New or Used: "Affirmative Action" on a Lease Payout?

Luiz writes:

Dear Steve/Sajeev:

I am a 35 year old elementary school principal, married with 2 kids (5 and 9), and a certified car nut who thinks and reads about them way too much, and who is a walking contradiction when it comes to cars.

Here are some examples: I appreciate older cars from my youth that are well-cared for, but I am not mechanically inclined at all, and don’t want to tinker with cars. I don’t like appliances like CamCords, but appreciate reliable machines. I dislike car payments, and fully understand the value inherent in keeping a car a long time, but can’t remember the last time I didn’t have a car note, as I’ve sold and bought too many cars to list here, all before their time. I don’t aspire to own a premium luxury ride like a BMW or M-B, but I sold my last car, a loaded-with-everything-and-a-stick, pristine, 2002 Protege5, with only 52K miles, when I became a principal in March of 2009 and wanted a new car with a bit more prestige. I know practically all the specs on any car in my price range (can’t go more than 30K max, as the wife has an ’11 Outback we’re happy with and plan to keep till the wheels come off-at least that’s the plan), but I buy cars too quickly. I could go on and on.

So, in March of 2009, I wanted something sporty, with a tad bit more prestige, that could hold a family of four, and wasn’t too common. I narrowed down my choices to the TSX, or the GLI/GTI. Test drove the TSX, liked it. Test drove the GTI twice, but leased a GLI with DSG as the deal was much better than the essentially-same GTI. My lease is up in 8 months, and the car has been fantastic, with ZERO issues, and a letter from VW stating that my car’s DSG is covered for 100K miles or 10 years due to similar models having issues. I also enjoy the car and its performance, which is enough for me, as I live in crowded northern NJ, and take trips into NYC and the outer boroughs from time to time; there’s not much space here to go flat out. This was my first lease, and the buyout will be 15,000 including tax, for a 3-year-old GLI that will only have about 24,000 miles come March of 2012. So, should I?

1. Buy the GLI, which flies in the face of what everyone says (don’t keep a German car, let alone a VW, outside of the warranty period)?

2. Walk away and buy something cheaper, so I can concentrate on paying down the Outback (I have a SAAB specialist about 3 miles from my house who offers clean SAABs with 2-year warranties, for roughly 3-8K dollars, that I drive by and wonder about)?

3. Walk away and lease something cheaper (my current payment is $350 a month), knowing that I may have to give up some accessories, power, etc, in order to go down in price?

Please help,

(oh, BTW, I’m 6’3,” and it’s quite a bitch to find a car that fits, that isn’t a Chevy Express)

Steve answers:

As someone who was fortunate enough to escape from northern New Jersey, I would encourage you to spoil yourself a bit. The weather sucks. The cost of living sucks. I won’t even mention the horror that is daily commuting to NYC.

I would keep the car. First off you want to get out of the debt trap. At least you pretend to have this goal in mind. So why not do it?

Second, that price is pretty good for a retail transaction. You like the car and know it’s history. Plus VW has seen fit to make up for their recent quality transgressions. To me this all sounds like a winning combination.

Keep it. Pay it. Worry instead about why the title of your work also includes ‘Affirmative Action Officer’. I would fear that more than I would fear any VW.

Sajeev answers:

The buyout on your lease is surprisingly good. Which makes me wonder if the down payment or monthly bill during the lease were brutal? But I digress…

Odds are you can get just what you need in a $15,000 Mazda 6 or Camry SE (only the SE) but perhaps that’s more trouble than it’s worth. Sure these vehicles are sporty and known for far better long-term value, but the time value of your money hunting for one is a difficult number to quantify.

If this is a “keeper” and long-term costs are a concern, you’d be wise to dump the GLI. I don’t even want to know the cost if the DSG fails at 100,001 miles. Then again, will you really keep it for that long? And the Camry SE is still a Camry.

Don’t listen to me. Listen to Steve.

Need help with a car buying conundrum? Email your particulars to sajeev@thetruthaboutcars.com, and let TTAC’s collective wisdom make the decision easier… or possibly much, much harder.