Category Archives: Cars

How to Lease a Car

I have never leased a car for myself, but since interest rates crashed a decade ago I have considered it several times. (I generally prefer to buy new cars, and when you have cash to cover the purchase one drawback to leasing is that you have no choice but to pay interest on the residual value of your lease for the full term of the lease. With lower interest rates that’s a less significant cost.)

I just helped another friend arrange a lease and realized I haven’t published my guidance on this. Since dealers often use the complexity of lease contracts to pad their margins, here’s all you need to know to cut through the charade:

The three numbers that matter in a lease

1. Purchase price. This is pretty much the only thing you can negotiate. Unless the car you want is in extremely high demand, you should demand the dealer set the “sale price” no higher than dealer invoice minus any factory discounts currently applicable. (If you’re a good negotiator, or you hire one, you can often get the dealer to sell below invoice. But invoice is usually considered “fair.”)

While dealers try to mix the two to confuse buyers and increase their profit, the lease agreement is done after you have a purchase agreement. (You can actually shop around for financing, but whenever I have checked I have found the best lease terms come through the manufacturer’s finance arm, which means you’ll probably end up talking to the same dealer about the lease agreement.) This is where the other two numbers that matter come up:

2. Residual value. This is entirely a function of how long you want the lease to run and how many miles you want to be allowed to drive. Usually the best residual values are given for standard leases (e.g., 36- or 39-month with 12k or 15k miles/year.) But sometimes manufacturers want to push other lease terms to control their resale inventory, so if you’re flexible it’s worth asking about those.

3. Money factor. This is the interest rate you are paying (quoted, oddly, as the annual rate divided by 24). This is almost entirely a function of your credit score. But often a higher initial payment can reduce this, so if you have cash available you should look at options to reduce the money factor by increasing your up-front payment. (In the limit you can pay the full cost of the lease up front.)

Products I’m looking for in 2014


  • Supply in the firearms industry is finally starting to converge on demand. But reloaders are still grasping for powder, and .22LR is still absurdly scarce. We’re looking for both of those shortages to end by the middle of this year.
  • Expanding subsonic rifle bullets: Looks like this is finally the year for these to hit the mainstream market. Outlaw State Bullets and Lehigh Bullets have had some expensive offerings. But this year Norma is supposed to begin importing their Plastic Points, and Remington should finally have an offering tailored for their 300BLK.
  • .38 Supercomp Sig and Glock conversions. The caliber offers the ballistics of .357 Sig in the diameter of 9mm, which translates to more magazine capacity. Also, as a straight-walled cartridge it’s easier to reload.
  • Laser Doppler Anemometers: Solid-state devices for shooters, similar to laser rangefinders, that can measure downrange winds. Winds are the last primary ballistic factor that can’t be measured outside instrumented ranges. Even the most skilled long-range marksmen in the field have limited indicators from which to read and compensate for windage. Admittedly this technology is still some years off from commercialization.
  • Chemical laser guns. Well maybe not this year, but the technology is there for it.



  • High-speed consumer video cameras: GoPro may be inching back into this niche left by Casio four years ago. Their top offerings can now sustain 240fps at 480p, but I’m still looking for thousands of frames per second in a sub-$1000 camera, which is no stretch given the state of the art.
  • Reasonably-priced HD IP security cameras: For some reason these persist at over $200 when the state of the art should have them closer to $100.
  • Digital thermal and night-vision gear: No manufacturer seems to want to lunge for the tipping point. Equipment that is currently produced at a small scale, and therefore costs 4- or 5-figures, could be profitably mass-produced and sold for 3-figures to the sport and non-military security markets.

What’s behind the American SUV fetish?

You Americans just don’t get it, so have this fake SUV! And it costs more!

That’s Car and Driver’s Erik Johnson imagining what European automakers must be saying as they watch American buyers continue to spurn their superb wagons in favor conventional sedans or tarted up “SUVs.”

And I have to agree. Why crop the back of a wagon to make a sedan with a separate trunk? You cut rear headroom and obliterate cargo capacity, for what? A wagon does not take a measurable performance hit over its sedan variant. If anything rear-quarter visibility is a little better. I own a sedan and a wagon. Although my wagon is marginally smaller in exterior dimensions it feels bigger inside. And while I often find myself wishing I had brought the wagon to pick up cargo, I have never found myself saying, “If only I had the sedan here….” Yet, due to lack of demand, after my model year Mazda stopped selling the wagon variants of its popular sedan in the United States.

If a sedan seems like a suboptimal auto profile take a look at the “SUV/Crossover” market. A large part of these vehicles are, as the Germans might say, fake SUVs: just wagons on a higher wheelbase sold at premium prices. They handle worse than a comparable wagon because of their higher center of gravity. They do not provide more cargo capacity than the base wagon. They do provide a higher and more upright seating position, which market research indicates is preferred by females. They also provide increased ground clearance, which means that you are less likely to scrape your undercarriage while driving off road. (Want a higher view and more cargo capacity, but don’t need off-road ground clearance? Yeah, I’m still waiting for performance minivans too.)

