With the LR4 getting on in age and not being needed to carry three rows of kids any longer, my wife was ready for something smaller and more car-like. It was December, 2015. We still needed 4WD, probably more so than ever, since we had a mountain place now. Towing was on the list for the boat, but not essential, since our 16 year old son had an SUV and we were keeping the LR4 as well for me. Lower was important, as we were carrying elderly relatives to the doctor and whatnot, since they no longer could drive.
We made a list of the usual car-like crossover suspects: The Mercedes ML, which was being renamed GLE for 2016; the BMW X5, The Infiniti QX60, and the Lexus RX. We considered but ruled out the Mercedes GLK (being renamed the GLC), the BMW X3, and Lexus NX as they were a little too small. We still needed to carry people, walkers and wheelchairs and they wouldn’t cut the mustard.
The Lexus RX and Infiniti QX60 then had to be culled as they were not over 6000 pounds GVWR. This was disappointing, as they were probably our top two picks. They could never tow the boat, either. The RX can be polarizing, but I kinda liked it.
The QX60 is an “Altima on stilts”, as it is derisively described, but at least that lends it car-like manners. But as a small business owner, an SUV over 6000 pounds qualifies for “expensing”, rather than depreciating it over an extending time frame. A pickup with a six foot bed does as well. So, one can get an up front discount, in essence, on a qualifying vehicle. The 2002 ML320, the 2005 QX56, and the 2011 LR4 were all overqualified by many pounds, so we had not put much thought into it before.
These smaller SUV’s were cutting it close, though. The difference to one’s wallet was pretty significant. For an SUV over 6000 pounds GVWR (Gross Vehicle Weight Rating, or the car fully loaded with passengers and luggage), you can expense the first $25,000.00 of the purchase price and expense one-half of the balance. For an easy example, take a $75,000.00 SUV. Expense the first $25,000.00 and one half of the balance, or 1/2 of $50,000.00, which is another $25,000.00. So in the tax year of purchase, you can expense or “write off” $50,000.00. Assume a 40% state and federal combined income tax rate, and that’s $20,000.00 off your tax bill. Yes, you spent it on the car instead, but that $20,000.00 was gone either way. You can spend it on yourself, or send it to the government (no political comments or analysis, please). The $75,000.00 SUV costs you $55,000.00, using this tax incentive. Under the latest Congressional version of the incentive, this will “sundown” in the coming years, 2019 I think.
Lease payments can also be 100% expensed by a small business as an aside, but we have not leased. I drive too many miles, and my wife likes to keep her car (nowadays) for 5 or more years.
The GLE and X5 crossed the hurdle. A Jeep Grand Cherokee does too, but I couldn’t get her interested in looking at a nice Overland the local dealer had. Her sister has had three Grand Cherokee lemons and that soured the rest of the clan I’m afraid. Her 2011 had the Pentastar V6 that self-destructed; the replacement 2012 had a vibration Jeep could never eliminate and they actually bought it back from her; and her 2014 had peeling paint on the aluminum hood which is just now becoming a wide-spread service campaign.
We drove the GLE and X5. Long story short, while we liked them, geez, they were far more expensive than I had anticipated, based on my research. We also had a problem finding a GLE equipped the way we liked. They were mostly completely loaded, with more equipment than we desired.
The closest MB dealer (75 minutes away) had a 2015 ML in the showroom that was equipped perfectly, but we hesitated to buy a new car that was instantly dated, since the 2016 changed the name (to GLE) as well as updated the front and rear lights and trim. My wife really liked it though, and we returned to talk seriously to them about it. Well, it turned out it had been a demo and had been titled as well. So, we could not take the accelerated expensing on it since it was not new (I’d have to take the long route, depreciating it slowly over a number of years), and a year of the warranty had run out. It would have been a contender, but they really didn’t want to discount it at all….I want to say $1,500.00 which was peanuts for it being used.
The neighboring BMW dealer across the street (same franchise owner) had LOTS of 2015 X5’s and they were willing to discount quite aggressively with little provocation. You have probably heard that late in the month is a good time to buy a car; the end of the calendar year is the best buyer’s market as far as I know. The dealer wants to meet their monthly AND annual goals.
