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Tales from a small town

Short stories about life in a small town. Non-fiction. Great reading.

Friday, April 21, 2006

Just a little update...

For those of you who're familar with my previous post, the woman who was supposed to buy the Buick? She called me today and said her son got called away to some emergency meeting at work and couldn't be reached, and then him and his wife are going away for the weekend, but she'll be in touch with him sometime late Saturday or anytime on Sunday, and she'll have an answer for me Monday morning at the latest.

That's just the nature of the beast I guess. She did tell me she was interested on information on a "one-pay lease." I'm not allowed to tell her this, but I think if she goes for that, she's screwing herself. The way the deal was originally written as a purchase, with her trade-in and rebates, she could drive off with a brand-new LaCross CXL for $19,000. She's got the money in cash, because her husband just died over the winter and she's the recipient of his fat life insurance policy.

With the one-pay lease option, she can drive off with the same car for under $10,000; but, that's assuming she gives us her trade-in which is a fully-loaded '01 Oldmobile Silhouette in pristine condition - which also has a clear title. This one-pay lease is 3 years, 15,000 miles per year, which means she can put 45,000 miles on it. Aside from the fact this lease is less than half the purchase, if she were to die before the lease expires, she can designate a beneficiary who could drive it until the lease is up - and that beneficiary would just turn the car in, thus avoiding probate court altogether. (If she out-right owns the car, the car would be tied up in probate court upon her death, even if she does have a designated beneficiary; this was an important fact to her, as she's 75 years old, with Krohn's disease.)

After reading all of that, you might be thinking, "Down-side? What down-side?" The downside is this: She can outright own the car for $19,000 + trade for as long as she lives. We're giving her $6,500 for her trade, so if she puts in an additional $9,900 in cash, she's giving us over $16,000 and has to turn it back in after only 3 years. If she's still alive after 3 years, she's without wheels.

At the end of the lease, she can buy the car for the difference between the $19,000 cash payment that would've allowed her to out-right own it, minus the cost of the lease ($9,900). In other words, after already giving us $9,900 cash, (not to mention her trade) she'd have to cough up an additional $10,000! If she leases, then buys the car at the end of the lease, she's paying $29,000 for a $27,000 car and outright giving us her '01 Silhouette, which is in mint condition - and has a clear title (her husband paid cash for it, brand-new).

If she outright buys the new Buick, she's paying $27,000 for a $27,000 car, and her trade-in is factored into the deal in her favor; with the lease, she's just giving us her trade, plus an extra $2,000. The only advantage is, if she dies before the lease expires, the beneficiary won't have to worry about the car being tied up in probate court - and she pays half the cash to drive away with it. Those are the only 2 advantages.

Also, how does she know she'll even have $10,000 in 3 years? She's getting screwed!

If she dies in less than 3 years, it works for everybody: she's driving a $27,000 car for only $9,000 cash + trade. Rather than spending $19,000 (+trade) to out-right own it, she can drive off with it for a measly $9,900 (+trade). That frees up $10,000 cash for her, plus her beneficiary doesn't have to worry about the car being tied up in probate court.

If she lives longer than 3 years, there's no guarantee she'll even have the $10,000 to buy it, which puts her really far behind the 8-ball, because she doesn't have a trade-in either.

The way I see it, she's farther ahead just out-right owning it. Even if she becomes incapacitated and can't drive in less than 3 years, she at least has something she can sell to raise money for a home-health aide. If she stays healthy for the next 10 years, a ten year-old Buick is still a good car - and she only has to put gas, oil and the occassional set of tires on it. To me, it's a no-brainer. But, I know my manager would freak if I pointed out the obvious, if she was leaning toward a sucker deal.

She's not stupid. Not only that, she drives like a man. She test drove that car down a narrow country road: about the width of an alley. There was a dump-truck approaching from the on-coming lane, and she just casually nudged the steering wheel to the right a little, putting the passenger tires in the grass, while talking to me, without slowing down, or pausing her conversation. In fact, I think she even punched the gas to give the car a little more momentum while the passenger tires were in the grass! That's what a man would do, not some typical 75 year-old granny!

Given the fact she isn't stupid, I just hope she doesn't take this one-pay lease as an insult and take it out on me by not buying the car. My manager is the one who originally brought it up.

I guess we'll find out on Monday!