Being Smart with your Buyback money and purchase of next vehicle

[Basenji]

I got a 2016 CPO Lincoln MKZ Hybrid Black Label with 30,000 miles. I'm getting $30,200 for my CPO 2013 Audi A3 TDI (plus the $1000 we all got), I paid $34K for it. The sticker on the Audi was about $40K. The Lincoln gets better fuel economy than I got in the A3 by a few miles per gallon. The sticker on the Lincoln was $52K. I paid $28.5K for the Lincoln. I'm a big fan of buying used and in our situation, I think it makes sense.

 

[Fordracing19]

Still trying to satisfy the wife's long time desire for an E Class Merc. Visited a dealer in NJ today who has 2 '15 E-250 BlueTecs on the lot with only 14 miles on them. Full warranty. Very tempting.

I'm digging mine. I have put 8k miles on it since July.

 

[Fordracing19]

Be aware of the $50 charge per visit on the BMW CPO. That and the no suspension, radio, windows, locks ect. That is why I went MB CPO

 

[71sbeetle]

I was upside down on my golf tdi (thanks Routan....) and with what I'm getting the replacement will have slightly lower payments and will be paid off earlier than the tdi would have been, good enough for me not to buy someone else's car

 

[pknopp]

He's raising an issue, not telling you what to do, "pknopp." Chill.

It's an issue that is none of his business. The vast majority of people here are here not because they are stupid with their money.

If I want to buy a new car it's because it's what we want and can afford it.

I can't take it with me.

 

[bubbagumpshrimp]

It's an issue that is none of his business. The vast majority of people here are here not because they are stupid with their money.
If I want to buy a new car it's because it's what we want and can afford it.
I can't take it with me.

Multiple people have posted up that the only reason they'll be able to take the buyback (without having to kick in some money on their end) is that VW is paying additional towards the loans of people whose loans are upside down.

Think about that one. VW is paying a generous amount for these cars...and it's still not enough to get some people out of their cars and put a few bucks in their pocket.

While his post might not be relevant to you...it is relevant to some here.

 

[DanB36]

It's an issue that is none of his business. The vast majority of people here are here not because they are stupid with their money.

It's as much his business as 95% of the other "advice" threads here. And we have people here who are far enough upside down that they need the "loan forgiveness". People who rolled over $3k in remaining lease payments into a loan for a new (to them) car, to give one specific example. I don't know how you'd define "stupid with their money", but I think that would qualify.

@GyroRon is saying, in effect, "give serious thought to whether a late-model used vehicle would serve your needs, rather than assuming you must buy new." Why is it objectionable for him to proactively give (good) general advice like this?

 

[DanB36]

For folks that want to use their money for a used car....well in my opinion, it is way too damn risky taking chances of what has been done to a used car with one or two previous owners.

Why do you feel that's significantly more risky than taking chances of what was done to the (new) car at the factory? Or on a test drive?

The risk that you're talking about, to be clear, is the risk that the previous owner could have mistreated the car (a late-model, low-mileage car) in such a way as would cause long-term, significant issues, but would not be noticeable on a reasonable pre-purchase inspection/evaluation. I can't assign an objective number to that risk (and neither, I'd bet, can you), but subjectively, I'd think it has to be pretty low. And, depending on what you buy, you can still have a warranty. Weigh that risk against saving 30-40% on the car.

 

[GyroRon]

Anyone is free to do whatever they want. Absolutely. Take your buyback money and burn it in the firepit if you want.

I am just trying to be a voice of reason for people to at least consider.

I myself can afford to buy pretty much any car I want, brand new. Maybe not a 150 grand new GTR or Porsche.... But certainly a new BMW or Mercedes or Mazda or Subaru etc.... I just choose not to.

In my past I would never consider a used car, for the same reasons most people give out... I don't know its history, the past driver could have abused it or not serviced it in a timely manner. I also didn't think you could save enough money buying used to make it worthwhile, because often times a used one or two year old car at a dealer isn't priced much less or any less than a lower trim level yet brand new version of the same vehicle on the dealers lot. I also used the excuse I would keep the car forever and would rather start off with zero miles. I also wanted as much warranty as I could get. And lastly I just simply wanted that new car smell.

Reality was, I was trading out of the vehicle every few years because I wanted something different. I was in a constant state of payments and either having to keep the car or truck a few years just to get to the point of paying the loan down to the point where I didn't owe more than it was worth, or having to roll negative equity into the next vehicles loan.

