To Trade or Not to Trade


#1

So I have gone back to graduate school and I currently lease a 2008 VW Jetta that I have two more years in my lease (plus whatever residiual I may owe at the end). Since money is tight, I was thinking of turning in the car and purchasing like a used Volvo wagon or S70 sedan (1999 or similar year model) so I could save the monthly lease payment. Does that make sense, or should I just buck up and keep leasing the car and purchase it when the lease is up? the VW currently have 48K miles on it,


#2

Check your lease. It may be expensive to turn the Jetta in.


#3

None of your choices are going to be very economical. VWs and Volvos are more expensive to drive than Japanese or American.


#4

The used Volvo will eat up your budget in expensive repairs, forget the Volvo idea. Another car might make sense, but you have to check your lease contract. The penalties and fees for turning the car in early are very high. Some folks turn over the lease to someone else, but you need to research how this works legally.

Your best option could be to run the lease to term and then let the car go and buy something less expensive then. Unfortunately leasing is the least flexible option when you get a new car. 2 more years and you have 48K miles, you may want to be sure you aren’t going to exceed your allowed miles on the lease. The penalty for extra miles is steep.


#5

If I were you, I would keep the Jetta.
While it will have a higher repair incidence as it ages than a Japanese, Korean, or US-brand car would, it will still be far more reliable than an older Volvo.

Volvos are fine during the warranty period, but once the warranties are over, the higher-than-average need for repairs, coupled with the higher-than-average cost for parts, make them expensive to own. Going from a 2-3 year old VW to an 11-12 year old Volvo would be a very good illustration of going from the frying pan into the fire.

For some reason that I can’t fathom, Volvos seem to have a reputation for reliability. Trust me–as a one-time Volvo owner, that reputation is not based on reality.

And, if someone wants a Volvo for its supposed safety advantage, that advantage disappeared quite a few years ago. At this point, Volvos are no more safe than the majority of other new cars on the road, and they lag most brands in terms of reliability.


#6

You are either a glutton for punishment or money is not as tight as you say. Used Volvos are the definition of a money pit. Repairs are frequent and expensive.

Most likely the best course of action would be to keep the VW until the lease is up, then get something else. The VW is a similar money pit once the warranty runs out. I think you would regret buying it after the lease term.


#7

How do you have a 3 year old car on lease and still have two YEARS left on it?
Try one of those lease swapping things online and see what it’ll get ya.


#8

My take is do not go from bad to worse. I think you are better off in the lease at this point, considering your alternative. 2 years from now reconsider your options.


#9

Continue the lease for now and see how things go in grad school. Do you start in January or a semester later? If it’s next school year, then you have time to shop lease swapping. Also, isn’t 48,000 miles high for 3 years? What is the limit after your 5 year lease is over? Maybe you can make it up by sitting it in the parking lot at school.


#10

Are you going to be living on or near campus or will you be commmuting to campus? If you will be living on or near campus, this may be the time to try to negotiate out of the lease and purchase a low maintenace used car. If you will be commuting, it might make sense to hang on to the Jetta.

When I was on my way to graduate school, I was looking for a car. My dad did business with a DeSoto/Plymouth dealer and was having his car serviced. While my Dad was talking to the owner, I was drooling over a Porsche in the lot. The owner came up to me and said, “That is the last car you want. The maintenance will eat you out of house and home. Stick with the Fords, Chevrolets and Plymouths. These are the easiest to get parts for and maintain”. This was almost 50 years ago. Today, go for the common, easily maintained car such as a Toyota or a Honda.


#11

I know it is a little late, but I hope a few people can learn that leasing a car as an individual, is almost always the most expensive way of financing a car.


#12

Absolutely!
The best way to own a car is to pay cash for it.

Financing is bad, but leasing is worse.
If you need to finance it or to lease it, that indicates that your current taste in cars exceeds your budget by too large a margin.

Begin with a cheap car for which you can pay cash. Then save/invest your money and the next time you are in the market for a car, you can probably buy a better/more expensive car for cash–and so on, and so on.

I bought my first car–a brand-new '71 Dodge Charger–for cash, and that is the same way that I have bought every subsequent car. Trust me–in the long run you will be thousands of dollars ahead of the game if you avoid financing or leasing.


#13

Thanks, everyone this all was very helpful!!


#14

I concur that cash is best way to pay for a vehicle.

However I recently switched up vehicles(7 passenger) and took a 5yr loan @ 2.5% on a used vehicle for $6k loan and got a really nice vehicle after selling my recent one. I have the cash sitting available for another vehicle but rather leave a buffer for these interesting times we are having.