In addition to the handling penalty of fake SUVs, “real” SUVs come with a host of tradeoffs that don’t make sense for most drivers: They are designed for towing heavy loads, and so their chassis and related mechanics are upgraded for that purpose. If you don’t tow anything you’re still carrying around the weight of all that extra hardware. This weight burns more fuel and further degrades performance … unless you splurge on a performance SUV that compensates by upgrading everything from the engine to the suspension to the tires. Yes, for nearly 6 figures you can buy a SUV that handles like a sports car. And if you can afford that then fuel costs probably aren’t on your radar, so lucky you. Everyone else: If you’re not towing or off-roading with your SUV you really don’t get it.

A Missing Automotive Niche: Performance Minivans

I prefer wagons to sedans, but my growing family is going to need more space soon.

A minivan would be the obvious step up for increased and accessible capacity, but even the best minivans on the market wallow like boats. It’s as if everyone decided that minivans are for soccer moms who are too distracted to pay attention to handling, or contractors used to driving trucks, so dynamic performance never made it on the list of features for this segment.

It doesn’t have to be this way: Active suspensions have been used for years on luxury vehicles from small sports cars to 3-ton SUVs to provide handling that is both comfortable and responsive. I’ve driven higher-end SUVs with air suspensions or magnetorheological dampers that handle like sports cars.

So what’s wrong with large SUVs? They sacrifice interior space I’d like to keep in exchange for ground clearance I don’t need. And they add weight to provide towing capacity I won’t use.

Please make a large vehicle with the space and ergonomics of a minivan but the handling of a sporty car. I know I’m not the only buyer who appreciates performance, needs more interior space, and will never take my vehicles off-road or towing.

Should You Buy a Used Car?

Many cost-conscious consumers believe new cars carry an unjustified premium and so, as a rule, only buy used cars. In my experience this is a mistake.

The used car market is astonishingly efficient. Granted, there are significant nominal discounts in the private-party car market, but these are due to information and selection biases: Sellers know more about their car than you, and they are more likely to want to sell a car that is problematic, has been abused, or is otherwise of reduced value. You have to be an expert to overcome that information bias, and even experts need to spend time with each car to determine its fair value. If you’re a car expert with time on your hands you can make money trading used cars. But otherwise you should not expect to find bargains in the used market, and especially not from used car dealers, since they are among the experts who snap up bargains and know the fair market prices. Internet sales have only made it easier for them to capture “market” rates for used cars because the internet allows them to expand their geographic reach. (And it’s not for nothing that used car dealers have a sleazy reputation: They don’t stay in business by offering bargains. One car maven once told me most used car salesmen would sell their own mothers a piece of junk.)

In fact the used car market is often upside down. I have found new-car dealers selling used cars for more than they’re selling the new equivalents! There are probably two reasons for this: One is the persistent idea that “a new car loses x% of its value the moment it’s driven off the lot,” which is no longer true (if it ever was). The second is that new cars, except new models that are in high demand, can usually be bought for much less than MSRP, and often less than dealer invoice. So people go into dealers asking only about used cars because they assume the price on a new car is something close to MSRP when it really isn’t, or that they’ll capture a “used-car discount” you can only get from a private party.

If you want a bargain on a car you’re more likely to get it on a new one, especially if you’re flexible about when and what you’ll buy. You only have to do a little research to find brands and models with factory incentives and excess inventory in your region. Then just call a few dealers, ask for their internet sales manager, and find out where they’re selling relative to invoice. (Do it over the phone or Email so they don’t have the chance to waste your time with song-and-dance sales tactics, and try to reach their “internet sales” guys because those are the salesmen who know that you know exactly what invoice and current incentives are, and that if you buy you’ll be a “low-touch” customer who will help them move inventory without taking a lot of time.) Note that dealers can make money even selling below “invoice” for a number of reasons, so if you want a new-car bargain you’re not getting a competitive quote unless it’s at or less than dealer invoice.

The only reasons to buy a used car are:

  1. You are mechanically savvy, and you have access or time to inspect at a lot of used cars to find the true bargains.
  2. You don’t have enough money to buy the type of car you want to own new.
  3. You have the opportunity to buy directly from a trusted acquaintance (avoiding the information and transaction “spread” you pay buying from an unrelated party)

What a Difference an Alignment Makes!

I have enjoyed my Mazda 6 Sport wagon, but early on one thing that bothered me was its tendency to understeer — to scrub and squeal in tight turns. Recently I mentioned this to a friend who does amateur racing and after an extended discussion of suspension geometry I concluded that I needed a custom wheel alignment.

Cars with low-profile tires are even more sensitive to alignment, because there’s less sidewall to flex and compensate for suboptimal orientations between the tire’s tread and the car’s track. Factory specifications for alignment are quite loose, and even those broad ranges are often exceeded once a car is broken in. What surprised me most, given Mazda’s sporting orientation, is that their 6 series suspension does not allow for adjustments in front wheel camber, which is the most important alignment factor in cornering performance.

Fortunately there is enough demand to correct this shortcoming that SPC has produced after-market upper ball joints (SKU 67115 — $165 per pair from that allow several degrees of camber adjustment on each wheel.

