Buying a car
billwill
Registered User regular
Registered User regular
Hey all,
I'm tired of the used cars through Craigslist. I mean, I've had good value there -- my first lasted my two years without a major problem -- but my second (and current) vehicle is having issue after issue and I'm just sick of it. I have to travel a lot for school and my two jobs.
So I'm thinking of going and getting a car through a dealership. I just got a big raise at one of my jobs and just heard news of a Christmas bonus and the time is right. I don't think I could afford anything brand-spanking new, but I don't want something too old, either. I'd be willing to plop 1,500 down on it, and can handle payments up to 300(ish) a month. Is this reasonable?
I'm not entirely sure of all the details and options available to me, though, since I've never gone this route before. I have no doubt a car salesman would try and get me to spend as much as possible, so I figured I'd glean as much as I can now from you wise people, before I go to a dealership tomorrow (or the day after).
I'm also very interested in specific car recommendations. Thank you!
EDIT: Oh, also, when it comes to specific car or brand recommendations, please keep in mind I am 6'4" (with very poofy hair).
I'm tired of the used cars through Craigslist. I mean, I've had good value there -- my first lasted my two years without a major problem -- but my second (and current) vehicle is having issue after issue and I'm just sick of it. I have to travel a lot for school and my two jobs.
So I'm thinking of going and getting a car through a dealership. I just got a big raise at one of my jobs and just heard news of a Christmas bonus and the time is right. I don't think I could afford anything brand-spanking new, but I don't want something too old, either. I'd be willing to plop 1,500 down on it, and can handle payments up to 300(ish) a month. Is this reasonable?
I'm not entirely sure of all the details and options available to me, though, since I've never gone this route before. I have no doubt a car salesman would try and get me to spend as much as possible, so I figured I'd glean as much as I can now from you wise people, before I go to a dealership tomorrow (or the day after).
I'm also very interested in specific car recommendations. Thank you!
EDIT: Oh, also, when it comes to specific car or brand recommendations, please keep in mind I am 6'4" (with very poofy hair).
I hate you and you hate me.
billwill on
0
Posts
Make a budget and stick to that budget. Don't let a sales guy talk you into taking-on too much debt.
Whether or not $300.00 / month is reasonable or not depends on what your income level is & how much of your income you can afford to put towards vehicle payments. Assuming it is reasonable for your budget, you should probably also plan for when you want the vehicle loan to be paid-off by. 5 years? Then you want a vehicle around ~18,000, tops. 10 years? You could go up to ~36,000.
Just bear in mind that the longer you take to pay off the loan, the riskier that loan becomes (both for you and for the lender). I'd never recommend a 10 year loan to anyone, because that is an awfully long time for something to go pear-shaped and screw you over (plus your interest rates are probably going to be ridiculous as a result of the lender wanting to offset their risk) - but that's an individual choice you'll have to make for yourself.
You need to decide if you are looking to buy or lease a car. Leases tend to have lower payments (so you can get more/newer car), but at the end of the lease you either have to buy the car (probably require a loan, though a smaller one then buying new) or return it and get a lease on a new car. Generally, leases also have rules about mileage and maintenance on the car that don't come into consideration when purchasing. (Disclosure, I've never leased, and only bought one car from a new car dealer (currently driving my 3rd car @33), other posters will undoubtedly have more information on this topic).
You may also want to go to your bank or credit union and see what you can pre-qualify for in the way of car loans. Dealerships love to advertise loans with 0% interest, but they also really love that asterisk at the end that says "For qualifying customers only". If you can get a good rate through your bank, that gives you a stronger position when dealing with the dealerships financing companies. You may also want to get a credit report to check what your score is so you can find out what a qualifying customer is.
Don't jump at the first car you like. I'm not sure where you live, but if you've got multiple dealerships in the same area, take some time to check a couple out. Chances are, you're going to be coming back to them over the next couple of years for oil changes and maintenance (they love to upsell you on extended warranties and maintenance plans), so make sure it's one with decent customer service.
Final bit of advice: Ask if there is any penalty for paying that loan off early. If you can budget an extra $25 a month for each payment, that's an extra $300 each year taken straight out of the principle, which means it accumulates less interest, which in turn means that more of each payment goes to the principle.
Home Inspection and Wind Mitigation
http://www.FairWindInspections.com/
The loan people at a dealership can chop up pretty much every car loan into whatever monthly payment you want. Just 120 monthly payments of 199. But if you are going to a dealership talk to the banks in advance. Or they play with the numbers to maximize gain. I know you said 230 was your monthly limit but the best I could do was 238, and spread out raises the cost of the car.
Have financing on hand before you ever talk to the car dealer. You should only talk car and price. Show me a new impala with these features and know how much the car costs.
Might just be semantics, but I've understood that you want to know your final cost, not the monthly since that's much easier to hide: can be spread out over more time, different interest rates, etc.
Final cost being what you pay at the dealer in cash/check, and whatever the car price is plus the cost of financing. When you can say, "I own this."
Regardless, if the dealer does a four square, walk out.
Use the calculator to figure out the term you're comfortable and then get the total amount you want to spend. Make sure you negotiate off that. IF you're planning on trading in your current vehicle, remember to negotiate the price of the car you're buying first THEN see what they'll offer for the trade in. A lot of dealerships try to get you into four square negotiating tactic (see more about it here http://consumerist.com/2007/03/30/dealerships-rip-you-off-with-the-four-square-heres-how-to-beat-it/) it's in your interest to compartmentalize things and have the total amount you want to spend (NOT THE PAYMENTS YOU WANT) figured out and the loan term you're willing to deal with.