We liked the X5 that caught our eye, just sitting in it. Dark grey, light grey interior, only about a dozen miles on it! It’s quite a different feel and appearance inside from the ML, “hipper” and “younger” come to mind. It was priced almost lock step with the ML, but the discounting (from the same franchisee owner, no less) was quite a bit more accommodating. We decided to take a test drive. The salesman said “I have to drive off the lot”, which I’ve been told before. I’ve always wondered why, maybe someone can tell us in the comments if this is even true. As an aside, I recently test drove a Lexus from the same franchisee, and the salesman let me drive it off the lot.
But I digress. The BMW test drive was a turn-off. The middle-aged salesman, who seemed so nice and mild mannered, took us to a very large, half-finished and abandoned office park because we could “drive without traffic interfering”. OK, seems logical enough. It did seem to me (I was riding in the back seat) that it would really creep my wife (and me) out to think that he would do this with her, if she was alone. It just seemed odd to be in such a desolate place.
When he pulled onto a long, straight, empty street, he stopped. He said “Hold on”, and then floored it. The BMW of course took off like a shot, and I grabbed onto whatever I could. Then, after gathering what seemed like a lot of speed (60mph? 70mph?) he stood on the brakes with all his might. The BMW, accordingly, stopped quite quickly. “Wow, how about that! That ML can’t do that. This is the sports cars of SUV’s, ya see?” My wife and I both muttered something like “yeah, yeah, cool”. We knew what the other was thinking. Sale over.
While I am sure that such antics appeal to some buyers, I don’t know what about us (middle age married couple, who clearly don’t look like daredevils) made him think this was going to impress us. Or, that empty streets in abandoned office parks represent my daily commute. I was turned off and of course, as for the X5, I thought to myself that I sure didn’t want it now with such mistreatment at such a young mileage.
We exchanged pleasantries and went home to deliberate. I really wanted to crunch numbers and try to figure out why the ML and X5 were so much more expensive that I expected, based on my research. Geez, based on these prices, how much is a Porsche Cayenne? I did some cursory looking and the Cayenne kept coming up at roughly the same sticker as the ML and the X5, just a little more, which didn’t make sense.
After drilling down, I found two key issues: All Cayennes are equipped with AWD and leather seats, standard. The ML/GLE and X5 come standard with vinyl (leatherette, MBTex, faux leather, etc.) and rear wheel drive. AWD and leather are optional at significant extra cost, as of course they are lumped into packages with lots of other items one may or may not care about.
So, looking at manufacturer websites and base MSRP’s, the Cayenne appears much more expensive than it is in the real world, most GLE’s and X5’s being equipped with packages adding leather, AWD, and a host of other items. A “stripper” Cayenne has leather, AWD, and most other things we cared about for about the same money as the loaded ML’s and X5’s we were seeing on the ground.
Huh. Hadn’t considered a Cayenne. And it was over 6000 pounds GVWR, too. I know it shares a number of components with the VW Toureg, which some find to be a turnoff. That didn’t figure into my thinking one way or another, though. Ironically, the closest Porsche dealer was only about 25 minutes away, closer than the BMW or MB dealer.
We went to the “local” Porsche dealer, a combo VW/Porsche/Volvo store. They only had one new Cayenne in stock, in the showroom. They insisted on backing it out for a test drive, so we obliged. It was nice, but my wife’s absolute least favorite color (white) and it had 20 inch wheels, which made it ride like rough though they looked good. The salesman did guide us on a pretty long and meaningful test loop, involving traffic, interstate, and country back roads. You could tell something about the car, versus the office park drag strip.
Back at the showroom, my wife noticed the wall display of paint and upholstery color samples. She liked the Umber color, an shimmery metallic that looks brownish next to a grey car, and dark grey next to a brownish car. An unusual color, but I liked it too. “Umber, huh?” the salesman said. “I’ve never actually seen any Porsche that color, but people seem to like it a lot here in the showroom”. We talked numbers. Like the LR4 experience, he informed us “we don’t discount these”, though he lacked the condescending tone. They did have a couple of loaners they would discount a little. Like, $1,500.00 little, which I didn’t consider to be enough as with the demo ML. And since they were titled to the dealership, I couldn’t get the bonus depreciation either.
So, of course, the internet comes into play here. I have to say I kinda feel for the car salesmen. The internet is a powerful shopping tool and equalizer for sure. The drawback, if there is one, is that it is hard to find two identical cars. If they aren’t identical, it’s “apples to oranges” in the salesman’s eyes and your research can be dismissed as not being representative of their car, etc.
