By on December 10, 2013

ttac

The three year lease.

It entrances and traps the most spellbound car aficionados into a monthly payment that keeps them at the altar of the car payment.

Is that a bad thing? Well, depends on the way you want to look at it. What can’t be argued is that both sides get what they want, and after three years, that customer can choose to stay with the manufacturer or go somewhere else. To me at least, that seems like a fair bargain.

But what if the automaker could offer a better deal? For both parties?

Per mile cost of ownership models are still in their infancy. Yes, there are tacky penalties that are added to most lease agreements in the U.S. and elsewhere. Other countries have also developed unique pricing models, such as in Israel. Where car buyers (in the absolute loosest meaning of that phrase, since most cars are leased) get to own a car for a specific period of time, and then skip the last ‘ballon payment’ and give it back to the dealer who initially sold it.

What I’m thinking is a bit simpler than that.

You have a sliding scale. New cars would start off on the same type of leases that exist now, except they would be marketed on a per mile basis.

Lease a Corolla for only 25 cents a mile! Blow your financial brains out on a BMW for only 59 cents a mile! There would be minimal mileage requirement, say you have to pay for at least 10,000 miles a year, and all the other usual small print that comes with a typical lease.

Except it wouldn’t be a lease. You would be renting it and have an automatic draw done on your credit/debit card on a weekly basis. No hassle. No haggle. Just a flat rate for as long as you want to own drive the car.

Sounds a lot like the past standard rate plans we have with cell phones? Well, sure, but a driver can do a lot more damage to a car than a cell phone. The manufacturers want to protect their own assets, and auto insurance companies don’t make allowances for the lead foots and pigpens of the modern marketplace.

So with that in mind I want to immediately inform you that there will be a few (cough! cough!) restrictions and opportunities that would come with the contract.

Let’s start with the good news. Low cost and no obligation.  Insurance, maintenance, taxes… everything except the source of propulsion would be paid for with your per mile rental price. If either you or the automaker are unsatisfied at any time, simply make the necessary arrangements and move onward with your lives. No debt. No worries.

If you don’t like the way the car drives, looks, steers, looks or smells, you can throw that smelly fish back in the sea of automotive inventory. Of course that luxury would come at a premium on your per mile price. But the actuarial scientists will figure out a way to make it all work for you.

They may also ask for a few healthy modifications to your driving style.

For starters, the speed limit IS your limit. There will be a little warning light that will post on the dashboard for excessive speeds.

During such times your car may be ‘throttled’ to limit the excessive acceleration. Sounds Draconian? Cell phone providers have been doing it to you for quite a while now.

You could press the emergency button to override this feature, which would immediately notify the nearest law enforcement officers that you need to proceed to the nearest medical center. As a public service you will be escorted. and of course, a false alarm associated with abuse of the manufacturers property will result in immediate loss of use of said property, speeding fines, public endangerment fines, a bill for unwarranted use of public services, remedial driving classes, community service, and an uncomfortable visit with the dour men who wear black robes.

Then again, what’s there to worry about?  You, Mr. Customer, aren’t a lawbreaker. So obviously you won’t have to worry about any of this.  As a courtesy, let me inform you of a few other things you won’t have to worry about.

Certain irrational driving behaviors that can damage the vehicle, such as shifting from reverse to drive, will first be met with a warning. Then a fine. Then the disabling of the vehicle with nearby officers en route while a driver training video blares forth on the dashboard.

It may be this one for distracted driving.

YouTube Preview Image

This one for excessive speed. (Note: NSFW)

YouTube Preview Image

Or even this one in the case of an odd vehicular malfunction.

YouTube Preview Image

Long story short, there will be no hooning with these rented rides. No texting. Hell, you better be wearing gloves tighter than OJ’s to make sure it stays in clean condition as well. The low cost of the rental is entirely dependent on a high resale value, which means you must walk that line you agreed to when you signed on the dotted line.

What else? Seat belt? Emergency brake? Mirrors? Turn that phone off!

And a 5 cent per mile credit for good behavior… at least for now…

Here’s the brutal truth folks. I know that there are a few (cough!) exaggerations with this model. And yet, if the marketplace eventually moves forward with driverless vehicles, virtually everything I mentioned above may become a reality for millions of people who see cars as little more than transportation modules.