Depending on his bank and the dealer, he might be way better off getting it financed at the dealer, especially if he buys new.
Negotiate the price of the car, and then negotiate financing. You may be able to swing a pretty good deal. Impreza's sticker price when I bought mine was $21,500. The dealer financed with 0 down and 5 year term and the total payable is $22,500. They discounted pretty much all the extra fees and gave me 0.9%.
The bank told me the best they could do was 8%.
Check all your options.
If you're buying new, use truecar.com to either find a dealer or as a negotiating tool. Take the price they offer and just say you'll walk and you'll be amazed as thousands melts off your final purchase price. Also, check the various deals that manufacturers offer, as you can often get default 0% or .9% financing. If you're buying new, try to buy something off the lot, as it means you'll get a better deal, as once a vehicle hits the lot, it costs more money each day it's there.
In terms of used, look for cars that are hovering around 24k or 36k miles, as that usually means it's a lease return, so generally in good shape.
So yeah examine all options, but keep in mind that there is an adversarial nature to buying cars, every dollar you save, is a dollar they don't earn.
Edumunds.com has some great guides for buying cars.
at your height, I would look at Dodge or Chrystler. It won't be a fantastic car at that range, but it will get you from here to there.
i recommend Carmax. Low hassle.
we also talk about other random shit and clown upon each other
They're not allowed to add extra fees, as the current crop of truth-in-lending gives you an actual number that you pay in interest on the top line next to rate etc.
you pretty much get what you get here
the only thing they can surprise you with is warranty/gap insurance costs, but they have to tell you about them and you have to sign off on them before the loan is executed
basically just add 2k to the purchase price of any car bought at a dealer
we also talk about other random shit and clown upon each other
In general you want to go for the best interest rate on the shortest loan you can handle, payment size-wise.
Sometimes you you may want to veer from that path if you need to keep your debt-to-income ratio at a certain level. I wound up getting a 6-year 4.5% interest loan on my latest car for that reason. The loan has no pre-payment penalty so I'll most likely have it paid off in less than a year total while only paying a few extra bucks compared to a shorter, lower interest loan that would have left me with much higher monthly minimum payments.
Mine was a very specific case but it's important to remember that you are not bound to making minimum payments and paying off the car for many years, you can always pay it off early and usually with no penalty.
If you pay a fair price for a used car, you generally don't need it (depending on the make and model, some hold their values better than others). For a new car it's almost a necessity, as it helps cover up the initial depreciation. Also, check your auto policy, you might be able to get the gap coverage for cheaper from your current insurance provider than on your loan.
Yep, it was way cheaper through my auto insurance. As you generally need proof of insurance to drive the car off the lot, just check the box/ask them when you call your insurer.
From the OP it sounds like you've had some negative experience w/r/to car ownership lately. It could've been just bad luck, but perhaps this was due to insufficient maintenance or slow to diagnose issues? A lot of expensive issues can be headed off by adherence to a good maintenance schedule and attempting to address any lights on the dash in a timely manner. This preventative maintenance will cost money, less so if you are willing to do some of it yourself, but then you need tools, time and info/experience. Leasing a car will build the majority of basic maintenance into the monthly cost (replacement of wear items like brakes and tires are usually not included in lease agreements), but that will come at a premium, and you still have to bring the thing in to get serviced.
A lot of the pain I've heard about car ownership comes down to not doing timely maintenance or not looking into issues early on in their detection. Like medical/dental care, if you don't put in the regular preventative effort, you may end up with expensive issues.
I pay very little to maintain our cars since I do most maintenance/mech repair on them, but I'm not intimidated by it and we can get by if one of them is down for a few days while parts come in. I'd never buy a new car or lease cause it doesn't make sense to me. Contrast with my dad who will never change his own oil much less try to fix something that broke; makes sense for him to lease, though he prefers to only have "new cars" (cars still under their original manufacturer warranty since he won't buy extended).
I have had nothing but disaster after disaster with that car. Everything from mismatched tires (courtesy of the dealer) blowing out, to the entire electrical system going haywire and needing several components replaced, to batteries being bolted to the inside of the car, to whole systems (such as pressure sensors in the seats and temp gauges) that are just plain faulty and can't be fixed at all. My personal favorite was the first time one of the tires blew and I tried to replace it with the spare. According to the manual, the compartment where the jack and associated tools are stored is locked and can only be opened by the car's jack handle. The one INSIDE the compartment.
The lesson I've taken away from all of this is that everyone just wants to make as much of a profit as possible. Some of these problems could be traced back to the dealer (putting the worn out, mismatched tires on, for example), but most are likely just due to the poor quality of the company that made it (good ole Chrysler). If you want a quality car, look at the whole picture piece by piece, starting with the people who made it, then the people who sold it to the dealership (if that information is available), then the people selling it to you. With all the resources of the internet, it shouldn't be hard to look through some reviews based on other consumers' experiences (with the make and model car, with the manufacturer, and with the dealership).
I also personally wouldn't recommend anything made by Chrysler. Obviously.
Scribe. Purveyor of Logic. Player of Video Games.