And not only did I have car payments ( one for me, one for my wife ), I also had mortgage, payments on the boat, the airplane, the motorcycle, the jet ski, a few credit cards etc.... It was crazy how much I was spending every month in payments, and then even crazier how much I was spending just in interest fees for everything. Last new vehicle I bought was my truck in 2008. Ever since then I have changed how I spend my money and over the years I have managed to pay off everything. I now have a truck and 3 nice cars, 5 motorcycles, 2 airplanes, 2 jet skis, and everything else in my possession and I own it all free and clear. I am about to pay off my mortgage within the next year and I will be completely debt and interest free. Im sure some will say whatever, good for you.... But to know I don't have much education and don't have a big high paying corporate job, to know me well you'd be impressed with how I have gotten to where I am right now. Making choices like I have with my buyback money is how I have gotten to where I am today... Taking the 22 grand I will get back and only using around 14 grand of it on a replacement... A replacement that is newer, less miles, larger, more comfortable, looks better, has more features, and is likely to be far more reliable and less expensive to service and maintain. Ill pocket 8 grand in change. Money that can be put into savings and be there when I decide I want something else, or need something else.

Heck when all this buyback mess came out in June I went out and bought another Jetta TDI, cash money, just for the purpose of turning a profit on. I Bought a 2012 for 11,200$ that the charts showed 21 grand on. I was able to do that cause I had money in the bank....

I am not bragging and I am not saying everyone should run out and buy a used camry to replace their TDI. I am only saying, in alot of peoples cases, it WOULD make sense to at least strongly consider used. The majority of people doing the buyback will walk away from their TDI with no vehicle loan debt, no negative equity, and cash in hand. Some of us with paid off cars will walk away with alot of cash, others less but ultimately the majority of us will all be in a good position to replace our cars and have no debt associated with the replacement or possibly replace our cars and have no debt and even have some change left over to put in savings or pay off a credit card or a student loan or put towards the mortgage or whatever...

Again, PKNOPP is right, its none of my business what anyone besides myself does with their buyback money. That doesn't take away from the fact that I make a good point worth consideration. YMMV

 

[Drmaseofbase]

Still unsure what to get with my buy back. I'm thinking of getting something like a 2014 a4 or 2014 c class.
I have a 2012 tdi Passat which I love.
Also thought about getting a new Passat, but it seems like those in the know on this forum advise against that

 

[nattyboh2027]

If folks have their tdi paid off, then we a few options to think what to choose for a replacement vehicle. This comes with day in and day out homework to make a solid choice. Folks with a loan or lease, I guess its a different ball game with decision making for a replacement vehicle. For whatever replacement brand you choose, I would go with Subaru, Honda, Toyota, or Nissan. #TeamSubaru all day though haha

 

[TDIinMA]

Anyone is free to do whatever they want. Absolutely. Take your buyback money and burn it in the firepit if you want.

I am just trying to be a voice of reason for people to at least consider.

I myself can afford to buy pretty much any car I want, brand new. Maybe not a 150 grand new GTR or Porsche.... But certainly a new BMW or Mercedes or Mazda or Subaru etc.... I just choose not to.

In my past I would never consider a used car, for the same reasons most people give out... I don't know its history, the past driver could have abused it or not serviced it in a timely manner. I also didn't think you could save enough money buying used to make it worthwhile, because often times a used one or two year old car at a dealer isn't priced much less or any less than a lower trim level yet brand new version of the same vehicle on the dealers lot. I also used the excuse I would keep the car forever and would rather start off with zero miles. I also wanted as much warranty as I could get. And lastly I just simply wanted that new car smell.

Reality was, I was trading out of the vehicle every few years because I wanted something different. I was in a constant state of payments and either having to keep the car or truck a few years just to get to the point of paying the loan down to the point where I didn't owe more than it was worth, or having to roll negative equity into the next vehicles loan.

