We got a new car! As mentioned previously, we were in need of a new car. With baby number three on the way we needed something to replace the existing clown car, our 10 year old 2001 Toyota Solara. If it weren’t for our growing family, I would have been happy keeping the existing car until it stopped working.
We already have a paid off 2007 Honda Odyssey, so no need for another soccer mom mini-van (yuck). We previously had a 2002 BMW 530 and wanted a new car along those lines. We wanted somewhat of a luxurious sport sedan. Our requirements were:
- Needed to seat five tall individuals (my wife and I are over 6′!)
- Ability to hold 3 car seats in the rear
- Buy new or slightly used (less than 3 years old)
- V6 with decent highway mileage (25 MPG or greater)
- Like the previous Toyota, own for 10 years and drive into the ground
- $30-40k range
- Apple Ipod integration would be nice
This puts us in the high-end sedan or lower end luxury auto. Our short list of cars we looked at:
- 2010 Ford Taurus – Determined the interior was not big enough, and we were concerned about accelerated depreciation that come with Fords.
- 2010 Toyota Avalon – Toyota was offering a promotion of 5 years with 0% financing. The issue with the 2010 model is an outdated navigation system that comes packaged with the better audio system. The interior looked dated and slightly cheap looking.
- 2011 Toyota Avalon – A mid cycle refresh for the car. They improved on the navigation and interior. The exterior was altered slightly and IMHO looked better.
- 2010 Hyundai Genesis – Hyundai improved the suspension from the 2009 model. It comes with a 100k miles/10 year warranty. Overall Hyundai has great reliability ratings from JD Power and Consumer Reports.
- 2007 Lexus GS 350 – Turned out to be too small compared to the other cars. Poor and outdated navigation system (can’t be programmed while driving???) Has a great residual value though.
- 2010 Buick Lacrosse – Nice looking car. Buick has certainly come a long way. Ruled out this car because of the government intervention and how they screwed over bond holders with the union getting a sweetheart deal.
We considered buying a used car, but wanted a new car since we will own this car for at least ten years.
With all the cars on our short list, I did considerable research. I visited Edmunds, Kelly Blue Book and Consumer Reports. I visited the manufacturer’s web sites and specked out the price and features. I read consumer reviews and real world experiences with the cars.
We narrowed our selection to the 2011 Toyota Avalon and 2010 Hyundai Genesis. We got a babysitter, so we can take the full Saturday to look at our choices. Our experience, when buying the Honda Odyssey, told us not to bring any children along for the “ride”. If anything, the sales person can use the children to their advantage in getting us to buy a car and get out of the showroom.
2011 Toyota Avalon
Oddly enough the book “Stop Acting Rich” mentions many millionaires own the Toyota Avalon. However, the Avalon is like a GM Buick of yesteryear because many old people drive the car. It’s not exactly a hip car if geriatrics first come to mind. The great thing about the Avalon is it has many features of the high-end Lexus brand, without the prestige of owning one.
We went first to visit the local Toyota dealership. It was interesting to note, on the day we visited, the dealership was empty. This is a dealership we’ve been to previously, and it always seemed had a decent amount of foot traffic. Not sure if it’s related to the current PR fiasco or another issue.
On the showroom floor they only had the 2010 Avalon model. We noted that while 2010 model was nice, the interior looked dated. They had one 2011 model and the salesman drove one around so we could test. Overall, the car was nice. The handling was very smooth, and the interior was very quiet. They were not offering any promotions, nor was I aware the 5 years/0% rate did not apply to the 2011 model. They also did not have the model (the Limited edition) we wanted on the lot. So we would have had to wait at least one month before we could have picked up the car.
The lowest rate Toyota offered on the car was 5.99% for 5 years. For future reference, we should have lined up an auto loan in our pocket before visiting the dealerships. Even if our goal is to payoff the loan in three years, I wasn’t going to apply for a loan that costly.
