Posts filed under “Consumer Spending”

TBP Guide to Car Leasing & Buying

I mentioned yesterday morning that I had a) two cars coming off lease at the same time; b) I’ve been doing lots of shopping at various dealers; c) car financing was pretty attractive. This post expands on that discussion.

Allow me to share what I have learned over the past few weeks. I feared car buying was going to be an ordeal, but I discovered it didn’t have to be. To avoid this fate, you must: Do your homework, understand the negotiation process, and be moderately flexible. 

These are my 10 steps to better auto shopping:

 

1) Set Up Your Online Shopping Identify:

Get a Google Voice account (its free) then get a LeeMail account (its free). These are the only numbers/addresses you use until you decide which car you are getting from which dealer.

Both of these can be easily set to specifically block any emailer or caller — meaning you never hear from them again.

Trust me on this: If you don’t set up both of these up front, you will be harangued by car dealers for the rest of your natural lives (and possibly beyond).

 

2) Do your homework: Before you ever step foot on a dealer’s lot, you need to figure out a few things:

a) What kind of transport? Are you looking for a minivan, convertible, truck, coupe, SUV, etc.
b) The range of competitive vehicles for that car type
c) Your actual budget (including your “bottom line” monthly price)
d) Buy or Lease? (see #3)

Here is an example: One of our cars must be an AWD 4 door, 5 passenger. We made a flexible list that included: Acura RDX/MDX/ZDX, Audi A6/A7, BMW 535x, BMW X5, Infiniti FX35, Infiniti G, Infiniti M37x, Lexus RX350, Mercedes E350, Range Rover Evoque, Volvo XC90, VW Toureg. All had 4 doors, were available in AWD. Prices ranged from mid $30s on the low end to over $70k fully optioned.

 

3) Buy or lease? Most people should own, not lease cars. Its better not to pay for just the most expensive years of a depreciating asset.

The exception is if you can lease with pre-tax dollars — if you own (or are senior enough in) a company, than a lease may be a great deal. But without that tax advantage, the numbers favor owning.

 

4) Know Your Price Range and Approximate Cost of Cars: All of the cars I mentioned have extensive websites where you can build and price vehicles. You end up with MSRP.

With overall rates so cheap, the cost of financing a car for purchase is as low as its ever been. That reduces a key cost of auto shopping.

If you lease, you want to do Sign & Drive. If the car is stolen or totaled, the down payments are also lost — so it pays to roll as much as you can into your monthly fee.

 

5) Understand Factors Which Impact Pricing: The cost of any given car is a function of its retail price (MSRP), specific programs dealers are running, financing, what is hot or not, and other factors.

Seasonal contrarians take note: Convertibles tend to be more negotiable in December/January/February (they are just sitting on lots) the same is true with AWD trucks in June/July/August.

New/Old Models: When models change, there are deals to be had. A brand new model means there are not a lot of used ones to be sold — and many dealers make more from their used cars than they do from their new ones. For example, this month, Lexus’ new RX350 SUV had really good lease deals (2013 RX350 AWD $429mo/27mos. $3,779 due at signing) — because they want some used ones to sell in 2015.

Also look at cars that are being replaced: Acura’s MDX is being upgraded, so is Infiniti’s G37AWD sedan. The deals: 2013 MDX 6 Speed auto $439 per month for 36 months,$2499 total due at signing; Infiniti G37 Sedan AWD with Premium Package: $299/month Lease for 24 months, $2,699 initial payment. Their sale prices were also significantly discounted.

The hot sellers — Audi A7 — is pretty much full boat. And the leases were even worse. (Pass).

Then there are the klunkers: The overpriced, slow-selling BMW 5 series Gran Turismo is rumored to be cancelled soon; if that happens, they will go on mad sale. A similar BMW 3 series GT  — the shape works much better on the smaller car — arrives this summer. Watch for deals then.
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Category: Consumer Spending, Credit

Bernanke Goes Car Shopping

Have you been shopping for an automobile recently? If you want to understand the impact the Federal Reserve is having on the real economy, I suggest you do a little online homework and then go hit the auto dealers. You will be astonished at what you find. Whether you are buying a car or leasing…Read More

Category: Consumer Spending, Credit, Economy, Federal Reserve, Fixed Income/Interest Rates

Books Bought By Big Picture Readers (January 2013)

Click to enlarge:

 

 

Once again, its time to peruse the data to see which books TBP readers bought last month. Amazon’s embed code lets me track every click from these links — how many people look at the page, how many books get seen, and/or collectively purchased.