And not only did I have car payments ( one for me, one for my wife ), I also had mortgage, payments on the boat, the airplane, the motorcycle, the jet ski, a few credit cards etc.... It was crazy how much I was spending every month in payments, and then even crazier how much I was spending just in interest fees for everything. Last new vehicle I bought was my truck in 2008. Ever since then I have changed how I spend my money and over the years I have managed to pay off everything. I now have a truck and 3 nice cars, 5 motorcycles, 2 airplanes, 2 jet skis, and everything else in my possession and I own it all free and clear. I am about to pay off my mortgage within the next year and I will be completely debt and interest free. Im sure some will say whatever, good for you.... But to know I don't have much education and don't have a big high paying corporate job, to know me well you'd be impressed with how I have gotten to where I am right now. Making choices like I have with my buyback money is how I have gotten to where I am today... Taking the 22 grand I will get back and only using around 14 grand of it on a replacement... A replacement that is newer, less miles, larger, more comfortable, looks better, has more features, and is likely to be far more reliable and less expensive to service and maintain. Ill pocket 8 grand in change. Money that can be put into savings and be there when I decide I want something else, or need something else.

Heck when all this buyback mess came out in June I went out and bought another Jetta TDI, cash money, just for the purpose of turning a profit on. I Bought a 2012 for 11,200$ that the charts showed 21 grand on. I was able to do that cause I had money in the bank....

I am not bragging and I am not saying everyone should run out and buy a used camry to replace their TDI. I am only saying, in alot of peoples cases, it WOULD make sense to at least strongly consider used. The majority of people doing the buyback will walk away from their TDI with no vehicle loan debt, no negative equity, and cash in hand. Some of us with paid off cars will walk away with alot of cash, others less but ultimately the majority of us will all be in a good position to replace our cars and have no debt associated with the replacement or possibly replace our cars and have no debt and even have some change left over to put in savings or pay off a credit card or a student loan or put towards the mortgage or whatever...

Again, PKNOPP is right, its none of my business what anyone besides myself does with their buyback money. That doesn't take away from the fact that I make a good point worth consideration. YMMV

I appreciate the candid comments. What I like is that you are not just acting as the voice of reason nor judging people for poor economic choices. You are simply sharing your testimony of how you overcame poor choices. This is good advice.

Everyone has to make their own choices, but I would advise to be comfortable with it in your conscience. Many of us, including yours truly, have bitten off more than we can chew and lived "car poor" in the past. This can be for anything, like houses and boats, etc., but one want to be happy and at peace with one's decision. The dealers and loan officers want you to max out your spending potential, but you don't have to; or they wish to up-sell to more car than you need, based on "what you can afford" monthly with longer financing terms and lower interest rates. This can be very appealing but also often foolhardy. Sounds obvious, but bears repeating. All things are permissible, but not all are beneficial.

 

[2whluge]

Interesting thread. I don't often have much to add to the discussion, but here goes. Our 2011 JSW has 117,000 miles on it, and we'll get back about $17 K. I thought this might be the time to spring for the Volvo I thought I always wanted, but I would have to double the buyback $$ to get a V60. We've driven several other alternatives, nothing sparked our interest.

Before the Jetta, I drove Saabs. Loved them. Always head turners. Fund to drive. I always bought them used from a local dealer who treated me right and maintained them perfectly. So, just for grins, I stopped to visit him. I was thinking about a 9-5 wagon he had, which, at 105K miles, could be had for about half of the buy back money. Then he caught me oogling his wife's 9-4x SUV. He told me he had a line on a 2011 with front drive, all the bells and whistles, 75K miles, for less than the buyback $$. So, heart overcame good sense and I bought it. New tires, perfect leather, every conceivable option. And money left over. My wife will drive this one (she doesn't put too many miles on) and I will drive her 2012 Focus on my 120 mile per day commute. If VW does something unexpected like give us some crazy loyalty deal, I might move the Focus, but really, why should I?

 

[bloc]

Just wanted to ask you: what's wrong with a new TSI engine?

Personally, I can't shake the feeling that this newer crop of turbocharged-within-an-inch-of-their-lives gasoline engines (TSi, ecoboost, etc) just won't last that long. Yes, direct injection and newer head gasket technologies help a LOT, but the thermal stresses on such small engines making that much power make me nervous.

So I went BMW X5, AWD, straight six turbodiesel.

I seriously considered those, but to get an equivalent to VCDS for BMW you are out a LOT more money, and can't do nearly as much. BMW modules are so integrated that you can't even change a window regulator without coding it to the chassis, and the software & procedures needed to do that are apparently quite complicated. With my tendency to keep a vehicle til 300k miles (warranty is less of a compelling factor in that scenario) and preference to do all the work myself.. I'm sticking with VW diesel SUV.