2010 Hyundai Genesis
The first thing I noticed, compared to the Toyota dealership, the Hyundai dealership was hopping. During our time there, in addition to the car we wound up buying, they sold three other cars off on the showroom floor. At the time of our arrival, they had a white Genesis V6 on the showroom floor. My wife immediately commented on how much better the interior and exterior design of the car compared to the Toyota. I, of course, already knew this and agreed with her assessment.
I’ve seen reviews state based upon its features and build quality the car should be priced $10-15k higher. When first looking at the car you get an impression that an experiment at a laboratory occurred, but in good way. From different angles you get a Lexus LS, BMW 5 series, an Infiniti G Sedan, and Mercedes Benz front grill all rolled into one. I’m sure the “copy cat design” was done intentionally. The car oozes luxury, and from our experience it isn’t just superficial. The fit and finish rivaled the Toyota Avalon. Though there are few not often seen places which have cheap looking materials (inside the center hand rest and vanity mirrors).
Along came our car salesman Vincent. Living in NY, he fit the typical Italian car salesman. He was slick, but I wasn’t going to fall for the typical sales pitch. The guy was nice, but I could tell we were in for some interesting sale negotiations. The sales experience for Hyundai is very much different than say a luxury brand dealership. At a BMW or Lexus dealership for example it’s a much more relaxed and less haggling environment. We knew this before stepping into the dealership and had no issue with this part of the process.
Many years ago a friend, who was a car salesman, explained the sales process with lower end cars. Dealerships like Hyundai, Nissan, Honda, and Toyota all make their profit in volume. A common sales tactic is getting you to purchase the car and drive off the lot all within the same visit. So the sales process is much more high pressure. Be expected to stand your ground if you are looking to purchase, or just walk away.
Vincent got us a car to test drive, and we took it for a spin. I noticed the suspension was harsher than the Toyota, but not as sporty as say our previous BMW. Like the story of “Goldilocks and the Three Bears” this car was just right.
We wanted the white V6 Genesis with the tech package on the showroom floor. So the negotiation began. Vincent was concerned about the total price, and I was concerned about the monthly fee. In the end, we got the average Edmunds TMV price. So not a bad deal, but not a bargain either.
We put down $5k, and got only a $2k trade in with the old Toyota Solara. We expected a poor trade-in for the old car. The car had over 120k miles, was in an accident (the car was never the same after it was repaired), and was rusting in the an area from the accident.
Our loan was a 3.89% rate for a 5 year term. More than likely, we plan on paying off the car in 3 years or less. Yes we could have paid the car in cash, but choose not to based upon how low current rates are. I suspect we will not have access to these low rates 5 years from now.
As you probably tell, I’m a car nut. So not any car will do. If you asked me ten years ago would I own a Hyundai, I would have never believed it. Hyundai in the past ten years alone has dramatically improved quality, reliability, and IMHO is on the fast track up.
It took the Japanese manufactures almost 50 years to get to the point they are at today. Hyundai looks like they are doing it in half the time.
With either car, we didn’t care about the luxury brand status. We knew with the Genesis model they were going for the “copy cat” look. This was no different when the first Lexus LS appeared on the market.
We weren’t buying the car for the “snob” appeal and cared less what others thought of the car. Hyundai understands this and probably was the reason why no logo appears on the front of the car. We wanted a car that had luxury features, but didn’t want to pay the luxury price. The Hyundai Genesis definitely has the best bang for your buck, but with some compromises.
Is a Hyundai service department as good as a Lexus? Of course not! We cared more about the reliability, safety and features of the car, than if we can get a freshly brewed cup of coffee at their service center. When purchasing a car, the goal should be visiting the dealership at little as possible, not becoming best buddies with the service rep. This seems to be the deal when buying a Mercedes Benz. Fortunately, if this Hyundai service center isn’t good, there are two other dealerships within 10 miles of our home. Though this dealership appears to be better than some of the other local Toyota and Honda dealerships we’ve been to in the past.