In otherwords, the majority of today’s automotive market.

Most consumers don’t want to own their cars. They don’t want the debt of a consumer loan. They don’t want to pay lump sums in taxes, insurance and a long line of licensing fees. And they certainly don’t want to be caretakers of a piece of property that they don’t even know how to maintain.

Some of these consumers want low cost while others want excitement. Not so much ‘driving’ excitement, but ‘fashion’ excitement. They want to be seen and be seen in the hottest fashion accessory, while the other folks just go about their business in a comfortable minimal cost module.

Enthusiasts, like you and me, are a declining market. I don’t believe that this is the case because enthusiasts aren’t willing to pay a direct premium for the joy of their ride. Miatas, Vettes, Mustangs, Camaros and the FR-S all call out to our joy of driving. The manufacturers aren’t the ones letting us down here.

What’s killing the enthusiast is the cost of that fun in the form of revenuing schemes by local and state governments, higher taxes and fees, substantial higher insurance costs, and that hidden tax that comes with getting nailed on the open road. This is especially true for the young adult enthusiast. One bout of responsible driving at a high rate of speed for them can result in a four figure blow to their bottom line. Most young people can’t afford that, and once they get stung with that venom, many will opt for the low cost lemming model.

I think in the future a lot of manufacturers and third parties will embrace a permanent rental model. The car ‘note’ will be sold to a third party in much the same way as collateralized debt obligations and your own car note are already sold to third parties. They will be able to handicap you based on your past driving behaviors, and a trade will be made.

Your freedom, for less money.

I know most of you wouldn’t make that trade. It’s the ones who have other priorities in their life that I’m not too sure about.

Would it be a bad thing?

 

 

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81 Comments on “Hammer Time: Financial Hypnosis On A Per Mile Basis...”


  • avatar
    seth1065

    I know a few people in Canada who rent by the month rather than own because of their driving records their ins rates would be sky high so they rent with everything included ex gas it works for them so this is not much of a leap , but I drive 40,000 miles a year and would get killed that is why I can not lease

  • avatar
    Landcrusher

    Insurance company is too stupid to go along.

  • avatar
    Syke

    I’ll admit, I’d be tempted on that scenario for my daily driver.

    I’m going to be looking for a new car next spring or summer. New this time, as I haven’t bought a new car since my 2000 Cherokee, and I’m really in the mood for one. Since reality states that cutting a check for the full purchase price limits me to something like $10k, I’m going to be financing.

    As I’m scheduled to retire in three years, it’s going to be a three year note. Which means I’m probably limited to a sticker price of about $20k. Which ain’t a hell of a lot in today’s market. Compact or sub-compact, and stay away from the high line interior.

    So, for the first time in my life, I’m seriously considering leasing. I already have a sports car and a pickup that are paid for, and will most likely be here for the rest of my life. I like the idea of being able to swap cars every three years (that’s how I lived in the 70′s and 80′s, only I was buying them back then), own something a bit more luxurious that my purchase budget would allow . . . . . and if the lease turns out to be a financial burden, at the end I turn in the car and drive the pickup. I certainly wouldn’t be locked in to the rental as my only transportation.

    And the driving restrictions? I’m talking a nice, calm bit of comfortable daily transportation. I’ve already got the sports car and two motorcycles when I want to cut out like the antisocial bastard I’m capable of being on occasion.

    Maybe it’s not the most nickle-squeezing form of car ownership. So what? I’ve got (hopefully) twenty years left. I want to spend those years enjoying what I drive, not getting my enjoyment by daily checkings of my bank account.

  • avatar
    schmitt trigger

    Utopian (or Dystopian) future?

  • avatar
    AMC_CJ

    They already do similar in the transportation industry with commerical vehicles. They rent/lease the trucks long term, we take of everything (permits, licencing, taxes, all maintance, etc.) If the trucks break, we can give them another one. The trucks are limited to a certain speed and RPM, but that can be changed if the customer wants to pay more. Any damage done to said vehicle is also charged back to the customer.