Replacing the 13 Passat with a 12 TDI Touareg. Passat was paid for and the $ from that pays more than 2/3rd the bill on the Touareg, which has half the miles and twice the content.

I started doing homework and while it's only a 15hp difference between 12 and 13 3.0tdi touareg stock, when tuned there's a big difference. 528lb-ft vs 427. This was enough to get me to narrow in on 13-14s. But, the later engines have a smaller oil sump, so I'll be doing UOAs regularly at first.

Also, I was all set on a sport+nav (I like the lack of real leather and sunroof), then made the mistake of test driving an exec with the dynaudio sound. Must have.

 

[IndigoBlueWagon]

That's a rare car. I had to look it up. But it seems unlikely that it's front drive, as it's based on the Cadillac SRX platform and that's a rear or AWD platform. Only reservations I'd have are parts availability, service expertise, and resale.

 

[atomicfront]

I already have a used car which is in great condition. I don't understand the logic of trading the great used car in and getting a lesser used vehicle which I don't know how well it was maintained and how it was driven.

If you car is in decent shape the best decision is to drive it two years and then take the buyback. Whether you buy a used car or a new one at that point would be up to you.

 

[atomicfront]

Multiple people have posted up that the only reason they'll be able to take the buyback (without having to kick in some money on their end) is that VW is paying additional towards the loans of people whose loans are upside down.

Think about that one. VW is paying a generous amount for these cars...and it's still not enough to get some people out of their cars and put a few bucks in their pocket.

While his post might not be relevant to you...it is relevant to some here.

My first car was used and I had so many issues with it that I have never bought used again. I think it is cheaper in the long run to get the new car. 2 year old cars aren't cheap enough to me make it worth it. And the car loan on a new car with the 17k+ that my check as down payment the loan going to be is going to be so low anyway. I pay 1600 a month in daycare. A 200 a month loan is not a big percentage of my expenses.

 

[IndigoBlueWagon]

I already have a used car which is in great condition. I don't understand the logic of trading the great used car in and getting a lesser used vehicle which I don't know how well it was maintained and how it was driven.

This. And when two years are up the buyback may not have the appeal it does to people right now. Say what you will about modern gasoline turbocharged engines, TDIs are a different driving experience. You may not want to give it up.

Regarding car debt, I've had good luck leasing cars and buying them out at the end of the lease term. I don't tie up a large sum of money in a cash purchase, often the "money rate" on leases is lower than it is for loans, and you get to buy the perfect used car, because you drove and cared for it since new.

Sure, I'd rather not have a payment, but when it's a choice that allows you to hang on to savings instead of spending it on a car it's a little easier to swallow.

 

[Airpizz6]

I already have a used car which is in great condition. I don't understand the logic of trading the great used car in and getting a lesser used vehicle which I don't know how well it was maintained and how it was driven.

Understand what you're saying, but while my Passat is in great condition, the car itself is not great. Too cheap in too many ways, and doesn't compare to the Passat diesel wagon I rented in Germany several years ago. Of course, I might still keep it for a while, and definitely won't get a 'lesser' car when I part with it.

 

[2whluge]

Yup, it is pretty rare. The mechanicals are all Cadillac/GM, the hardware is going to be more difficult. In this generation of 9-4/SRX, the options were FWD/AWD. Even though I work in MN, AWD isn't needed in my view.

But, it is so cool, I decided to roll the dice. If you park your car and don't look back to admire it, you are driving the wrong vehicle.

 

[Tfuce]

I recently bought a 2014 CPO BMW to replace the TDI. I recognize that you are paying a premium for a CPO but I thought it was well worth it because of the warranty, plus I got a good deal on the car. 28,000 miles on the vehicle, with an additional 1 year or 22,000 remaining on the factory warranty. BMW also gave me an extra 25,000 miles in maintenance (up to 75,000 which includes wear items such as brakes and wipers), and a CPO warranty of up to 2 additional years from expiration of factory warranty or 100,000 total. Granted, the CPO warranty is not bumper to bumper but it is quite good. Essentially, I am getting a warranty of up to 3 years or 72,000 for the important components on my vehicle.

The price was excellent, the warranty very good, plus BMW offered .9 financing and they gave me an extra $1000 (Conquest program) for owning a Honda.

