As a car buying expert and professional car shopper, I get emails. Lots of emails. I’ve decided to pick a few questions and try to help out. This week we are discussing the strange number of used ultra-low-kilometre, red G70s, and the best strategy to think about buying or leasing a car while the pandemic impacts the markets.
First, what’s up with all these used, red Genesis G70s with hardly any kilometres on them?
I was looking at used Genesis G70’s on AutoTrader. I noticed (very obvious) that there are a lot of G70’s listed as “red, used, and 50-120 kilometres”. Those listings also have no pictures. What gives? Are these scams or is a ship load of red cars being sold off?
These are no scams. I actually encountered this situation with a customer who was shopping for a new G70 and was getting frustrated at the lack of responsiveness and deals on the new models. Like you, I found a used red one with surprisingly low kilometres. According to the dealership, there was a defect with the red paint and Genesis bought back a large number of red cars. The paint was fixed at the factory then the cars were wholesaled back to the dealerships so they can be resold as used models. A number of these cars are even Genesis Certified, and the one my client bought even retained the concierge-style service.
A quick look at Autotrader, reveals about 50 red Genesis units with under 160 km on them. I would say these cars are pretty excellent values as you get essentially a new car with substantial savings off the MSRP and possibly a longer warranty.
Next, with an upcoming expiring lease, what is the best path to get another car while being mindful of the overall economic situation related to the pandemic?
I have question/article request regarding leasing versus buying during the pandemic. My 3-year lease is up in January. In a normal world, I would just get a new 3-year lease of the same model vehicle. But given the pandemic, there is a lot of uncertainty and instability in employment in many industries. Committing to a 3-year lease seems like an unwise decision during these times. So while still desiring something “new” what is the best option? Try to get a “new” short term lease, try to extend the current lease, take over someone else’s lease, buy/finance, or some other option? I assume the world may be closer to normal in 1-1.5 years so that would be the duration the intermediate vehicle solution would need to cover. I have to imagine there are other people in the same situation that need a stop-gap vehicle solution until the world has returned to “normal.”
While we can certainly hope that COVID-19 will be well under control by January, we certainly can’t count on that especially given the indicators in several parts of the country. I also think your concern about the residual economic impacts of the pandemic is valid.
In regards to what to do in January when your lease is up, I’ll run through a few scenarios. You can extend your lease but that may not buy you enough time as most extensions will only last for around six months. Taking over someone else’s lease that only has a year or so left could be worthwhile, but remember, you are essentially stuck in that car during that term, so if your situation changes and you need to exit that lease it will be expensive to do so. The same goes for a new car with a “short term” lease as you have to commit to the duration and the payments are likely to be higher due to the shorter term.
I think your best bet is to turn in your lease and buy a used car, that is both reliable and holds value. This might not be a fancy car, but it’s something that will give you both a reasonable payment and low-running costs for the duration you need. If the worst-case scenario happens and you need to off-load that car, you can do so easily without taking a major hit on depreciation. Also, if after that year to eighteen-month duration is up and you still don’t feel confident in the market, you can keep that used car for as long as you like.