    A lot of companies just want something to get their product to and from, so they put their employ in the vehicle to hold the steering wheel, we take care of the vehicle itself. We even have services to put a steering wheel holder in it if they want that too.

  • avatar

    One of the contemporary assertions that I take issue with (along with the “all cars look alike” trope – has anyone looked at a ’50 Chevy/Pontiac/Oldsmobile/Buick in silhouette? Talk about cookie cutter) is that “people today aren’t interested in cars”.

    Take for example the Mustang versus the Falcon. In 1964/5 Ford sold around 600,000 Mustangs (for a combined year and a half production). In that same year and a half, they also sold close to 350,000 Falcons. Not a bad number against the genre defining Mustang, I would say.

    Fast forward to 1981, when the Escort bowed. Ford sold 182,000 Mustangs, and 320,000 Escorts.

    So what is my point? People have always been predominately interested in cars as appliances. I think that many people look back on the halcyon days of performance super cars racking up huge sales, but at the end of the day, John Q. Public went home with a straight six Falcon, or a I4 Escort more often than not.

    • 0 avatar
      bigdaddyp

      Yeah, but…things are not the same now as they were then. Insurance is much steeper and the cost of buying the car now takes a greater percentage of your yearly income.

  • avatar
    28-Cars-Later

    The article is two thumbs up Steve.

    Part of me really wants to start looking into how those OBDII/GPS sensors Progressive is using actually work. The future is a virtual prison of constant rent and tracking (at least in the West).

    • 0 avatar
      Macca

      I haven’t done any research into Progressive’s OBDII port readers – but I have my own personal OBDII Bluetooth reader that connects with the Torque app on my Android phone. You can purchase a Bluetooth port reader on Amazon for $20 or less – it just needs an app that can communicate and receive the data. It’s especially handy to check SES lights.

      The Torque app logs your car’s various measurements and plots them on a map of your route (or even in Google Earth as a .kmz file). This includes vehicle speed, acceleration/deceleration, throttle position and various other data measured by your engine/ECU.

      My assumption has been that Progressive’s dongle works in a similar fashion – by plotting your vehicle speed against known speed limits and your accel/decel habits approaching intersections and such to judge how ‘safely’ you drive.

      • 0 avatar
        28-Cars-Later

        Thanks for the detailed reply, Macca.

        • 0 avatar
          Kinosh

          On it’s own, I’m not sure most OBDII ports will give you GPS information, Macca’s Torque app is using GPA data from the phone.

          However, it’s not to say its not possible. Several pins on the OBDII connector are left to “Vendor Option”. If the progressive dongle works on all makes/models, then I’m not sure how they would parse out the communication protocol it is being plugged into and which pin has (if available) GPS data.

          “Vendor Option” pins are why you get more information if you use a manufacturer’s reader vs a generic scanner (for example, Toyota Techstream).

          • 0 avatar
            28-Cars-Later

            I did not know about the “vendor option” but it makes sense, thank you Kinosh. So the car could possibly be providing GPS data via the OBDII port as early as 1996? Interesting…

          • 0 avatar
            cognoscenti

            My retired mother in-law used the Progressive dongle and absolutely loves it. I doubt that it has GPS data, though. She uses it in a 2003 Honda Accord. I think it is only measuring accel/decel forces, peak speeds and possibly RPM. She also says that she receives a discount for not driving after 10PM too, so there has to be timestamp recording of some kind.

          • 0 avatar
            28-Cars-Later

            Typically when you do any sort of software logging there is a time stamp literally down to a tenth of s second. Essentially they are logging the car’s computer. Question on the Progressive system if you can answer it, how do they retrieve the data from the device?

  • avatar
    Richard Chen

    Take this lease concept to the extreme, and we arrive at Google’s proposal: self-driving cars offered via a ZipCar-like service, but capable of delivering itself.

    http://www.newyorker.com/reporting/2013/11/25/131125fa_fact_bilger?currentPage=all

    • 0 avatar

      article well worth reading.

      To pick up on Richard Chen, there will then be far fewer cars on the road, at least in the populous parts of the country. This will mean less traffic, particularly in cities, where cars looking for parking can account for ~20% of the traffic; and it will mean much easier parking since the self-driving zipcar pods won’t have to park.

