SNL Skit Shows Buying A Car Without A Plan Can Be An Awful Idea

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Senior Pricing Analyst

As CarsDirect’s resident pricing analyst, Alex offers must-know analysis of pricing & incentives to those looking to buy or lease a car. His consumer-oriented coverage of the latest trends and breaking news has been featured in publications such as Car and Driver, Motor Trend, Automobile Magazine and Autoblog.

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, Senior Pricing Analyst - December 16, 2020

The latest episode of Saturday Night Live appeared to make it pretty clear that buying a car without a plan can be an awful idea. Although there are certainly year-end deals to be had, the potential pitfalls facing consumers chasing sales this holiday season can have lasting consequences when it comes to one's finances.

In the TV show's parody of Lexus' December to Remember Sales Event, a father thinks he's getting a deal on an RX with 0% APR and $4,000 down. However, in the case of a $50,000 RX 350 F Sport, a buyer would be saddled with a payment of roughly $767/month based on a 5-year loan before taxes & fees.

Regardless of brand, buyers can avoid this pitfall by having a good understanding of their credit situation and how much they'll be able to reasonably afford. In some cases, brands like Subaru are even offering hidden ways to borrow at rock-bottom rates and potentially lower both your monthly payment and total cost.

Leases can often be an easy way to get tripped up. For example, the 2020 Nissan Sentra SV has a payment of just $149 for 36 months here in California. However, the amount due at signing is $3,549. As a result, the effective cost comes out to $248/month, nearly $100 more than what the payment may lead some to assume.

In what could be the most extreme case, the redesigned 2021 GMC Yukon Denali is listed at just $449 for 36 months but requires a whopping $17,899 at signing. Here, the effective cost translates to $946/month. Believe it or not, that actually makes it almost as expensive as an $80,000 2021 BMW X7 ($1,036)

If you think a cheap car will be more affordable, you could be in for a surprise. For example, better incentives can make the Kia K5 cheaper to lease than a Rio. In addition, $0 down leases can sometimes be a bad deal. The VW GTI is listed at $399, the same payment as an Arteon despite a $6,600 difference in MSRP.

Whether you're planning to buy or lease, considering your options carefully could be well worth the effort. In addition to CarsDirect's monthly ranking of the best lease deals and largest rebates, our experts also compile a list of over 300 leases that you can sort based on effective cost to make the best decision possible.

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, Senior Pricing Analyst

As CarsDirect’s resident pricing analyst, Alex offers must-know analysis of pricing & incentives to those looking to buy or lease a car. His consumer-oriented coverage of the latest trends and breaking news has been featured in publications such as Car and Driver, Motor Trend, Automobile Magazine and Autoblog.

Follow On: Twitter

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