your first three lease payments and have $800 discounts but have really high 48 month lease rates.  The 36 month lease payments are actually only $850 a month on entry level C Series sedans..... but its not a BMW for a fun drive.

So I'm not sure what I will be doing now, maybe go back to looking at Sonata 2.0T with 274 HP, they look fun to drive..... but its not a BMW.

SUV Buying Info - Part 1

Back in February I started tracking various car prices and among those I tracked were some of the more popular SUVs.  The only thing I could decide on for a Pilot replacement was that I didn’t really want a GM, Mitsubushi, or Nissan all for different reasons.  The local GM dealership just has too many different vehicles and the service center reminded me of an overfull hospital on my one and only visit.  Also I don’t find their website very user friendly or well laid out, juts my opinion.  I have never heard anything good about a Mitsubishi and my dad had a Nissan and didn’t like the service there so I am boycotting.

Anyway some general comments about 9 months of price watching…. Guess what they don’t change much.  Well the msrp never changes but the interest rates and promotions don’t change much.  Just a few examples of purchase rates in various months:

	Feb	Mar	Aug	Oct
Honda CRV EX	0.9%	0.9%	0.9%	0.9%
Toyota Rav 4 4WD	2.9%	1.9%	2.9%	2.9%
Hyundai Tucson	0%	0%	0.9%	0%
Ford Escape Ltd 4WD	0%	6.99%	4.49%	5.79%

These are just a few examples but most dealerships are consistent with the exception of when new models get released.  For the first while rates stay up to make sure they can move the previous year models out the door first.  As you can see Ford goes up and down but as the rates go up the discounts also go up to balance it all out.  So they appeal to low rate buyers for part of the year and to discount shoppers for part of the year…. Seems silly to me but the numbers don’t lie.

Purchase rates have been low all year on almost all popular SUVs, with the exception of whatever Ford has on the go.  So if you go to a dealership and they say they are not sure where rates are going next month….. unless they have a new model coming out they are not going anywhere more than likely. 

Kia and Hyundai have had gas card offers on and off over the year, even when that deal is not on you can probably get one thrown in.  Honda still has a few CRVs left and if you are thinking about leasing a small SUV the CRV is the way to go in you like the look of them…… I don’t but again that’s my opinion.  Due to high residuals and low rates you can lease a Honda CRV-EX for $445 a month tax included.  The CRV is actually bit more expensive than other similar sized and optioned SUVs but you can lease them for less in most cases.  One of the things I don’t like about the CRV is the engine power is noticeably low, and there is no 6 cyl or turbo option, just the one 4 cyl choice.  Also, fog lights are not standard on any trim, you have to get the dealer to install them as an extra, that’s kind of strange.  Most important to me, I like a peppy drive, this doesn’t have it.  If you want a nice calm family oriented SUV, especially if you are into leasing, you almost have to go with the CRV.  Honorable mention goes to the RAV-4.  If you like to have some power with your boring then the RAV-4 with the V6 is the way to go, it also has surprisingly good fuel economy.  You can also get a third row in the RAV-4…. It’s a small third row but you could potentially fit 2 small kids back there.

If you are looking to purchase something fun looking and well optioned, then forget the boring CRV and consider either a Tucson or Sportage.  They will have 0% or 0.9% financing for five years.  You will find that although these compact SUVs all look quite different the actual internal dimensions are very close, like within half an inch every way around.  So why not go for the one that looks the best to you?  If you want to lease the Kia and Hyundai are not really good deals as the residuals are low and rates are higher in most cases.

If you want something s bit bigger, the Santa Fe has 0% financing up to 7 years, you see these things everywhere now, again if you want nice family oriented transportation it is a decent choice. 

Tomorrow I will discuss cross-over type SUVs and SUV alternatives.

SUV buying info

I few people I know are looking for new suvs so I am going to interrupt my dealership blogging to post some info on current suv deals over the next couple of days.

Dealership Reviews - Honda

Dealership Review - Honda

I actually dealt with Honda before I bought my Pilot. About 4 or 5 years before the Pilot I bought a horrible used Ford Windstar from the local Honda dealership. You can look at my post on my vehicle history if you want any details on the Windstar but suffice is to say it was a horrible vehicle I have basically blocked from my memory.

So about 4 years ago I wandered into Honda looking to upsize from my Saturn, which was a decent vehicle but a wanted a larger SUV type vehicle, just like everyone else in the North America at the time. The only other vehicle I can remember looking at was the Saturn Outlook, which did seem like a nice vehicle…. But it was no Honda Pilot. The third row of seats was really appealing, my three boys were 5, 8 and 11 at the time so sitting them all next to each other in the back seat was not a fun time for any of us. I figured the Pilot would be too expensive but we went to check it out anyways.

