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Buying a new(ish?) car
illirica
Registered User regular
Registered User regular
Hey, H/A, I have a few questions for you.
JHunz and I are thinking about buying a new car this summer. Our old one has served us well, but it's getting to the point where it's going to cost more to keep it running than the car is worth, and it's a 2-door and we are now a three.
So, my questions are mostly about the process. While we could buy a brand-spanking-new car (it would be in the budget) unless someone has some major reason to do so we would more likely be looking at a "gently used" vehicle. Our current car we bought with 100k+ miles on it and I don't want to buy another one like that, but something with 10-20k on it would be spiffy if we can find it.
Inquiries:
1. Better to buy from a dealer or directly? Our last one we just bought from a guy, and it worked out great, but there are sometimes advantages to buying from a dealer. Thoughts on that?
2. Is there a good time (of year) to buy? We're going to have to get a loan; we can't afford just to write a check for the full amount. Are loans and/or prices likely to go up/down during the spring/summer/what-have-you?
3. Anything in particular we should be sure to look at when buying? I'm not a car person, so if there's something I should look for that might not be immediately obvious, let me know.
We're probably looking for a reliable family car, 4 doors, and I promised JHunz he could have an automatic transmission this time even though everyone knows all the cool kids drive stick.
Also, would there be any advantage to buying a brand-spanking-new car that would be worth the extra price? From what I hear it sounds like probably not, but I may as well ask.
JHunz and I are thinking about buying a new car this summer. Our old one has served us well, but it's getting to the point where it's going to cost more to keep it running than the car is worth, and it's a 2-door and we are now a three.
So, my questions are mostly about the process. While we could buy a brand-spanking-new car (it would be in the budget) unless someone has some major reason to do so we would more likely be looking at a "gently used" vehicle. Our current car we bought with 100k+ miles on it and I don't want to buy another one like that, but something with 10-20k on it would be spiffy if we can find it.
Inquiries:
1. Better to buy from a dealer or directly? Our last one we just bought from a guy, and it worked out great, but there are sometimes advantages to buying from a dealer. Thoughts on that?
2. Is there a good time (of year) to buy? We're going to have to get a loan; we can't afford just to write a check for the full amount. Are loans and/or prices likely to go up/down during the spring/summer/what-have-you?
3. Anything in particular we should be sure to look at when buying? I'm not a car person, so if there's something I should look for that might not be immediately obvious, let me know.
We're probably looking for a reliable family car, 4 doors, and I promised JHunz he could have an automatic transmission this time even though everyone knows all the cool kids drive stick.
Also, would there be any advantage to buying a brand-spanking-new car that would be worth the extra price? From what I hear it sounds like probably not, but I may as well ask.
illirica on
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Posts
I always deal with a dealer because I at least have a ... better way to get an exchange or refund. I wouldn't pay more than $3-4000 for a car from a person, pretty much what I'm not willing to lose because it may just break down as soon as I turn it over after I drive it home.
Labor Day is usually the best time to buy a car in my experience. I know edmunds.com has a good way to predict price shifts so you might want to check them out.
Carfax reports, for used/certified used. If you're buying new? Pick out what you want because that's the whole point. Not much you really need to look out for. But I'm not as savvy a car person as others. Obviously pick a weather/situation appropriate car. For instance, up in Syracuse it is really stupid not to get one without AWD or 4WD. So your mileage may vary.
Good luck, and I hope you find something you like.
You might be able to find a better price with a private seller, but you'll probably want to get it checked out by a mechanic unless you or JHunz works with cars a lot and has a good eye. A dealer (manufacturer dealer, not Joe's used car lot) may provide some kind of warranty for a CPO car if it's out of factory warranty, and obviously a dealer can provide financing.
If you're doing new, best time to buy would be when the new models are on the lot in quantities. At that time they'll have last years new models sitting there and often you can get discounts (manufacturers may offer dealer incentives to move old product). From the financing side there's no better/worse time other then generally interest rates seem to be on an upswing and that'll likely continue, barring major financial events. If you're buying used, secure your financing ahead of time from a credit union. If you're buying new then dealer financing will likely be your best bet.
If you're looking at cars that are "nearly new" (like 2 years old) do run the numbers and compare to new. Personally I've found, for in demand cars, sellers want almost new pricing, and financing rates are usually a lot lower for new. That's less an issue if you're buying outright.