Its anonymous — I don’t know who bought what — but there’s lots of data on the various books generated.

These were the most popular TBP books for January:

Wait: The Art and Science of Delay (Frank Partnoy)

The Information: A History, A Theory, A Flood (James Gleick)

Bailout Nation, with New Post-Crisis Update: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy (Barry Ritholtz)

How We Know What Isn’t So: The Fallibility of Human Reason in Everyday Life (Thomas Gilovich)

Thinking, Fast and Slow (Daniel Kahneman)

Capitalism and Freedom: Fortieth Anniversary Edition (Milton Friedman)

The Art of Contrary Thinking (Humphrey B. Neill)

The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street (Justin Fox)

Underwater Dogs (Seth Casteel)

Kindle and eBooks after the jump

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Category: Books, Consumer Spending

Why is Buying a Car in the USA Such an Ordeal?

The other night, I found myself in a high-rent, commercial neighborhood in suburbia, where most of the buildings were medical offices and car dealers and luxury retailers. Since Mrs. TBP was at the movies with her girlfriend, I decided to pop into a few places to see a what cars on my short list might…Read More

Category: Consumer Spending

Books Bought By Big Picture Readers (December 2012)

Click to enlarge:

Once again, its time to peruse the data to see which books TBP readers bought last month. Amazon’s embed code lets me track every click from these links — how many people look at the page, how many books get seen, and/or collectively purchased.

Its anonymous — I don’t know who bought what — but there’s lots of data on the various books generated.

These were the most popular TBP books for December:

Exploring Wine: Completely Revised 3rd Ed (Steven Kolpan & Brian H. Smith)

Underwater Dogs (Seth Casteel)

Antifragile: Things That Gain from Disorder (Nassim Nicholas Taleb)

The Information: A History, A Theory, A Flood (James Gleick)

How Music Works (David Byrne)

Paul Wilmott Introduces Quantitative Finance (Paul Wilmott)

Hugh Johnson’s Wine Companion: The Encyclopedia of Wines, Vineyards and Winemakers (Hugh Johnson)

Thinking, Fast and Slow (Daniel Kahneman)

Let’s Pray (Not Just Say) the Rosary: Classic Edition; Luminous Mysteries Added (Richard Rooney S.J.)

Wait: The Art and Science of Delay (Frank Partnoy)

Bailout Nation, with New Post-Crisis Update: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy (Barry Ritholtz)

The Rolling Stones 50 (The Rolling Stones)

Kindle and eBooks after the jump

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Category: Books, Consumer Spending

The Tiresome Holiday Sales Forecast Pattern

• Reuters – U.S. retailers scramble after lackluster holiday sales The 2012 holiday season may have been the worst for retailers since the 2008 financial crisis, with sales growth far below expectations, forcing many to offer massive post-Christmas discounts in hopes of shedding excess inventory. While chains like Wal-Mart Stores Inc and Gap Inc are…Read More

Category: Consumer Spending, Really, really bad calls, Retail, Think Tank

2012 Holiday Retail Sales Disappoint

We are still weeks away until we get all of the hard data about the holiday retail sales season, but the early numbers are trickling in. It appears that it was not a very merry Shopmas. We certainly did not see the 13% the National Retail Federation claimed was occurring this season. Some of the…Read More

Category: Consumer Spending, Really, really bad calls, Retail

The Secret to Last Minute Gift Shopping

Okay, its the 23rd day of December, and you still have some people left to shop for. (Its probably too late for the stuff on our prior gift guides TBP Holiday Shopping Ideas;  More Shopmas;  Even More Shopping Ideas; and the snarky Gift Giving Guide for  Traders) Not to worry, we have you covered. The…Read More

Category: Consumer Spending

Holiday Gift Ideas

So far this year, I’ve thrown out a few Shopmas gift guides. If you missed any of them, just click below: • TBP Holiday Shopping Ideas! (an assortment of various baubles, books and gifts from $20-$3200) • More Shopmas Gift Ideas! (more of the same) • Even More Holiday Shopping Ideas (emphasis on $50-$500 price…Read More

Category: Consumer Spending

Gift Giving Guide for the Traders in Your Life

Gather round for the Trader version of our Shopmas suggestions. These aren’t the usual Bull & Bear cliches you typically see — its all good stuff for the trader in your life. (You can see out earlier suggestions:  part one, part two and part three) This round of Shopmas ideas is for the guy who…Read More

Category: Consumer Spending, Trading