So that is the question.
Sure, there are benefits for going the novated lease option compared to buying it outright from the dealership.
But I’m more interested in what’s the most frugal option to get a decent vehicle.
Spending 30-40k on a used 3-5 y/o European car, or go the lease option and get something near new?
I feel like going for an out of warranty euro car is asking for trouble
@pao2x
What are common things that make it a trouble?
used is always more frugal, even a major breakdown is better than deprecation
OP wants to be frugal.
OP also wants to spend $30k-$40k on a used Euro.
What such used Euro cars are in this range?
Audi ?
Yes I want to buy a German car, but I want to be responsible about it too.
My last car was a German I bought used at around 5 years old when I got it, didn’t have any major troubles, servicing and parts I do my research and get them cheaper.
Example, busted water pump, Audi cost $1600 fitted, my solution? 600 fitted. Same part, and was able to service some other items while the job was being done and still keep it well below the dealership price.
I kept the car for 3 years and estimate I lost around 20k in depreciation/servicing/insurance etc (everything but fuel)
The lease is supposed to cover all maintenance, but if you do random jobs yourself that probably won't be covered
not all leases do, which I'm finding can complicate comparisons 🧐
How old was that car and how many km when the water pump went?
My guess is about the 70k km mark.
I'd prefer a car where the water pump isn't made of plastic and lasted longer….. making the cost of the pump replacement zero…
yep just on 60k, that's when they're rated to go bust. Its a veery common fault (and part) on VW engines, because of this thankfully easy to source.
Example, busted water pump, Audi cost $1600 fitted, my solution? 600 fitted.
Commodore water pump $58
But the Audi one does have impeller made of unicorn tears.
sure, is this an aftermarket price? how much for labour? There are plenty of other negatives to commodores too.
@Soldier: Are you suggesting that aftermarket are poorer quality than OEM? So worse than 60k km? (in your car example)
I don't believe that VAG actually make water pumps. If they did, they should hang their heads in shame. A grade 12 wood working student could make a water pump that lasts longer than the OEM pump ! Come on. See the light. Stop trying to defend the shit quality of the pump.
@oscargamer: no, not suggesting for a second that the plastic water pump is the best thing out, but aftermarket water pumps are also available for VAG
if you had bought a Japanese car, the water pump replacement cost is $0.00. This is because their parts does not fail within a 5 year period.
Lol
New is better. Each scratch, each smell in the car, each engine problem that comes up will be because if you. And that's a good thing.
Better option: Spend the money on a 3-5yo Japanese, or possibly Korean vehicle.
Euro value is all in the badge. It isn’t worth the extra $
Like others have said - a euro car outside of warranty can be a horrible financial decision. You may get lucky and have no issues, but if you do - it will cost a bundle to fix.
A used Lexus is a much better proposition if you're after a luxury brand.
Regarding novated vs cash/normal finance - it depends on your tax rate & car usage. Novating isn't as beneficial as it used to be, but it can have some tax advantages for some. Just note that many novated lease providers will not negotiate on interest rates, so they will charge you 4-5% higher than what you'll get through a finance broker.
@malich
what usually goes wrong to make a euro car horrible financial decision when bought out of warranty?
The example of a water pump at 60-70000km above is one. Once the car is 5yo there is more chance of something going wrong. The difference with Euro cars (when in Aus) is that parts and servicing are typically much more expensive than comparable japanese or Korean parts.
If you want a "luxury" ish car, is Lexus not an option? honestly after having relatives own a top range Audi (Audi A7), BMW X5 (nearly top), and a Mere GLE63 - they all prefer the "luxury" of the Lexus but the added reliability. Only negative is the Lexus has weak "tech" but 2021 refreshes have fixed most of it. Lot of car, and 99% the reliability of Toyota.
… the Lexus but the added reliability … and 99% the reliability of Toyota.
I though Lexus have 200% the reliability of Toyota, given the price difference.
I love Lexus, though their new car prices are the same if not very close as audi.
Difference here is the Lexus is worth it… The Audi is not.
Surprise they dont cost more than the European cars.
The finish is top notch.
Isn't quattro nice? Ain't the head / tail / turning lights gorgeous? Totally worth it.
New Car on a Lease or Used Car Outright
Buy through the leasing company, they have better buying power…
Some will do it for a small fee.
That's a bit of a myth. I spent over 10 years working in car dealers. Private buyers can negotiate deals that are just as good as fleet companies.
Private buyers can negotiate deals that are just as good as fleet companies.
Only if you don't value your time…
I've seen some fleet companies charging more than retail customers. They will negotiate a 'best price' for the customer, then add $2k ontop as a finders fee and invoice the dealer.
In any case, buying through fleet isn't always cheaper.
They will negotiate a 'best price' for the customer, then add $2k ontop as a finders fee and invoice the dealer.
Some charge $500 for the service. Ask upfront if they do it and what their fee is.
In any case, buying through fleet isn't always cheaper.
I didn't say it was always cheaper… For some cars, it can be a lot cheaper though…
@jv: It's an unregulated industry, unfortunately for the consumer. If the fleet company is getting a kickback from the dealer, they don't need to declare it.
So one still needs to shop around.
Or save time and go directly to a fleet buyer that offers direct sales.
How can you mention "most frugal" and "European" in the same sentence?
You do know you can lease a used car?
yes im aware, but figured if you're leasing might as well get something better?
Only if you’ve got more coins to throw away!
Part of the reason I started looking to leasing is because the used car market is quite overpriced right now
Yes it is inflated. Lots of disposable cash in the economy at the moment.
If you wanted to avoid that, you could look to import a car from Japan. It's a bit of a left field approach, but then your subject to global markets rather than Aussie ones alone.
Between those 2 options, get the new car