The dealership has one of the smaller showrooms of all major dealers, actually probably the smallest now. Standard set up, manager’s office on one side with a good view of the whole area with salespeople offices scattered along the walls (no cubicle dwellers here). I asked the receptionist to see a sales person and a sales person appeared. I have heard a couple of people complain that they were not served in a timely manner at Honda which turned them off, but normally I just ask to see someone if I want to see someone rather than waiting.

Anyway salesperson was very nice, I asked what they had in Pilots and at the time they had a 2.9% lease rate on 2007s but the only black 2007 remaining was a demo. I like Honda because when you ask what they have in stock they look up their stock in the computer and show you exactly what they have…. No visits to the manager’s office…. No I think I haves…… They show you on the spot what they have and how much they cost. If there is a model you like they print out details of the vehicle, and details of exactly what is included in the payments. No cloak and dagger, no hidden costs, just details on what you will be paying including interest and taxes. Very simple and very customer oriented.

Once I saw the Pilot of course I knew I had to have it, so off to the Finance guys office we went. Since it was a demo they dropped a few thousand dollars off the price and in what I thought was a nice gesture offered an extra set of headphones for the dvd player since I had 3 kids but only 2 sets came included. So we went through the standard routine of do I want extended warranty or undercoating etc… but with no pressure at all and I answered no thank you as usual.

So in short order I was out the door as the proud owner on my new Honda Pilot. When I came back in for my first oil change the finance guy (who was driving the demo before I bought it) paid for my oil change and even (unknowingly I think) paid for a San Gen club membership that gave me 10 free oil changes. I was considering getting the San Gen so they were going to bill me for it, he said he would pay the bill so whether he knew it or not (I figure he had to know) he bought me a San Gen club membership.

I could not have asked for anything better in my buying experience at Honda. Sales guy was straight forward and honest, no 1970’s sales pitches. Over the years I have sent emails asking about pricing on other vehicles for my other family members and they are always responsive. The DVD player broke (it was not a dealer installed item) and they arranged for a new one no problem. I would say Honda gets an A+ from me for overall sales quality. They could use a bigger showroom maybe but that’s about it. I just wish they had some nice looking vehicles to replace my Pilot with…….

Dealership Reviews

Dealership Reviews –

Over the next week I will be posting about my experiences at different local dealerships.  Not even necessarily about the cars they sell although some will be mentioned but more the way the different dealerships and salespeople operate.  I am always astounded at how some still operate like it is 1975 while others are more with the times.  They all have shiny new buildings but the major organs inside are still in need of a transplant in some cases.  I would appreciate it if you would share any of your experiences at these dealerships as well.

I will start with Honda because that is the birthplace of my wonderful Honda Pilot EX, next cover Mazda since that is where we got our Mazda 3 and then on to Ford, Volkswagen, Hyundai, Kia, Toyota and GM.  I will have interesting things to say about some but others there’s not really much to talk about.   Note that the details provided will be my opinion of these places which may most likely differ from others opinion but I would like to hear those other opinions if you would like to share.

Thanks…. Tomorrow Honda.

Test Drive - BMW 328i X-Drive

Ok so I visited BMW today and took out a 328i X-Drive for a test drive. Big mistake, now I want to buy one. They actually have really good lease rates on now at 1.9% and have $4,000 off msrp. This vehicle drives like a dream, looks cool, and it's fast. It is a compact sedan but all of a sudden the vehicle size doesn't seem to matter. Really comfortable seats, nice sun roof, awd, great acceleration, steering and braking. Check it out on the bmw site.

Bottom line is $650 a month for 48 month lease which includes all scheduled maintenance with an $18,000 residual.  I am strongly considering this..... the sale of the Pilot may be imminent, stay tuned!

http://www.bmw.ca/ca/en/newvehicles/3series/sedan/2008/allfacts/design/exterior.html

Autos.ca - Great Site

Autos.ca-

Found a great site for posting questions, really good forums and lots of great Canadian content about vehicles at auto.ca, you should check it out if you are in the market for a new vehicle or just have some questions about cars in general.

Trade In Update - Dodge / Jeep

Trade In Update-

I was looking at the Jeep Compass online so I figured I would go up to the local Jeep dealership to take a look, I had never really considered a Jeep but what the heck it was close to work.  Sales guy was nice enough so I figured I would take one out for a quick test drive to see what they were like. 

