Buying a new car - tips?

[dm0506]

Trading in a paid off 2008 Honda CRV - purchasing a new CRV. I'm thinking end of the year is a good time to buy. Already used Trucar.com and received several quotes all in the same range. 

Thanks!

[Deleted]

I think just using one of those bids will be good.

Make sure they give you the total price, not monthly payment. Know the loan rate of you are taking one out, don't sign up for any extra warranties.

[curbsideprophet]

I am also curious why you need a new car if you are just going to get the same thing. I would keep the current CRV for a few more years.

In any case,I agree with getting a quote from Carmax.

How much do you plan to put down? I would negotiate the price then discuss financing if you need it.

I would try to find a 0% loan and keep the loan to three years or less.

[dm0506]

Thanks for the advice. Planning on going to Carmax too.

Not set on a new car - keeping it is an option. Just figured I could roll in the trade in value to the new car, pay it off in 3 years. If we keep the old one, when it's time to buy a new one it won't have as much value to trade in....

Thoughts?

[curbsideprophet]

From a financial point of view keeping the car you already own will be better. A new car will drop in value as soon as you drive it off the lot. If you really want to replace your cars every five to six years I would not buy new.

How much of a down payment do you have now? I would take the money that you would have put towards a car payment and save up for the next four years. I would reevaluate when the car is ten years old.

[illgetthere]

Dec 26, 2014 13:05:54 GMT -5 dm0506 said:

Thanks for the advice. Planning on going to Carmax too.

Not set on a new car - keeping it is an option. Just figured I could roll in the trade in value to the new car, pay it off in 3 years. If we keep the old one, when it's time to buy a new one it won't have as much value to trade in....

Thoughts?

You are right that your current car will be worth less. However, you will still have the majority of the money that you will spend on 3 years of payments (some will go to extra maintenance). If you are paying, say, $300/month, you will have over 10k extra by keeping your car. Your current car will not depreciate 10k in the next 3 years so you will come out ahead.

Edit: it looks like you might pay closer to 400/month with a new one.

[lys]

I would keep the car you have and wait a few years before purchasing another.
Make "payments" to a car fund for a future vehicle purchase - and you way wind up close to paying in-full with cash!

[changedname]

I just bought a new car today! I am currently leasing (work write off but wont lease again). I got the deal of the century and as my h's car is about to be paid off, we will be saving an extra $400 a month come next month!

No tips except don't go for the extended warranty. I also played hardball and acted all upset at the loyalty discount they gave me at first.

I managed to negotiate 0% for 84 months. We don't need that long of a term but at 0% we might as well take it.

[lys]

Dec 26, 2014 18:30:08 GMT -5 changedname said:

I just bought a new car today! I am currently leasing (work write off but wont lease again). I got the deal of the century and as my h's car is about to be paid off, we will be saving an extra $400 a month come next month!

No tips except don't go for the extended warranty. I also played hardball and acted all upset at the loyalty discount they gave me at first.

I managed to negotiate 0% for 84 months. We don't need that long of a term but at 0% we might as well take it.

How are you saving $400 a month? - sounds like you are replacing your H's car payment with your new car payment.
84 months is ridiculous.  Pay that off no longer than 3 years!

[curbsideprophet]

I think it is crazy that a seven year loan on a car is even an option.

[changedname]

Dec 26, 2014 18:41:24 GMT -5 lys said:

Dec 26, 2014 18:30:08 GMT -5 changedname said:

I just bought a new car today! I am currently leasing (work write off but wont lease again). I got the deal of the century and as my h's car is about to be paid off, we will be saving an extra $400 a month come next month!

No tips except don't go for the extended warranty. I also played hardball and acted all upset at the loyalty discount they gave me at first.

I managed to negotiate 0% for 84 months. We don't need that long of a term but at 0% we might as well take it.

How are you saving $400 a month? - sounds like you are replacing your H's car payment with your new car payment.
84 months is ridiculous.  Pay that off no longer than 3 years!

Oh yes we will. I can't even believe they offer 84 months. We just took it because it is 0%. If we have a lean month or something happens, we have a tiny payment.
I meant actual saving $400 in our savings accounts, not saving on the car.
Dh's payment of $300 will be gone. My lease payment is $320. So we are currently spending over $600 a month on car payments. New car is $200 a month.
We wanted an SUV but decided on the sedan as it was so much cheaper and more mm on gas.

[lys]

If you pay extra every month, (I recommend $400+) you will save $320 a month. I would even consider adding more of that 320 to the monthly payment and get rid of it ASAP.

[VillainV]

Have your own financing lined up before you go. You can check to see if you get a better rate with dealer financing, but at least it takes their financing off the table for negotiations. You can bring it in once you've settled on a price.

If you're trading in the old one, negotiate the trade separately from the sale.

[changedname]

Dec 26, 2014 19:09:56 GMT -5 lys said:

If you pay extra every month, (I recommend $400+) you will save $320 a month. I would even consider adding more of that 320 to the monthly payment and get rid of it ASAP.

Even though it's a 0% loan? What is the reasoning? Wouldn't it be better to put that money in savings/invest and make some interest?

We are planning on keeping this car until it dies if that makes a difference.

[dm0506]

Went to Carmax and have an offer to compare the dealer trade in offer to. Researched finance options. Also have quote from the dealer in hand including dealer installed options plus TTL.....

Decisions! Decisions!

[changedname]

Dec 27, 2014 0:01:49 GMT -5 sexycarrot said:

Dec 26, 2014 19:22:46 GMT -5 changedname said:

Even though it's a 0% loan? What is the reasoning? Wouldn't it be better to put that money in savings/invest and make some interest?

