Who doesn’t remember their first car? Mine was a 1981 Honda Accord in Livorno Beige, though I preferred “French Vanilla”. It was a four-door sedan with rack and pinion power steering and hand crank windows.
My mom bought it from the original owner for $2,000. It had low mileage and a detailed journal of every oil change and gallon of gas, along with the math calculating the fuel efficiency after each fill up. At the time, those numbers weren’t nearly as important to me as those on the dial – for both AM and FM radio stations.
Back to the future, and Jason Gourd, General Manager of Earnhardt Chevrolet of Queen Creek tells me, “There’s no such thing as a $2,000 to $3,000 dollar car anymore.” Far from it. Gourd says one of their most popular models, the Chevy Tahoe, will run you as much as one-hundred thousand! That’s calculating interest on a typical 72-84 month loan, amounting to a $1,200 monthly payment. You also have to factor in gas and insurance.
Another financial hit: maintenance costs rise significantly after the typical 3-year warranty, with the average repair setting you back about $1,700, according to Gourd. “A part the size of a pencil may be 65 bucks, but the labor to put it in could be $3,000.”
As the cost and upkeep of cars climbs, Gourd suggests shifting from buying to leasing, “I believe it’s a great way to control your costs.” He says you get the lowest payment, the best tech and, most importantly, the latest safety features. “I’m leasing all my kids their cars,” he says, “I know they’re going to get in a wreck. A 16-year-old is going to get in a wreck.”
The bottom line is affordability. Conventional interest rates are sitting at 5-5.5%, but leasing uses a “money factor”, which Gourd says is currently running under 4%. He points to the Chevy Equinox at $299 a month. “Our phone bill is more than that,” Gourd laughs, “and a cell phone won’t get us to San Diego.”
And there’s nothing better than cranking the radio on a road trip.
As the cost and upkeep of cars climbs, Gourd suggests shifting from buying to leasing, “I believe it’s a great way to control your costs.”