I drove a 4X4 North model, the car itself was unimpressive, definitely lacking in the power dept and you could hear the engine quite loudly from inside the vehicle.  Now I am used to my wonderful Honda Pilot so I didn't expect a $25,000 Jeep to hold a candle to it.... and it didn't.  I mean it wasn't a bad vehicle to drive but it didn't have some features others similarly priced did have like bluetooth, sunroof, peppy engine, fancy storage compartments, cool styling.  It was just kind of.... nice.  I should have probably taken the Patriot out for a run because it has boxier styling that I like, but it is almost identical to the Compass so it probably wouldn't have made much of a difference.

So I made it back about 10 minutes later, what I was really interested in was what they would offer me on a trade.  Past experience was that it would be $12,000...... any guesses in what they offered.... why yes $12,000.  Actually the sale person said $12,000 - $13,000, of course I told him no way.  He went to tell me about the tax savings I would get yadda yadda, then said he will ask around to see if he can get more at another wholesaler, I said that would be fine.

So nice sales guy, they have 3.99% five year rates with $2,500 discounts off msrp on the 2011 Compass.  But I would never buy one. 

Anyway it's strike 5 on the trade in amount, I'm sure I can do better somewhere, still haven't tried honda although I am not sure I can say I am interested in a CRV with a straight face.  Maybe I will check out an Accord, the 2011s have excellent rates.

AJAC Car of the year

Car of the Year-

AJAC car of the year testing takes place next week, check it out in this Globe and Mail article. From time to time the globe will have some good automobile articles in the drive section, you should check them out once a week or so.

Follow this link to the AJAC article:

http://www.theglobeandmail.com/globe-drive/new-cars/auto-news/ajac-testing-the-best-new-cars-for-2012/article2206480/

Mazda 0% Deal

New Car Deals

Nobody will be surprised that Mazda has 0% interest on most new vehicles since they have had this offer for at least two years now (I know this because we bought a Mazda almost two years ago - more on that later).  But now they are offering 7 YEARS of 0% on most 2011 vehicles to make way for the 2012's.  They have a new Skyactiv thing for the new model engines which increases fuel economy substantially from current models.... so its out with the old, in with the new.  7 years of free money is a good deal if you are in the market for a Mazda. 

Unfortunately the local dealership currently looks like it was hit by a bomb, but I'm sure they have the vehicles in there somewhere.

Check it out at www.mazda.ca

Honda Pilot Trade In Stories

Honda Pilot Trade In -

Initially when I was considering getting a new vehicle I wasn’t thinking trade-in, it was strictly bring back the Pilot and get a new vehicle.  But as you probably know by now I bought the Pilot so a trade in was a possibility.  I had a new factor in my car buying decision and it made my dealings with car salespeople even that much more interesting.  I have gotten trade-in quotes from four dealerships to date, in order of offer date: Volkswagen, Subaru, Toyota and Kia.

#1 Volkswagen – Ok so there about two months back I was looking at the Volkswagen Golf Wagon TDI.  I had read some good things about the diesel engines and I liked the look of the wagon, I’ll discuss the vehicle, test drive and what not at a later date just focusing on the trade in aspect now.  So off I went to test drive the VW and the dealership said they would have a trade in for me done in about 10 minutes.  So I was back in about 15 minutes and they said they called around to their used car guy and offered me $12,500 in trade.  I nodded politely thinking they were out to lunch and told them I would get back to them once I had thought it over.  Of course there was no way I was going to accept $12,500 in trade.  We emailed back and forth a bit with the salesperson explaining to me that I would also save the tax on the trade in and that I would actually have to sell my vehicle for over $16,000 to get the same as he was offering with the $12,500 trade…. An explanation is in order:

When you trade in a vehicle they take the trade value off the before tax amount, but if you put cash down on a vehicle it comes off the after tax amount.  Let’s use an example of a vehicle that costs $20,000 plus tax and a trade in vs cash down of $10,000:

	Vehicle Price	Trade In	Tax on Vehicle	Cash Down	Total Paid
Trade In	$20,000	($10,000)	$1,300	0	$11,300
Cash Down	$20,000	0	$2,600	$10,000	$12,600