We thought the Cayenne looked good in black. So I started looking for a “stripper” black Cayenne. The Porsche website proved to be superior in this regard, giving detailed data about the cars, their location, options, and equipment in an easy to read format. I found a black stripper a couple of hours away. And another several hours away, coincidentally at the exact same dealer we had bought the LR4 almost five years before (it is a Jaguar/Porsche/Land Rover store). I compared the cars line by line, and they were absolutely identical. Jackpot! I emailed the contact form for both dealers, and explained that I was looking at both units, at both dealers, and would like to buy from whoever had the lowest out the door price.
The LR4 dealer replied first…..and it was our same salesman! Small world. We liked him so much the first time around, and now he was over the internet sales. He told me to get the quote from the closer dealer, and he’d see what he could do.
The closer dealer replied soon thereafter, with what amounted to 12% off MSRP. Wow, I wasn’t expecting that. Made it a great deal, I thought. I sent the pricing info to the LR4 dealer. He replied and said “I can’t match that. They are losing money at that price. They are giving you all the holdback and going in the hole to make their numbers by the end of the year. If they will do that, you need to go buy it from them”. With 12% off, the Cayenne was less than $5,000.00 more than the ML or X5. In absolute terms, it had less equipment…..but it had everything we cared about.
Because I liked him, though, and the LR4 purchase experience was so easy, I told him “If you can match their price, I will drive further and buy it from you all because I know you, you all were easy and pleasant, etc.” They were in a beautiful city my wife liked to visit anyway. He said they would do so, so we hit the road a few days later.
Once we were there, we looked at the black Cayenne. But wow, they had a number of them. All different colors. And in the back corner of the crowded lot, an Umber one. We sheepishly asked him if he would get it out…..that would involve moving about a half dozen other cars. It was optioned up a little more than the black “stripper”, with a panoramic sunroof, LED headlights, and heated/cooled sport seats. But it had the standard 18 inch wheels which would be more comfortable, as well as cheaper at tire replacement time.
We asked our repeat salesman about that one…..and after checking with the sales manager, he said “you can take the 12% off any Cayenne on the lot”. Wow, OK then! We drove the black one, the Umber one, and a charcoal grey. We settled on the Umber and set out for home about dark. Were we nuts? We never set out to buy a new Porsche, after all. With the 12% off, it was more than the X5, but about the same numbers as we were getting on the new GLE’s. And it is quite a bit more car like. Lower for sure, and even the bolstered sport seats are soft and cushy, almost Cadillac-like compared to the LR4.
It’s now been 20 months and with my wife no longer driving the kids around, it only has 14,000 miles. We’ve had no real issues as you would expect with such low mileage. The driver door check started “clicking” when opening or closing the door about a year ago and was replaced at the first dealer service. I did something I have never done before, and I did purchase the maintenance plan, a 4 year/40,000 mile plan which is the longest one. It was a genuine, generous discount off the factory recommended services a la carte, and it would be honored at any dealer, so we have used the one closest to the house. It basically made the overpriced dealer services, reasonably priced to my mind. With the 0.9% financing we were getting, I rolled it into the loan.
The computer prompts you based on days lapsed, number of cold starts and other parameters, as well as miles, so the “12 month, 10,000 mile” service (an oil change) got called up in August 2016 at 8,000 miles. The 24 month, 20,000 mile service (oil, cabin filters, brake flush, rotate tires, check and lubricate about 900 items) was called for in August 2017 at 13,500 miles. 36 months/30,000 miles is essentially an oil change, and 48 months/40,000 miles is the big one. All the filters, all the fluids, and spark plugs. You get a free full detail at every pit stop.
The 40,000 mile service alone would usually be more than I paid for the whole plan. After 40,000 I think I can handle it on my own. I’ve got the proprietary oil filter wrench on hand already, and I can do fluids and plugs. I’m getting ready to do the LR4 diffs, transfer case, spark plugs, and transmission over Labor Day weekend as it closes in on 100,000 miles.
So that’s it for the “regular” cars, the family cars, the “good” cars in our household. I’ll shift to my “beater” cars I alluded to in an earlier post, the string of older, used, or distressed cars that I have driven for myself since 1998 or so. Here’s a hint of what’s to come, though it looks a whole lot nicer than mine did.
What’s the most unexpected car purchase you made? The one you didn’t forsee taking home?