When Does A Payment Difference Override Your Pick?
On Tuesday I talked about how various factors can influence your monthly vehicle cost and to think about this when you are choosing a vehicle. Often times, however, the vehicle we like the best isn't the least expensive choice. Have you ever thought about how much of a monthly price difference would make you look past your number one pick and go to a different vehicle? Could such differences make you consider some vehicles and cross others off your list? Can there really be that big of a difference in the monthly cost of comparable vehicles?
Gas prices are on everyone's mind and can often be the driving force behind picking one vehicle over another. Might you choose a Toyota V6 RAV4 over a Mazda CX-7 if you knew that the Toyota would cost nearly $50/mo less for gas, or might you consider that same V6 RAV4 over a 4-cyl Honda CR-V if you knew the Toyota would only be about $10/mo more to fill up? You should always try to calculate how many miles you drive and see how much more in gas one vehicle might be than another. The examples I have sighted are real world calculations for someone who drives 12K miles/year.
Finance and lease rates can have a major influence on your monthly vehicle cost. In fact, they can often mitigate huge differences in the selling price of a vehicle. Often times, one vehicle may have incredibly low rates while another may not. I remember when the Acura RDX first came out. Even though a comparably equipped BMW X3 was $10K more expensive, the more favorable lease rates resulted in a monthly payment that was actually lower than the RDX. When my wife and I were shopping for an SUV, my wife really liked the Lexus RX350. However, when comparably equipped, the difference in the lease payment was over $120/mo, in favor of the Murano we eventually leased. The Lexus was certainly nicer, but not $120/mo nicer. So always be sure to check finance and lease rates before you decide on one vehicle over another.
As they say, we all have our price. In the case of the Murano vs RX350, $120/mo was definitely my price. What is yours?
- Posted by
- Lee Scott May 15, 2008, 5:12 AM
- Permalink
- Categories:
- Auto Leasing, Car Buying, Car Loans and Financing, Fuel Economy
I think I'd have chosen the Murano over the RX350 for the $120 savings. I pay attention to gas mileage, but If I'm shopping fairly similar vehicles, I don't worry about a couple MPGs one way or the other. I'm most concerned with financing or leasing numbers, although it seems comparing leasing options often uncovers the biggest monthly payment differences. Because of examples like your X3 vs RDX, I'm comfortable shopping vehicles in a pretty large price band. I'm interested in getting the best value for the type of car I'm getting.
I was deliberating between the Mazda3 and Honda Civic last fall. Besides the Mazda having a lot more features for the money (3i Touring versus Civic LX), I found a big difference in estimated insurance premiums. The Civic would have been about $300 a year more to insure (evidently Civics get stolen a lot), which more than offset its 2 mpg fuel economy advantage (only worth about $100 a year, even at $4 per gallon).
Finance rates, insurance and fuel economy are the three main things that should always be considered when comparing the relative cost of vehicles.
How do I find the insurance costs for each car? Do I just call my insurance company and ask? Are they listed on the internet?
delawaredude - when I do research I get free qutoes form progessive or geico. One of the sites makes it easy to change what car you 'own'.
And while they might not be the cheapest, the difference between one model and another, will gnerally be pretty similar if you choose a different insurer...
As for price... i lay my choices out on a spread sheet. it becomes clear there are cars that get grouped togther based on price.
on one of my lists, the jetta td, mini clubman & s, and mazdaspeed3 come within 50 dollars a month of each other,
Thats taking into account gas/insurance/finiacing.
the A3 and the vibe/matrix are both in different price ranges.
Ahightower, why are Civics popular with thieves? I'm curious: the Civic is not particularly stylish nor fast. It is relaible, but so are the Mazda 3, Corolla and frankly most cars on the market.
When I was shopping to buy my car two years ago (I was buying used......I can't quite afford a new car yet), the Civic also was on my list. But I noticed very early that the Civic was too expensive for what it offered......I ended up with a Protege5, much better choice!
I am assuming that many buyers would make decisions similar to what you and I made.....
civics would be popular because theres a large demand for replacement parts?
Thats my only geuss.
Delawaredude, I just call my current agent and give year/make/model/trim level for the two or three cars I'm considering, and they can spit out a rough estimate in a few minutes over the phone. Then, as opfreak says, I put it all out on a spreadsheet. Car payment, insurance, estimated fuel cost (always be liberal in your estimation of future gas prices - if I was going to run the numbers today, I'd assume gas would be up to $5 a gallon soon...)
I shop my insurance every other year or so, and have stayed with my current carrier for the past six as they have always come out cheapest (employee discount helps, as does multi-line discount since they also carry my homeowners).
For me it doesn’t matter if it is fuel economy in choosing a car; we can help ourselves how to save on fuel. There are six things you can do to be a real fuel saver such as lighten up, go easy on your foot, maintenance is the key, know your ride, it’s all about aerodynamics and now know your fuel. You won’t just do Mother Earth a favor. Your pockets will breathe a huge sigh of relief as well.