So that would partly explain why I would have to get more than $12,500 in a private sale because I would also save the tax on $12,500 trade in which would be $12,500 X 0.13 = $1,625.  But that still doesn’t mean I have to get $16,000 for my vehicle so there was something else included in what the salesperson was telling me.  I figured out that he was quoting me the figure if I had tax included in my selling price.  If I sold my vehicle for $16,000 tax included then I would have to remit the sales tax, which would be 13% of the selling price.  That would leave me with $16,000 / 1.13 = $14,160 to put cash down which is roughly equal to $12,500 in trade.  But of course I would never sell my Pilot for $16,000 tax included and for every dollar I could sell it privately for over $14,125 ($12,500 trade + $1,625 tax savings from trade) would be an extra dollar in my pocket.  For a reference point just go to autotrader.ca and look at what a 2007 Pilot EX with 100,000 km sells for….. it is nowhere close to $14,000.  I could save myself thousands by selling privately.  Yes it is a bit more of a hassle but we are talking THOUSANDS of dollars, nothing comes easy people.

Anyway we went back and forth a bit and he said I could bring the Pilot back in and he would shop it around.  As you know by now I enjoy the back and forth deal process so I brought it back in.  I dropped back (after another test drive) and he told me that he was getting a smell of coolant which I would have to get fixed before anyone would look at it, he was concerned I had serious engine trouble he said.  Turns out I had a coolant line clamp that was rusting so $250 later Honda had my $10 coolant line clamp fixed.  I let him know it was fixed and he said the $12,500 offer still stood.  I have no idea if he had any intention of giving me more than $12,500 or if he just wanted me to come back in, but in any event I still wasn’t trading the Pilot in for $12,500.  In a later email he referred to a trade of $12,000 so I lost $500 somewhere along the way.  That was the end of trade in adventure #1.

STRIKE 1!

#2 Subaru – A couple of weeks later I made a visit to Subaru, my mind was switching back to needing a 4wd vehicle.  I made an appointment to see a salesperson who I contacted via email. On my first visit he was a no show and second time he was busy so I just dealt with someone else.  They have a big shiny new dealership but seem to have a salesperson shortage for some reason.  Anyway the guy said their finance guy would look at my vehicle and give me an idea of what I could get on a trade.  He asked me what I was looking to get for it, I told him I was expecting Canadian Black Book Trade value.  Obviously they want to know your limit and then get the vehicle for much lower than your limit.  Normally I would not have said anything but I figured I would try this to see how it worked.  So the trade in guy looked at the vehicle, got on the phone, went to Black Book website http://www.canadianblackbook.com/ and offered me a staggering $10,000.  He went as far to say that they would only sell the vehicle for $14,000.  I am a reasonable person, I am not a stupid person, he was talking to me like I was a stupid person in my opinion.  I told him he was way off the mark and left.  The salesperson emailed me the next day saying he understood they were a bit off on their trade in estimates.  I emailed back saying they were over $2,000 off the trade in offer I had from another dealer and never heard back from him.  If I decide to get a Subaru in the future I will just get a different salesperson. 

STRIKE 2!!

#3 Toyota – Ok, so there are good deals happening on RAV4’s and I was still curious if there were any better trade offers out there so I went off to Toyota.  Salesperson I dealt with is great, nice guy, seems very honest.  He sent his guy out to get me a trade estimate and it came back at $12,000…. There was a definite trend emerging here.  It was at this point I figured I would not be trading the Pilot and decided I would go get the brakes done on it and hunker down for the winter.  Then all of a sudden I got a call from Toyota sales guy indicating he may be able to get a better trade offer through one of his other appraisal people…. This seemed strange but I said go ahead, then I mentioned I just went and got a full brake job on the Pilot and I felt the wind come out of his sails.  I guess he figured this means I would be looking for another $1,000 on top of the better trade offer and he was right.  I never heard back from him either….. maybe stories are getting around about the difficult guy with the beautiful black 2007 Honda Pilot EX. 

STRIKE 3!!!

#4 Kia – I just couldn’t resist trying to see if I could top the $12,500 offer from VW.  The Sportage looks kind of cool, has a new turbocharged engine and had good rates (its no Honda pilot mind you) so I figured I would take one out and let them make me an offer on the Pilot.  Again they asked me what I wanted, I gave a vague answer then I waited 15 minutes for some back room talks to take place and salesperson reappeared with an offer of $12,500.  Now I am sure they are all in cahoots, I am also sure that $12,500 is all I am going to get on trade for the pilot.  He tried a few common sales techniques on me but as usual I just said I would think it over and left with his offer scribbled on the back of his business card.

STRIKE 4…….

This does not mean I won’t go to other dealerships just to gather more trade in stories however so stay tuned for further updates!