      But the market for fun, self-driving cars may dry up, or perhaps there will be enough of us to maintain such a market. But will the enthusiast cars be more or less expensive than now? Will insurance cost a mint or not? etc.

  • avatar

    Depreciation is more than just miles. Time is a big factor, perhaps even bigger than miles in some regards.

    Leasing isn’t for everyone, and high end cars don’t lease as well because the market for used high end cars just isn’t great. Leasing as structured in the US now is fairly solid for the customer. You get a guaranteed future value based on miles and time and market for the car, a fee for leasing and then make monthly payments + rate and tax.

    Further, going to a “flat” price on anything with a car in order to avoid negotiations is just silly for the customer. Everyone will pay the “new” MSRP then. So long as there are negotiations the customer has the ability to pay less than this. Flat rates means the “deal” goes away.

    What I don’t see in the article is what you feel is wrong with current lease models other than an unpredictable market for future value, something which I don’t see as solved by the suggestion. Most people already are at the alter of car payments. I don’t see to many customers trading in cars they own outright. Perhaps required finance classes in high school would be a better fix!

  • avatar
    Pch101

    The luxury car market in Germany is supported by leasing. The Teutonic ubersedans that induce lust among enthusiasts wouldn’t exist without it.

    A stronger leasing market in the US would probably lead to nicer cars generally, but at higher prices. I personally prefer what we have now, but leasing could be a pathway to greater profits for the automakers.

  • avatar
    TorontoSkeptic

    I like it, for 3 reasons:

    1) this is basically expanding the business model of ZipCar, which is successful and popular if somewhat niche and limited to super densely populated areas. Pay by the mile (or hour) makes sense for a lot of people and including insurance/maintenance/registration is a great benefit for time-strapped people who don’t want to comparison shop insurance, stand in line at the DMV, etc.

    2) It takes some of the scumminess out of the new car wheeling-and-dealing environment. If you don’t want to get involved in negotiations with obnoxious sales guys, this is a big win.

    3) It sounds like it would make used cars a lot less attractive. Then used car fans like me will have a lifetime worth of used cars to buy cheap since no one else wants them!

  • avatar
    RS

    What about renting used vehicles – with a warranty?

  • avatar
    thegamper

    Rather than change the basis on which your payments are arrived at, I would much prefer direct purchasing, cutting out the dealership model. A mainstream manufacturer that can allow a customer to build, order, and pay online for a SET PRICE, not a negotiated price, could have a big consumer hit on their hands. Totally transparent pricing, delivery and maintenance. I can dream.

  • avatar
    SCE to AUX

    I don’t like any part of it.

  • avatar
    Toad

    In my humble opinion, most people have no idea what their car really costs them per month (or mile) to operate and/or own; if they actually got one monthly bill that combined all expenses they would probably have a heart attack.

    As it is most of us get separate bills for car payment/lease, insurance, property/sales/misc taxes, registration, maintenance, etc at separate times and odd intervals that mask the true cost of ownership. In addition the car payment itself is a result of a mix of down payment, trade in, rebates, F&I costs, and actual purchase price that most consumers really don’t understand very well; that’s how the dealership F&I guys “four square” consumers into paying a lot more than they think they did.

    One monthly bill for your car sounds good in theory, but in actuality might cause consumers to seriously cut back on their car expenses to the detriment of the industry and everybody attached to it.

    • 0 avatar
      Steven Lang

      I agree. This is why a direct daily draw with a debit/credit card(s) would be the more likely scenario.

      Automatic bill pay = out of sight, out of mind.

      • 0 avatar
        MK

        Yeah after all, this worked out very well for the .gov
        If each taxpayer had to stroke out a monthly check to cover their income tax and full amount of social security and disability tax there’d be pitchforks in the streets and the prisons would be full.

        But with EZ monthly withdrawals before you even know its there? It’s like it didn’t even happen!

        Steve, you do this and pretty soon you’ll be hanging with old Elon and dreaming up space rockets and cars that don’t catch fire when they run over a beer can. Good luck and remember the little people!