We are planning on keeping this car until it dies if that makes a difference.

I'm having a hard time imagining a scenario I would prioritize paying that off early at 0%. There are so many other places I would make that money work. I guess one scenario would be if I didn't put any money down (which I wouldn't do) and was upside-down without gap insurance--I would pay down enough to get some equity in it. Or if I were just very emotionally averse to any debt. 

The pay-off-your-car-in-three-years rule does not make sense in every situation. But I would love to hear any other reasons people have to pay off early in your situation. 

Thanks. I put $4k down.
I'm really curious to know what the reason for paying it off early would be. I've been trying to work it out all night tbh. Financially I feel like I got a great deal. I'm paying the same as if I paid cash on the spot but I have the $$$ to invest for up to 7 years.

[kadams767]

Dec 27, 2014 7:46:36 GMT -5 changedname said:

Dec 27, 2014 0:01:49 GMT -5 sexycarrot said:

I'm having a hard time imagining a scenario I would prioritize paying that off early at 0%. There are so many other places I would make that money work. I guess one scenario would be if I didn't put any money down (which I wouldn't do) and was upside-down without gap insurance--I would pay down enough to get some equity in it. Or if I were just very emotionally averse to any debt.

The pay-off-your-car-in-three-years rule does not make sense in every situation. But I would love to hear any other reasons people have to pay off early in your situation.

Thanks. I put $4k down.
I'm really curious to know what the reason for paying it off early would be. I've been trying to work it out all night tbh. Financially I feel like I got a great deal. I'm paying the same as if I paid cash on the spot but I have the $$$ to invest for up to 7 years.

Personally, seven years of a car payment would make me nuts. Especially since around year 5 or so, I'd expect to start having some decently expensive repairs or maintenance. I would hate to make a $$ repair on a car that I was still paying money on every month. It's totally a mental thing, but I wouldn't want to make payments that long, even at zero percent.

[changedname]

Dec 27, 2014 8:03:06 GMT -5 kadams767 said:

Dec 27, 2014 7:46:36 GMT -5 changedname said:

Thanks. I put $4k down.
I'm really curious to know what the reason for paying it off early would be. I've been trying to work it out all night tbh. Financially I feel like I got a great deal. I'm paying the same as if I paid cash on the spot but I have the $$$ to invest for up to 7 years.

Personally, seven years of a car payment would make me nuts. Especially since around year 5 or so, I'd expect to start having some decently expensive repairs or maintenance. I would hate to make a $$ repair on a car that I was still paying money on every month. It's totally a mental thing, but I wouldn't want to make payments that long, even at zero percent.

I agree with you. However, now I have remembered why I agreed to it. My H is the opposite of MM in almost every way. He believes that as soon as you pay off a car, you should sell it and buy a new one. He doesn't get why that is the most stupid thing ever and trust me we have had arguments about it. I hate having a car payment.

If we get a 3 year term, as soon as it is up, he would want to sell the car and get a new one. With this very long term, especially at 0%, it is basically the only way I can get him to be MM with car buying. At least I know we will keep this car for at least 7 years. My goal would be to drive every car we own into the ground but he doesn't get it.

[curbsideprophet]

Dec 27, 2014 8:19:14 GMT -5 changedname said:

Dec 27, 2014 8:03:06 GMT -5 kadams767 said:

Personally, seven years of a car payment would make me nuts. Especially since around year 5 or so, I'd expect to start having some decently expensive repairs or maintenance. I would hate to make a $$ repair on a car that I was still paying money on every month. It's totally a mental thing, but I wouldn't want to make payments that long, even at zero percent.

I agree with you. However, now I have remembered why I agreed to it. My H is the opposite of MM in almost every way. He believes that as soon as you pay off a car, you should sell it and buy a new one. He doesn't get why that is the most stupid thing ever and trust me we have had arguments about it. I hate having a car payment.

If we get a 3 year term, as soon as it is up, he would want to sell the car and get a new one. With this very long term, especially at 0%, it is basically the only way I can get him to be MM with car buying. At least I know we will keep this car for at least 7 years. My goal would be to drive every car we own into the ground but he doesn't get it.

have you written out the numbers and shown him how much of a waste it is to buy a new car every three years? I feel like I saw an online calculator for this type of thing.

[lys]

Dec 27, 2014 0:01:49 GMT -5 sexycarrot said:

Dec 26, 2014 19:22:46 GMT -5 changedname said:

Even though it's a 0% loan? What is the reasoning? Wouldn't it be better to put that money in savings/invest and make some interest?

We are planning on keeping this car until it dies if that makes a difference.

I'm having a hard time imagining a scenario I would prioritize paying that off early at 0%. There are so many other places I would make that money work. I guess one scenario would be if I didn't put any money down (which I wouldn't do) and was upside-down without gap insurance--I would pay down enough to get some equity in it. Or if I were just very emotionally averse to any debt. 

The pay-off-your-car-in-three-years rule does not make sense in every situation. But I would love to hear any other reasons people have to pay off early in your situation. 

Granted, I am debt averse.  I support a car loan that is no more than 3 years for repayment --- even at 0%.
Looking at the possibility of a job loss, illness etc - or other financial emergency, you want to have a little debt on your plate as possible. No cc balance, paid off car etc -- allows you to meet your basic needs on less income and allows the ability to save/invest more over the long haul. Most people who carry debt are not disciplined enough to actually save/invest when they have the money (extra 400 she says? - my bet - it will never see the savings account, but will be spent elsewhere)