Here is the actual Black Book Trade Value report for my Pilot:

Your trade-in estimate based on :
Vehicle :	2007 Honda Pilot EX 4D Utility 4WD
Distance travelled :	94000
Options :	DVD Entertainment System
Low † :	$16,142
High † :	$18,562

I don’t see $12,500 mentioned here anywhere……

2012 Toyota Camry Info

New Car Deals-

Toyota Canada (http://www.toyota.ca/) has pricing up now for the 2012 Camry.  The base LE Model is actually $1,610 less than the 2011 LE ($23,700 compared to $25,310).  The fully loaded 2012 XLE V6 is almost $5,000 less than the 2011 XLE V6 with Navigation, I figured I was missing something when I checked but that seems to be right.  That being said you will pay $10,000 more for the 2012 XLE V6 compared to the 2012 LE.

Unfortunately the lower price will not translate into less coming out of your pocket.  The 2011s current have rebates of $1,500 and 0% financing for 5 years, compared to 4.8% financing with no rebate on the 2012 model.  So in the end you will end up paying $55 more per month ($3,300 over 5 years) for the 2012 LE but only $22 more per month for the fully loaded V6 XLE model.  If you are looking to lease the rate differential is not as large (4.9% and 1.9%) and the 2012 SE will only run you about an extra $15 per month over the 2011.

The Camry is all new for 2012, looks better (kind of more like the Accord) but I'm not sure it is worth the extra $3,300 if you are thinking entry level model.  Fuel economy is up about 10% (so that could save you a few of those bucks you pay extra). 

So that's the scoop on the 2012 Camry for now, the 2011 base models are priced right if you want a nice low frills (and kind of boring looking) mid sized sedan.

Ford Escape XLT Pricing Update!

New Car Deals-

I checked out the Ford Canada website, http://www.ford.ca/ yesterday I noticed they had no interest rates posted which generally means there is a new promotion coming.  I was right, they have something called "Winter Ready" that offers 0% financing and a winter care package (looks like snow tires) on Escape XLTs.  This is interesting because they still have delivery allowances of $4,000 with 5.79% financing on 2011 Escapes.  Basically they are running two different promotions on different years of the same vehicle.  The winter care thing also applies to 2011s.

So I did some calculating and the 2011 Escape XLT 2.5L 4WD comes out to a payment of $555 per month and the 2012 model comes to $563, the 2012 costs $300 more than the 2011 so basically both deals end up at the same place.  So if you are looking for an Escape XLT 4WD check out both models, I would say they will probably offer extra deals to move the 2011s.   There is also costco $1,000 still available.

Leasing Basics

Car Leasing Basics

Once you decide on a vehicle you will need to figure out if you want to buy or lease the vehicle.  Traditionalists will always go with the buy but leasing has maintained popular over the past 15 years or so.  If you are someone who likes to have a new vehicle every 3 to 4 years, doesn’t drive over 24,000 km and year and maintains your vehicle well then leasing may be for you.  If you are someone who keeps vehicles a long time or puts on a ton of km’s per year then leasing is not for you. 

When you lease a vehicle you pay for the portion of the vehicle you use.  There are three basic components to the payment you will make:

Vehicle Price

Interest Rate

Residual Value (Value of vehicle at the end of the lease)

Term

What you pay for is the difference between the vehicle price and residual value taking into account any interest charges.  Of course vehicles depreciate more quickly in their first few years than in later years.  With a four year lease, the residual is normally between 35% to 50% of its original price with vehicles I have compared, meaning your vehicle is predicted to lose anywhere from 50% to 65% of its value after four years.  I have found Honda, Toyota and Volkswagen (especially diesel models) to be near the 50% mark in residual with Ford’s being on the lower end closer to 40% and Hyundai way down around 35%.  As a result Honda’s and VW are often good lease deals as long as the interest rates are reasonable, Hyundai not so much.  I also found Hyundai and Kia (really the same company) to be actively promoting against leasing in the dealership; they also currently have 3.49% lease rates compared to 0% purchase rates on most of their vehicles. 

If you think leasing may be for you make sure you get details on residual value (you want this to be as high as possible, for a four year lease you are aiming for 50% of purchase price) and interest rate being charged, if they seem reasonable then leasing may be the way to go.  One thing you will find is that as a model year ages the lease rate will normally drop BUT the residual will also drop because the vehicle is aging and may not be worth as much in 4 years as it would have been 8 months ago.  So while it may seem like the lease deal is getting better it may not be or at least not by as much as it seems.