        • 0 avatar
          Steven Lang

          I already do direct draws on a weekly basis. In fact, most of my customers prefer to pay that way since it saves them gas and time.

          • 0 avatar
            Japanese Buick

            And you call yourself a BHPH dealer! I thought part if the point was to make them pay in person so they have to come to the lot on a regular basis.

  • avatar
    pragmatist

    I am puzzled by the significance of the young lady in the title picture. Then I was reading about the advantages of short term leasing over permanent commitment and realized this was heading for big trouble.

    Better of not trading current model.

    • 0 avatar
      sitting@home

      I used to work for the company that put this on a massive billboard alongside Highway 101 …

      http://www.about-face.org/take-action/your-voice/disgraceful-award-in-advertising/

      • 0 avatar
        28-Cars-Later

        That’s hilarious if not true. For some perspective on the website decrying the billboard, here is an article topic:
        “The Latest Outbreak of SARS: Short Ass Revealing Skirts”

        Then there’s the old saying with goes along with the billboard, if it flies, floats, or f****, rent it.

      • 0 avatar
        MK

        Lol, that site has GOT to be a parody!

        The letter to Coors is a earnest as an SNL skit from 1994. I’m expecting Cinder Calhoun to show up any minute.

        On a more practical note, once you’ve told a manufacturer “I would never buy your product” …. Baby they KNOW you’re not their target market anyway so WGAF!

  • avatar
    DC Bruce

    Maybe I’m dense, but I don’t see how this differs much from the current arrangement, except that, currently, the lessee pays for insurance and registration. Since insurability and insurance rates depend upon one’s age and driving record, the present system incentivizes people to be reasonably safe . . . by results not by how many times, or by how much, the driver exceeded the posted speed limit. Under Steve’s model, these costs would be socialized, which is why he proposes draconian penalties for misbehavior.

    For business owners, leasing simplifies accounting. The lease payment is a deductible expense, period. No fiddling with depreciation schedules and the like.

    For individuals, the lease more easily and clearly reflects the cost of car ownership (other than fuel, taxes and insurance, which are subject to a lot of variable exogenous to the car). You pay X dollars a month and Y dollars upfront, which if you amortize over the lease period and add to the lease payment is your cost of ownership. In particular, the lessor, not you assumes the risk of the car’s residual value at the end of the lease term . . . which is the big difference between owning for 3 years and then selling the car, and leasing for 3 years.

    I’ve never leased a car, because I am willing to keep a car 10 years or more; and I know that doing that is always cheaper than leasing.

  • avatar
    Charliej

    If I were younger, this would probably appeal to me. As an old retired fart, I like owning my car. No payments is better for us old folks rather than a perpetual payment system. I would imagine that most retired people living on the lower end of the income scale drive much less than average. Personally, I have a nine year old car that has 61,000 miles. At an average of 1500 miles per year, I will never wear this car out. Any other vehicle will just be a purchase for other reasons than need. I can see this working well for many, just not for me.

  • avatar
    jmo

    “For starters, the speed limit IS your limit.”

    I don’t understand why that would be required. It’s not something that Zipcar or Hertz currently do.

  • avatar
    roadscholar

    Still looking at the header photo. Will get back to you in a bit.

  • avatar
    Steven Lang

    Several reasons…

    1) If driverless vehicles are adopted, chances are you won’t be able to override their pre-programmed settings as it pertains to speed.

    I would also be shocked if the owners of the vehicles didn’t set the driving program to whatever speed limits are currently in place. The insurance company will most definitely insist on it, and the company providing the rental service will want to avoid the potential court cost (and traffic fines) that may come with excessive speeds.

    2) A large part of the success for this type of rental model is the preservation of the asset. At a given point, the domestic market may no longer have a demand for that vehicle as a rental. At that point you would need to either sell it locally, sell it abroad, or recycle the components which may already fit more marketable models.

    The difference in value between a clean condition vehicle vs. a below average condition vehicle is often times in the thousands per vehicle. This is an enormous expense that most automakers would love to avoid if they could help it.