Pretty tough to beat those factors and I love the car. It's my third bimmer, the first one I bought new in 2001 and drove it year round for 15 years. You can save a bit by buying in a private sale or from a used car dealer and avoiding CPO, but I think it's a gamble. You don't know where that car has been or who was driving it. I bought a gorgeous 3 year old Mazda 3 for one of my boys and very quickly discovered that the clutch was trashed. My mechanic showed me the damage and he said he hadn't seen one that had been trashed that badly. He said it had to have been raced.

 

[prostart]

I already have a used car which is in great condition. I don't understand the logic of trading the great used car in and getting a lesser used vehicle which I don't know how well it was maintained and how it was driven.

If you car is in decent shape the best decision is to drive it two years and then take the buyback. Whether you buy a used car or a new one at that point would be up to you.

This is a great idea that ive thought about as well. Im not gonna be in any hurry to give my 13' JSW back, its got just under 25k miles, so I can essentially drive it for free for the next few years with no maintenance. The offset is the insurance, really need to keep full coverage on it, so that's not cheap. I have 3 other cars to drive, the new to me 05' Suburu, my Truck and my Ecoboost Mustang. Being that im putting the JSW money directly toward my home mortgage, gotta think about that interest as well. Sometimes it drives me crazy to have to many options.

 

[ccbsecu]

Agree - the calculated buy back amount bought me one owner 335d with a complete service history including carbon cleaning and walnut blasting at the dealer just prior to my purchase.

...AND, the buy back funds also covered the stage III tune plus the other fixes...

 

[stasek]

My '12 Jetta has already survived my oldest daughter's 2 years worth of driving. Now that she's off to college, another 16 yo got her license. This time, I'm not taking any chances, so I've decided to get her something in the $7-10k range, most likely an 8-10 year old Lexus/Infiniti/Acura with 100-120k miles. With some luck, the car should last another 100k miles.

 

[daesania]

I was ready for a new car when the scandal hit anyway, so I just waited it out. We will pay off the loan of the car and still have 8k in hand to pay off credit cards. I've already signed the lease of a new car. Gonna stick with leasing instead of buying anymore.

 

[vintovka]

I was ready for a new car when the scandal hit anyway, so I just waited it out. We will pay off the loan of the car and still have 8k in hand to pay off credit cards. I've already signed the lease of a new car. Gonna stick with leasing instead of buying anymore.

8k in credit cards? The interest alone seems tremendous. We have been blessed as the Last CC interest we paid was $1.74 some 30 years ago. I estimate the CC companies have paid US tens of thousands since in cash back ect. Keeping a positive balance is like a worry free checkbook with all the security, extended warranties, protections and discounts ect all on the back of the CC companies. This is heresy right?

Your leasing plans, however, are appealing but do the long term cost effective calcs first. The first cost plus maintenance are big factors especially with labor and parts going out of sight. We always buy the premium extended warranties and they have paid off so far. Even on the current POS VW,

 

[03fan]

Also look at putting the $20k buyback money towards your mortgage as a lump payment to save a ton of money. Use some total loan calculators to see what works best for you.

I could have paid my new GTI off without a loan with my buyback money, but it's about $7,000 cheaper in the long run to put the money towards the house and have a low interest car loan. If you have 30 year mortgage or a $200K+ house you will save even more than my $7k.

 

[DSL HED]

Good post, OP. I'm still not 100% sure what I'll be doing, but I've been thinking for a while about turning it in late 2018 (probably starting the process in August 2018) and then taking the money and buying a used C-Max. VW will pay me about $22000 at turn in and I'll probably have about $5000 left over if I do get a year old C-Max. Then I'll have no car payment, and a newer car that should last me until 2027.

New would be nice, but I don't see the point when there are so many gently used vehicles on the market.

 

[IndigoBlueWagon]

We always buy the premium extended warranties and they have paid off so far. Even on the current POS VW,

So you may be saving money on credit card interest but I'm sure you realize that extended warranties are one of the industry's biggest profit centers. People like the peace of mind an extended warranty provides, but it's not free.

 

[aja8888]

So you may be saving money on credit card interest but I'm sure you realize that extended warranties are one of the industry's biggest profit centers. People like the peace of mind an extended warranty provides, but it's not free.

Plus, why pre-pay for repairs you may never need?