The problem I ran into with my last lease was excess wear and tear charges (see End of Lease Time on my Pilot post).  I will be posting a video of my Pilot in the near future and show you what they were trying to charge me for.  With my previous three leases I was not charged any excess wear and tear.  So my only advice may be not to lease a Honda because they try to screw you in the end, although the actual lease deals from them up front are pretty good.  I think things are after being tightened up a bit on the lease end process in recent years.  If anyone has had end of lease wear and tear charge stories please let me know about them.

About three years ago when car companies started having financial difficulties they increased lease rates to sway the customer away from leasing and into purchasing.  One of the results of this is a current lack of good 3 to 4 year old off lease used cars right now.  A good deal on a used car is not as easy to find as it once was.  Lease rates are very competitive right now, still slightly higher than purchase rates in most cases but not by much.

So to summarize, if you want to drive a new car every few years, don’t drive too much and look after your vehicle then leasing may be for you.  If you do not fit this profile then leasing is not for you.  If you have any questions please let me know.

Note:  I am not going to get into leasing for business purposes here, this post is intended for regular people like you and me. 

Interest Rates

Vehicle Interest Rates-

If you are looking at two cars of similar price but different monthly payments the difference is due to interest rates.   For illustration I will be using a car priced at $30,000 because the five year purchase payment with 0% interest is a nice round $500.  ($30,000 / 60 payments = $500)

When you pay interest on a vehicle you are paying the interest on the balance you owe on the vehicle over time.  Initially you are paying interest on the entire balance and by the end of the five years you will not be paying any interest as you reduce the amount you owe on your vehicle to 0.  The total interest is divided evenly over all payments so your total payment is the same each month.

A quick way to approximate the amount of interest you will pay per month on a five year purchase is to multiply the car price by the interest rate, multiply this by 2.5 and divide by 60.  Its not exact but it will be close.  Example ($30,000 X 0.05 X 2.5 / 60 = $62.50), with this example at 5% interest rate you will pay an extra $62.50 per month, the exact figure using a payment calculator is around $66. 

On a $30,000 vehicle for every one percent of interest you will pay an extra $13 per month approximately.  May not seem like a lot but using the 5% example above, this is an extra almost $4,000 over the five years...... that is a lot.  Of course as the price of the vehicle goes up, the total interest payable will go up accordingly.  So if you buy a $60,000 vehicle you will pay about $8,000 in interest over the 5 years at 5%.

Most dealerships these days are offering 0% or close to 0% financing on many of their vehicles (newly released models may be slightly higher).  Later posts will discuss specifics of interest rates at different car dealerships.  The one constant anomaly these days is Ford.  Rather than go the low rate route they have been using Employee Price Discounts and Delivery Allowances to reduce their car prices over the last several months, they also use Costco $1,000 rebates hand in hand.  Ford has the most complicated pricing schemes from month to month.  Both between models and even different trim lines of the same vehicle will have different rates and discounts.  Whatever they do it must work because every second SUV vehicle you see on the road these days is a Ford Escape.  In September, Ford had 4.49% financing but up to $5,765 in discounts on Limited trim Escapes, a decent deal no matter how you look at it.  Of course the Escape is dated and a new model is expected out shortly.

Whether you get the good deal from low rates or deep discounts the important thing is to be aware of the interest rate you are paying and any discounts included in the vehicle price.  Ask the salesperson to tell you the total interest included in the payment you will have to make. Again, check the dealer website before you go in so you know what to expect, most dealer websites explain the vehicle payment details better than the salespeople in the dealerships.  Interest rates can make a significant difference in the total you pay for your vehicle.

Top 10 Car Buying Tips

Car Buying Tips-

I have made some general observations about car buying from my experience over the past while.  These are my top 10 advice tidbits.