    Finally, the USA currently has over 89,000 governments and 18,000 police forces. That’s not a typo. If obeying speed limits would help in the dissolution of say, 88,500 governments and allowed police officers to perform other public services, then I would be all for it.

    http://en.wikipedia.org/wiki/Local_government_in_the_United_States

    • 0 avatar
      jmo

      “A large part of the success for this type of rental model is the preservation of the asset.”

      But, the wear and tear that’s the problem is going to come from door dings, bumper tapping while parking, curb rash, kids scratching it up when they try to get their bike out of the garage, etc.

      None of your speed rules are going to stop that.

    • 0 avatar
      dtremit

      What insurance company? Any provider of this kind of long-term rental would almost certainly be self-insured, as are all major rental companies today.

      It would be much more economical for them to just recalculate your per-mile rate annually based on your demographics and driving record.

    • 0 avatar
      chaparral

      Steven,

      I was completely with you on this until I got to the “speed limit is your limit” rule.

      I don’t know of any rental car companies that limit your speed / acceleration / braking / cornering / time spent airborne. As Enterprise et al. own the cars, and the tech is obviously out there to do it, somebody at each of these companies decided that the benefits to them in reduced reconditioning costs / value loss added up to a smaller sum than they would lose in reduced rental fees.

      If it weren’t in there, and I could drive the thing as hard as I could get away with, that’s how I’d run a car – by the mile. It’s pretty close to how I do it now, with 950-1150 miles per month on a lease set up for 12,000 miles per year plus twenty cents per mile after that.

      • 0 avatar
        Steven Lang

        If driverless cars become common, you will most certainly see speed limits be limits for those vehicles due to the legal issues involved with providing that technology.

        • 0 avatar
          chaparral

          Wait, I’m not driving?

          That changes it completely.

          For a “home-to-work, work-to-home” car I might see myself climbing into my ten-cent-a-mile, 38 horsepower two-seater bus that plods along in the far right lane while I catch up on work emails behind the wheel.

    • 0 avatar
      Brian P

      Given the tendency in most areas for speed limits to be well below the actual traffic speed and even further below the actual maximum safe speed, restricting self-driving cars to the speed limit would be a big disincentive for people to get them! On a long trip, I’d be able to get there faster by driving myself … by exceeding the speed limit by the usual amounts that the police will tolerate.

  • avatar
    Steven Lang

    jmo, cosmetics are a lot less expensive for manufacturers and dealers to handle than the general public.

    I can get PDR work on a panel done for $75 to $100. The cost of major suspension work and a bad transmission (especially a CVT) is far, far more.

    • 0 avatar
      jmo

      Transmission wear is speed based? It would seem more bumper to bumper traffic based. Suspension wear would seem more pothole based than speed based as well.

      If you want to make it accelerometer based that would make sense. But, it would seem easier to just have an algorithm that would calculate the wear and tear based on driving style and adjust your rate accordingly.

  • avatar
    Commando

    Haven’t the Buy Here – Pay Here lots already adopted this model?

  • avatar
    olddavid

    Deep pocket dealers already do a version of this with in-house wholesale leases. That is a true closed end transaction with the store keeping the returned car and all the money factor. Not a new option. I believe Petersen, Heather and Howell started this nationally back in the 50′s for institutional and commercial customers.

    • 0 avatar
      Scoutdude

      I had a couple PH&H leases for company cars back in the late 80′s/early 90′s. It did not include registration and it was for set miles over a set period of time. My first vehicle had been used by a previous employee and where I lived/my territory meant that I drove more miles and despite the fact that it sat for a number of months before it was assigned to me I used up the miles before the time period was up. That meant as I got close to the 60K mark I parked my vehicle and started using another until the time was up on mine and then I dropped it off at the dealer when I picked up my new vehicle. The did handle all the maintenance though.

      I had a credit card of sorts that listed the vehicle and for things like oil changes, tires and brakes I just chose from the list of providers in my packet with the card, gave them my card and that was it. For repairs I had to call a 1-800 number before taking it to one of the providers. I believe that my company handled the insurance directly.