Serious drivers and mechanics emphasize that it’s worth paying extra for this sort of work to be done by competent technicians. My expert directed me to a local shop that caters to racers that he knew would correctly install the ball joints and perform a precision alignment, and he said it was well worth the $470 they wanted for the work.

I requested the following specs:

  • Front: Camber -1.1 degree, Total Toe-in at tire: 0mm
  • Rear:Camber -1.1 degree, Total Toe-in at tire: 1mm
  • Caster: Match both sides (or left < right if not exact so that any pulling is towards left)

My goal with these specs was three-fold:

  1. Neutralize oversteer and improve cornering grip, using the most negative camber possible without inducing significant inside tire wear.
  2. Lighten the front and steering responsiveness by eliminating front toe-in and leaving just enough in back toe-in to provide a measure of straight-line stability.
  3. Ensure no pulling, drift, or excessive tire wear, by ensuring caster is balanced and by minimizing toe-in.

They test-drove and measured my alignment before doing the work and noted that the alignment was indeed quite bad overall. For example, my rear tires were actually toed out by 1mm! They didn’t put it on their alignment rack until after they installed the ball joints, so we’ll never know how bad the front measurements were before, but by the time they were done they had almost exactly matched my alignment specs, as shown in the chart below.

Driving away from the shop it was almost like a different car: It tracks straight, the steering is lighter, and it corners like it’s on rails.

Why Don’t Cars Display Engine Performance Data?

Most modern cars have engine control computers and sensors that can tell not only whether your current tank of fuel is contaminated but also whether you would benefit from higher-octane gasoline. Yet few (if any) cars readily communicate those data to the driver. Why not?

Many car engines are designed with higher compression ratios that require “premium” gasoline for optimal performance. These cars can still run on lower-grade fuel: They rely on knock sensors to detect the failure of low-octane fuel to resist detonation and can retard ignition timing to counteract it. However this timing adjustment reduces engine efficiency and power, so typically drivers want to avoid it. (Conversely, higher-octane gasolines are sometimes sold at such a premium to regular that their higher cost might outweigh the efficiency benefit to engines tuned for them.)

But gasoline octane rating is not the only factor that determines safe engine timing. Air density, which decreases with altitude and temperature, also affects detonation. Fuel that works great in summer or mountains may bog your car down in cold or sea-level conditions. Only your engine knows for sure whether it’s running optimally, or whether it would benefit from a bump in your fuel tank’s octane.

Apparently some aftermarket engine computer interface devices (e.g., the ScanGauge or the DashHawk) can allow a driver to monitor engine timing retardation in realtime. Ideally manufacturers should convert these data into useful dashboard information. Perhaps something like, “Your current fuel is handicapping the engine. Increase tank octane by 2 for optimal performance in current conditions.”

Buy a Car with CarBargains

CarBargains is a service offered by the non-profit Consumers Checkbook.  (Checkbook itself is a less political variant of Consumer’s Union, publisher of Consumer Reports.)  For $160 (plus $30 for a subscription to Checkbook if you don’t have one) CarBargains will do the thorough comparison shopping that every new car buyer should be doing himself.

Unless you are an aggressively objective shopper, you should absolutely spend this money before completing a new car purchase.  It could easily pay for itself just in the savings you will realize on dealer-installed options.

I recently tried the service for a relative.  On my recommendation he test-drove an Acura TL and afterwards allowed a cursory discussion of price with the dealer, who said that his best price would be $700 above invoice (and that even employees pay $500 above invoice).  Then we sent away for the CarBargains report.  One week later a report arrived with detailed, binding quotes from ten separate dealers in the New York Metro area.  The report also noted two dealerships that had declined to bid.  The dealer he had talked to earlier offered it at invoice, as did several other dealers.

The report eliminated all of the gaming involved in buying a car — including obscure document and advertising fees that tend to pop-up at the last minute.  CarBargains ensures that you pay a “fair” price for a new car, and that the dealer who most wants to sell it to you can get your business.

Sedan: Acura TL

The 2008 Acura TL is the finest production front-wheel-drive sedan on the market.  Perhaps because the platform is due for a redesign next year, dealers are letting them go at manufacturer invoice — which also makes this the best bargain in premium sedans right now.

The base model is sporty and has been admirably tuned to handle like the best German cars.  The Type-S is an even sportier trim with a more powerful engine and tighter suspension.  The trade-off in upgrading to the Type-S is a slightly harsher ride, heavier steering, and heavily bolstered seats that may not appeal to all drivers.  (The steering weight may be a consequence of the amount of torque the 3.5-liter engine puts out: Barring some new torque-steer countermeasure both of these cars are at the upper limit of the amount of power that can be sent through steering wheels.)

As is the custom, Acura offers very few options.  In the base model you should definitely pay for the navigation system (which is included on all Type-S variants).  With a 7″ touch screen, voice controls, and XM real-time traffic, this is the finest navigation system available on any car.

Although its shifting program is among the smoothest and most responsive I have experienced, the TL automatic transmission has only 5 forward ratios.   (This will almost surely be increased in the next design.)  Nevertheless, those ratios span a good range, giving it excellent mileage at (real) freeway speeds and still keeping ample torque on tap at all speeds.