Some dealerships are extending factory warranties and/or including maintenance for the warranty period. Something to factor in if the car you're looking at is being sold at such a dealership. And also you might be able to score 0-1% financing.
I'd say that's probably $4000 too high. I think your base 2011 Honda Civic 2D DX coupe goes for $16K new.
We'd still need financing, I think dealer financing is probably the way we'd go. Most dealers will give you good rates around here.
Does anyone have any recommendation on what sort of financing is sensible? Is there any advantage to putting down a bigger down payment? We'd be putting at least 20% down, but would there be any advantage to putting down, say, 30%, or are we better off sticking with 20-down and holding the rest? Our finances are comfortable at the moment and buying a car is not going to cut into our emergency fund. My personal gut feeling is that it'd be better to put 20 down and apply extra money leftover to our mortgage, but if there's some advantage - like dealers giving you better interest rates - for 25 or 30%, I could go that way too.
Also note that the dealer guy will try to jam as much crap into your financing as possible (they'll likely pull the "here's your monthly payment, is that ok?", which will incorporate a higher interest rate to make them more profit).
New vs. Used - depends on car and flexibility. For some cars, it's a lot cheaper to go used whereas others keep their value much better. Just keep your mind open to both options and have a pricepoint and featureset as your target. Then just test drive your face off, as it's free and will lead to car nirvana.
When we bought my wife's car, They were offering around $5,000 in rebates that you weren't able to combine with the 0% financing that we qualified for.
It turned out to be better in the long run for us to finance through our credit union at 4.3% and take the rebates as it saved us around $3,500 over the life of the loan.
A 2008 LX going for $15k sounds a lot better than the new ones which start at 17,775 with no frills. Plus it only has 30k miles...
Is new really better? I've always heard my whole life to buy used because of the instant value depreciation.
Personally, I'd rather buy a car with 0 miles for $2,775 more.
Completely an individual choice, though.
Some cars don't sell at a "used" discount though, and in some cases buying a new car is cheaper with incentives than purchasing a similar used vehicle.
Most people who advocate used cars are advocating cars that you pick up at a used car dealer for like $4000. If you're going to invest int a $15,000 you might as well pay the $2000 extra and get brand spanking new just for the warranty, which is often times worth at least $2000. Imagine your car throws a rod and you need a $1600 engine on that 2008 car. That's not even factoring in labor.
At least from what I've heard. I'll certainly look into new, but the main reason I haven't yet is because I've heard to buy used, but hey, maybe my family has been feeding me lies.
Bowen: definitely a good point. I'll look into it.
30,000 miles may be worth it if you can put a significant amount down on the car to offset how much a warranty would save your butt.
It can be, but if the specific car you're interested in doesn't depreciate that much, it can be a lot less of a discount. For the maximum effectiveness, you want a car that wasn't necessarily popular, but is considered reliable. Popularity breeds demand and demand breeds preservation of price. You want things with lots of supply and little demand so you can gouge the dealers on their off-lease inventory. Typically this will be the old model of a car that just came out with a new one a year or two ago.
Personally I wouldn't buy new unless it was a demo or I could get serious incentives or I won the lottery, but I buy cash, and I feel comfortable doing a lot of service on my car (so I have a sense of what the maintenance schedule should be like, what could go wrong, and an idea of how much it should cost) and I know a couple shops that I trust for projects I don't have tools/time for. So I feel I have a handle on a lot of the unknowns that steer people away from used cars.
Haven't dealt with carmax, but have dealt with some "non-negotiable" prices. As often as not I've gotten called back.
They did try pretty hard to screw us on the interest at the dealership. We had talked to our bank ahead of time and for the truck and that $ amount our bank quoted us 2.79% the dealer guys called us crazy and tried selling us some story about how these banks promise one rate but then change it or add extra with this or that blah blah blah we told him we would like another day (it was night) to talk to our loan officer at our bank again and see if we could get the rate that promised us.
Sure enough the next day we came back with the paper work and the 2.79% they acted suprised but glad for us, and we drove off with my new-used truck!
So in my recent exerpience for my model/year vehicle the 2 year old model was significantly cheaper, warranty was extended, and am extremely happy with the purchase. As for the financing, it's always good to get some rates from banks or credit unions before going to the dealership that way you can some more barganing power and don't have to take what they give you or postpone the whole process because they're trying to shaft you and you now have to go look for a better rate before you can continue the buying process.
Also be aware of sale tax.