  • avatar
    Charliej

    I just thought of a problem with this model. A person was stopped and arrested for possession on marijuana. As is normal in these cases, the car was confiscated. The person arrested was not the car’s owner. The owner was a leasing company. The leasing company asked for their car and was told that it was not their car any longer. State courts agreed. The leasing company was just out of luck. The person arrested was acquitted of drug possession, but the city kept the car. Confiscation is not contingent on conviction. This is what the drug war has got us. Cities that are basically thieves, stealing from whom they can. I am glad to live outside the US at this time.

    • 0 avatar
      golden2husky

      Another reason why confiscation is wrong . I’d be ok with a conviction carrying a very high penalty, that if not paid, leads to forfeiture of the vehicle as means for payment. But the outright stealing of private property, even for a DWI is criminal.

      • 0 avatar
        Charliej

        I agree with you 100 %. However, if you look around the country, confiscation is becoming much more common. Since I no longer have banking in the US, when I visit, I carry cash. In many jurisdictions, carrying cash is presumed to make you a drug dealer and all cash is confiscated. It is then up to you to convince them that you are honest. Since they are not honest, it is hard for them to conceive of any honest people. As you may be able to tell, I don’t have much use for most cops. Here is a tip to remember about the police. To them, there are only three types of people, cops, perps and victims. When you are dealing with a cop, he is trying to put you in a group. If he decides that you are a perp, you have a problem. Cops do’t easily change their views. Be careful around cops, you can get shot.

    • 0 avatar

      I can see the leasing company kicking off a court case that goes as far as the Supreme Court on this issue. Either that or a collection of lobbyists from the leasing industry feather the bed with enough money to squeeze an exemption or two for leased vehicles and other property. If you own your car outright, then you’re just out of luck.

      • 0 avatar
        Madroc

        At least in my jurisdiction, a criminal forfeiture only trumps a perfected security interest if the holder of the security interest has reason to know the car is being used in the commission of a crime. For exactly the reason you state: it’s a property interest, and it can’t be taken away without due process. This may not be the law everywhere, although “State courts agreed” isn’t really a cite.

        As a practical matter, this manifests itself as BHPH lots routinely getting on the phone with the DA to repo the car and sell it at auction or to a different customer.

  • avatar
    davew833

    Not to derail this thread, but the picture of the model is a good illustration of the plastic surgery “epidemic” among young Asian women- particularly South Koreans- which this young woman appears to be. Surgery to create a more western-looking double-eyelid has been popular for a long time, but the latest trend is to upturn the corners of the mouth in some kind of weird permanent smile, which this model also appears to have had done. Here’s an interesting relevant article-

    http://www.dailymail.co.uk/news/article-2314647/Has-plastic-surgery-20-Korean-beauty-pageant-contestants-look-Pictures-contest-hopefuls-goes-viral.html

  • avatar
    sitting@home

    The reason I don’t lease or change cars too often is the state taxes. Here in California it is about 10% of any (even used) car purchase, which needs to be amortized over the period of ownership to get a true cost to own. Over the lifetime of an average car the state probably gets 20% of the original value in sales and title transfer taxes, so they probably wouldn’t be too happy with a sales model where the car never officially changes hands.

  • avatar
    Zekele Ibo

    If this is the future, I’d rather take the bus.

    I absolutely detest never-ending monthly (or weekly, or daily) payments. In fact, I actually did take the bus until I had enough to buy a used car for cash. I then continued saving until I bought a new car, again for cash, just this year. Insurance is paid yearly, maintenance paid periodically, gas when required.

    Debt is slavery.

    • 0 avatar
      28-Cars-Later

      +1

    • 0 avatar
      jmo

      “Debt is slavery.”

      That would depend on the interest rate. If you’re saving up to avoid paying 0% interest when CIP is 1.8% then you’re an idiot.

      • 0 avatar
        Zekele Ibo

        >> If you’re saving up to avoid paying 0% interest when CIP is 1.8% then you’re an idiot.

        I beg to differ: quite simply I don’t play that game. I don’t consider myself an idiot, naturally you are entitled to your opinion :)

        Here are some facts, judge for yourself: the car I bought was available with 0% financing for 84 months, no advertised cash discount alternative. Nevertheless I chose to pay cash. I know of two other people who bought the same car, but they used the financing. I believe I paid less overall than them, which indicates that there was at least a hidden cash incentive (it’s difficult to be precise as there were trade-ins involved in all three transactions). My guess would be a 5% to 10% cash discount. 0% financing is almost always a “fake” interest rate. That’s point one.