1. There is basically no negotiating on car price any more for a new car.  You will be paying msrp or very close to it (less any available cash discounts) like it or not.  What you need to focus on is the extras they may try to charge you for.
2. Often times there are cash incentives / discounts available, make sure you check vehicle websites for available incentives on the car you are interested in.  The salesperson may or may not mention the cash incentive up front.  I will be further detailing cash incentives in a later post.  You can be sure if there is a cash purchase incentive available there are also low interest rates being offered if you use the dealer financing, the dealer financing with no discount almost always works out better than the cash incentive unless you happen to have extra cash laying about.
3. Make sure you know exactly what is included in the price of the vehicle you are interested in.  Some dealers include expensive undercoating, admin fees, extended warranty, unwanted options and anything else they can think of to charge you more.  It might be only "$10 extra a month" but that adds up to $600 over a five year purchase.
4. Never start negotiation with the monthly payment, or now the popular bi-weekly payment.  The dealer wants to give you the lowest number possible to consider, so instead of the $30,000 purchase price they focus on the $250 bi-weekly payment.  First thing you need to nail down is the purchase price and every penny included therein.  Once you know what they are including you will know what you can back out of it.
5. Try to  make sure you know exactly what options you are prepared to pay for before you go to the dealer and stick to your guns.  If you are considering a certain model make sure you test drive that model.  If you test drive the fancy model with sunroof, bigger engine and navigation it will be difficult to go back to the base model.... take my word for it.
6. Don't be pressured to commit to a purchase.  The dealer will not run out of cars (well unless they need parts from Japan to make them) and you might end up buying something that is not exactly what you want.  This is a long term commitment of some serious funds so make sure you get what you want.
7. Don't fall for the old line that they don't know how long the deal will be on for blah blah blah.  They may not know but I have been tracking car prices for the better part of a year now..... they don't change much.  New programs normally start on the first of the month, many go on for months and months.  I will be detailing this in a later post.
8. New models cost more than old models.... If the 2012 is a vast improvement over the 2011 then it may be worth paying extra but if not then don't.  Dealers want to move the old model to get ready to sell the new model and normally you will see interest rates drop as the model year ages.  Quick example, one week ago 2011 Honda Accord 0.9% financing, now 2012 Honda Accord 4.99% financing.  The vehicles have very similar (maybe same) MSRP but the 2011 costs $60 less a month or $3,600 over 5 years due to lower interest rates.  Look at them.... they are the same car.  Do online research to see when new models are due out, its a good time to buy the old model if it is what you want.
9. Find a salesperson you feel comfortable with.  If you don't like the one they send to you then tell them to send you another.  Remember this person will be making hundreds if not thousands of dollars from you, make sure you like them.  My partner bought a Mazda 3 last year, I couldn't handle the sales guy, he was just so fake, always smiling like a Cheshire cat.  I told them to give us the nice lady salesperson and they did no problem and we bought a car from them.  (I wonder if she got all the commission???)
10. Make sure you shop around.  In St. John's there is basically one dealer for one type of car (with a few exceptions like 2 Ford dealerships next door to each other.... go figure).  But Clarenville, Gander, and Grand Falls all have major car dealerships.  They may offer better deals and have a different selection.

I have others to share but these are the first 10 that come to the top of my head, hope they help!

End of Lease 2007 Pilot - Excess Wear and Tear

Excess Wear and Tear-

So I received a letter from Honda in February 2011 reminding me that my lease was soon due to expire and I should consider my options.  Of course you have 2 options.... Keep the car or give the car back.  If you want to keep the car you simply send a cheque for the buyout amount to Honda Finance or if you want to return it you arrange for a post-lease inspection and they send you a bill for any excess wear and tear.  I downloaded the Honda wear and tear guide to get an idea of what I would be in for and figured I would definitely get nailed for a few small dents and scratches but didn't think there would be anything major.

At that point I really had not made my mind up about keeping or returning the Pilot, I really liked the Pilot but it is a bit hard on gas (to be discussed in a later post) and I had absolutely no luck with used cars in the past so I was a but gunshy.  On the upside I knew it was well maintained and cared for and the residual was less than I would have to pay for a used 2007 Pilot on the open market.

So I arranged for the inspection guy to come, he came to my house after work which was actually very convenient.  He was nice enough but not friendly mind you.  I felt like he was violating my vehicle, checking for every scratch and bump, being critical at times but that was his job.  Still, I didn't like it.

He pointed out some surface rust by the bottom of the door where you step into the vehicle I didn't notice before; I knew that would be a few hundred bucks for sure.  Overall the only thing to fix on the vehicle was one broken door lock, other than that just the two rust spots and some dents and scratches.... I figured no big deal.  So he went over the inspection with me, I signed it and waited for the bad news.

I was reasonably expecting a bill for five or six hundred bucks at which point I could go to a local body shop and get everything fixed up for half that price.  Well I got a bill for over $1,800, plus $500 allowance for the door lock!   I was aggravated beyond belief.