        Point two is more important, and it is this: I would have paid cash anyway (and turned down the financing), even if the price were the same. This does not appear to make financial sense (hence you calling me an idiot!), however there is an intrinsic (non-monetary) value in both simplicity and peace of mind. You may not place that value particularly highly (and you are free to hold that view), but I do – and I don’t feel like an idiot by making that choice. I don’t have to see my car through the lens of a monthly outlay, I won’t get screwed if I miss a payment (I have no payments to manage). A car purchase for people like us – car enthusiasts – is not about pure financials (otherwise we’d all be in Corollas). Freedom from debt and monthly outlays is worth a lot to me, and it greatly enhances the enjoyment I get from my vehicle. Does that at least make some sense? :)

        • 0 avatar
          Brian P

          I like your thinking.

          (I don’t owe anyone anything, either)

        • 0 avatar
          jmo

          “Is not about pure financials ”

          So, you admit it doesn’t make mathematical sense on a purely rational level.

          My only other objection is to your claim of a 10% cash discount. Numerous sources have claimed the opposite is true so I’m curious… as that 10% number seems very high.

          Me thinks you’re recalling something from 20 years ago when interest rates were much higher.

          • 0 avatar
            Zekele Ibo

            >> So, you admit it doesn’t make mathematical sense on a purely rational level.

            Yes, it may not make mathematical sense. However, I consider my method as being entirely rational. :) Again, it is the non-monetary aspects which come into play here, and any pseudo-monetary value you attempt to place on aspects such as simplicity is forcibly subjective.

            Some car enthusiasts pay extra for an exhaust note, or some other intangible aspect of a vehicle. I am always prepared to pay extra for simplicity and peace of mind. You may not agree with my choice, but I consider it to be legitimate. It is important to differentiate price from value.

            >> My only other objection is to your claim of a 10% cash discount.

            Like I said, this is the least important part of my argument, and the percentage is little more than a guess. I may be wrong, but to me it doesn’t matter either way. I definitely paid less than a friend for the exact same model (same spec, same year), but when you take into account the different trade-in scenarios, different dealership, different month… who knows if there really was a discount for my car over theirs.

        • 0 avatar
          Pch101

          There is no cash discount for cars.

          If anything, the dealers would prefer that you finance the purchase through them, since they earn a profit from making the loan. All things being equal, they earn less on an all-cash deal.

          If you avoided a 0% loan for the sake of peace of mind, then that may have been good for your psyche but you left money on the table. You could have simply left it in a savings account, and made a bit of interest on it without taking any risk (assuming that you could trust yourself to not spend it on something else.)

          • 0 avatar
            Pch101

            I should amend this comment — if there was the opportunity to get a rebate in lieu of the 0% loan, then it might be wiser to take the rebate instead of the loan. But if you didn’t have to give anything up to take the 0% loan, then it would make better financial sense to borrow the money.

      • 0 avatar
        MK

        Actually it doesn’t depend on the interest rate at all.

        There is an entirely different mindset and outlook you experience when you don’t owe anyone money for your house, your car or your tv.

        It’s an acquired taste I assure you and its worth FAR more than the prevailing interest rate on depreciating consumer “assets”.

        But you keep on doing ‘you’, us idiots will watch and be entertained. :)

  • avatar
    E46M3_333

    “For starters, the speed limit IS your limit. There will be a little warning light that will post on the dashboard for excessive speeds.”

    No need to read further. No deal.
    .
    .

  • avatar
    Russycle

    “What’s killing the enthusiast is the cost of that fun in the form of revenuing schemes by local and state governments, higher taxes and fees,…”

    Maybe. I’ve never paid much in fees or taxes for my vehicles, but YMMV of course. The problem is that the automobile doesn’t scale very well, so as our population grows we can’t build enough roads and highways in urban areas to accommodate the increased number of cars on the road, things get more congested, and driving becomes more of a chore than a pleasure.


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