I was totally peeved at that point, but it did make my end of lease decision quite easy….. I was keeping the Pilot.  Seriously almost 2 grand for some minor dents and dings! Subsequently to this I received an email from Honda asking how my end of lease experience was and I told them exactly what I thought of their lease end experience.  I felt like I was being robbed is how I felt and I told them so.  I could have probably gotten everything fixed up for less than a thousand but that wasn’t the point.  I was looking at maybe going in to Honda to see if they could cut me some slack if I got a CRV but I was so aggravated at everything Honda I never bothered.  Also, the CRV didn’t appeal to me at all, it’s just too boring looking and underpowered in my opinion (more on that in a later post).

So shortly thereafter I went to the bank, got myself a loan and bought the Pilot.  Before and even after this I visited almost every car dealership in the St. John’s area looking for a new vehicle.  My posts over the next couple of weeks will discuss everything from the dealerships, interest rates, sales tactics and miscellaneous info related to new car buying / leasing.  I am still considering getting a new vehicle but I have the feeling I won’t be getting rid of the Pilot any time soon.   Below is the actual end of lease inspection report, you will notice the $500 extra was to fix a broken door lock.

Abnormal Wear

<><> <><> <><> <><> <><> <><> <><> <><> <><> <><> <><> <><> <><> <><> <><> <><> <><> <><> <><> LN Action Description of Abnormal Wear and Condition Mech Hours Lbr/REF Hrs Paint Hours Parts Sublet Reserve Photo 1 N/C Exterior Bumper/cover-rear Scratch Thru Paint 1/2 inch 2+x 0.0 0.0 0.0 0 0 0 2 Repair Exterior Rocker Panel-left Rust 12 inches or more 1x 0.0 0.0 0.0 0 $ 250.00 0 3 Repair Exterior Rocker Panel-right Rust 12 inches or more 1x 0.0 0.0 0.0 0 $ 250.00 0 4 Repair Exterior Quarter Panel-right Rear Dent Thru Paint 4 inches 4x 4+ 0.0 0.0 0.0 0 $ 250.00 0 5 Repair Exterior Quarter Panel-left Rear Dent Thru Paint 2 inches 4x 0.0 0.0 0.0 0 $ 250.00 0 6 Repair Exterior Bumper/cover-front Scratch Thru Paint 2 inches 3+x 0.0 0.0 0.0 0 $ 180.00 0 7 Repair Exterior Door-left Rear Chip Thru Paint 1/8 inch 9+x 0.0 0.0 0.0 0 $ 75.00 0 8 Repair Exterior Door-left Front Chip Thru Paint 1/8 inch 9+x 0.0 0.0 0.0 0 $ 75.00 0 9 N/C Exterior Door-left Front Scratch Not Thru Paint 2 inches 2+x 0.0 0.0 0.0 0 0 0 10 N/C Exterior Hood Chip Thru Paint Less than 1/2 inch 5+x RUSTY 0.0 0.0 0.0 0 0 0 11 Repair Exterior Fender-left Front Scratch Thru Paint 2 inches 2+x 0.0 0.0 0.0 0 $ 180.00 0 N/C Exterior Door-right Front Ding Not Thru Paint 1/2 inch 2+x 0.0 0.0 0.0 0 0 0 13 N/C Exterior Door-right Rear Scratch Not Thru Paint 2 inches 5+x CAN BE BUFFED 0.0 0.0 0.0 0 0 0 14 N/C Exterior Door-left Rear Scuffed Not Thru Paint 2 inches 5+x CAN BE BUFFED 0.0 0.0 0.0 0 0 0 15 N/C Exterior Quarter Panel-right Rear Scratch Not Thru Paint 2 inches 3+x CAN BE BUFFED 0.0 0.0 0.0 0 0 0 16 Repair Exterior Rear Gate Dent Not Thru Paint 1 inch 1x 0.0 0.0 0.0 0 $ 250.00 0 17 N/C Exterior Rear Gate Scratch Not Thru Paint 1 inch 3+x CAN BE BUFFED 0.0 0.0 0.0 0 0 0 18 Check/Inspect Interior Power Door Lock Inoperable NA 1x rear door 1.0 0.0 0.0 0 0 $ 500.00 <><> <><> <><> <><> <><> <><> <><> <><> <><> <><> Mechanical Hours 1.00 @90.00 90.00 Body REP/REF Hours 0.00 @45.00 0.00 Paint Hours 0.00 @45.00 0.00 Labour Total 90.00 PARTS 0.00 SUBLET 1,760.00 TOTAL RECONDITIONING $ 1,850.00 RECONDITIONING CHARGES ARE SUBJECT TO APPLICABLE TAXES TOTAL RESERVE $ 500.00