Better to pay in whole or finance a car?
LikeAnOcean
Posts: 7,718
Which is a better Idea?
I can afford to trade my car in plus 10k. I have the money, but that would take a good chunk out of my savings. It would probably push me back a year or two from buying a home, which I'm not sure I'm going to do when my lease is up anyways.
I can afford to trade my car in plus 10k. I have the money, but that would take a good chunk out of my savings. It would probably push me back a year or two from buying a home, which I'm not sure I'm going to do when my lease is up anyways.
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Which if you do, it would defiantly be worth it!
I'm not a fan of the idea of taking out a loan(that has interest) for a car, because you will never make back that money.
So if you don't qualify, maybe get a used one? Because the house should be a good investment.
If you can put as little down as possible and afford the car on a buy do it
Don't blow half your savings on a car..believe me I have friends who have wasted so much money on cars its sickening
Especially if you're looking for a house and saving money for that goal..cars depreciate over time..you'll get much more out of owning your own house
The ONLY thing better than a glass of beer is tea with Miss McGill
A protuberance of flesh above the waistband of a tight pair of trousers
if you can get 0 APR i would go that route and just pay it off as early as you want to.
PS i bought a 6 year old used car for $8000 and spent 250 a month on gas, and about 3000 dollars worth of repairs
I then bought a 1 year old, gas efficient car for 16000 and now I'm only spending about 100 a month in gas and not a dime on repairs.
I'm much happier with the more expensive/newer car
Must have an earnest desire to save the world
Apply in person
Although even with teh 0% interest I am pretty sure with most dealers if you offer to pay for the car in cash up front, you are going to get the car for cheaper than if you pay it over 60 months. I mean yes there is 0% interest but they basically just add those costs into the sticker price of the car.
cars are depreciating assets
new cars lose significant value the second they leave the dealership
as to financing, 0% is the way to go-earn interest on your cash in an ING account (or wherever you put your $$) and pay the same price for the vehicle
Negotiate hard, dealers are dying for sales.
Otherwise the questions is whether you can earn more holding the cash than the interest rate you would be paying by financing the vehicle
Except you wouldn't pay the same price if you paid cash vs 0% financing, since if you are offering the full price up front you have way more room to negoitate and can get a way better price than if you took the dealer's financing package. I mean think about how much work it is for them to basically set up and manage the finaicing system, just because it says 0% doesn't mean they are doing that for free. If you take those costs out of the equation for them it means the can sell the car to you for less and still make a profit.
I say negotiate the same price wither way-especially a US maker
they are desperate
but yes my advice assumes the same purchase price either way
They are desparte which is why if someone were to offer them all the money up front they would be happier to take it rather than them not getting it all until 5 years from now since the company might not even be around for 5 years.
Another good way to save money either was is to go and buy at the end of the month. That is usually when dealerships monthly bills are due, and sales numbers get added up so they are more motivated to make a sale and generate cash. Even better if you can go at the end of the calander year.
This is true. A lot of people I know thing this is some sort of old wive's tale or something but last year I bought my MINI. For a long time they would not negotiate and tell me they sell at MSRP and have no need to bargain. Come 12/26, they made a deal.
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Bridge School-10/23/2010,10/24/2010
PJ20-9/3/2011,9/4/2011
OKC-11/16/13
SEA-12/6/13
TUL-10/8/14
As far as financing vs. buying, most here have it right. ONLY if you can get the lowest rate possible (in this case, 0%) do you considering financing. And to whomever suggested a credit union, kudos to you. That is exactly the way to do it, if you can.
This is such a hoax.
If you do a 0% interest loan, the interest is embedded in the price of the car. No bank is going to lend anyone money for 5 years without making anything on it. Think about what I just said, and how much sense it makes. If you buy a $20k car with "0%," there is about $3k-$4k interest in there.
Don't believe me? Go negotiate the price down (especially if there is a rebate) on the car, saying you have your own bank already (it doesn't matter why, tell them you have a relative that works at this other bank and you trust them), or that you have the cash to pay outright. Then at the end, tell them you changed your mind & you want zero percent interest. They won't let you do it; they'll tell you that you have to give up the rebate or they'll make up some nonsensical lie about how they can't finance you at that price.
exactly.
you go for the deal, you are paying full sticker price more than likely. you pay cash, you can get the car probably for thousands cheaper. i know when we bought our car, we paid cash and that was a HUGE bargaining point for getting the absolute BEST price on it. i know of someone who bought the exact same car, same dealer...and paid 2k more......simply b/c they didn't bargain. with a loan there really Is no bargaining, so truly....from a financial standpoint if you are going to buy, it's always best to pay in full.
and...
absolutely forget that. we just by chance went at the end of the month and it DEFINITELY made a BIG difference in getting the price we wanted to pay. as to the 0% financing, fanch explained it beautifully above. ain't nutthin' in this world for 'free.'
Let's just breathe...
I am myself like you somehow
It's such a hoax. If a car salesman's lips are moving, he/she is probably lying.
the car I want is 18k.
My trade in is only worth $6500 and I could tell them I only have 10k to work with.. I'm sure they cut the price if I approached it that way.
Go 50/50 I reckon if you can...
take your time looking at the car. drag out talking to the salesman.
make an offer like 10 minutes before they close. say that you are thinking about going to dealer down the road on monday or that if you don't buy today you may postpone buying a car. have your wife babble about it and distract the process.
If you make them a low ball offer at that point, they are mor elikely to accept it to make the sale before closing.
Worked for us. Paid 18k for a car they wanted $23k for.
+1 to buying at end of month, or financial year.
+1,000,000 to buying a 2 year old car. biggest hit in depreciation has been taken out by then.
if you have the money up front, it will always make sense to pay cash. problem is if you are debating in your head about whether to use your savings you probably shouldn't esp. if it has taken time to build up and you plan on using it in 2 years. only pay cash if you don't have other plans for that money.
don't give these fuckers an inch. they are one level above racketeers.
As far as pre-owned, always keep in mind that the markup at dealerships (especially ones that primarily sell new, but have a pre-owned lot) is ASTRONOMICAL! Like, insane. Do your Kelly's Blue Book research on pre-owned, and always make sure to get a Carfax (or similar) report on the vehicle.
I've always wondered why people fall for the 0% ting.
The best way to save money on a car is to buy one that is about 3 years old and pay cash.
When I own a car, I make a "payment" of a couple hundred bucks to my savings account every month and at the end of a few years, I have the cash to buy the next one.
...are those who've helped us.
Right 'round the corner could be bigger than ourselves.
Another good thing to do if you are buying new, is go on a Sunday when they are closed and find a model and colour on the lot you like. Then when you go in and talk say you want a different colour they don't have.When the guy offers you the colour you saw the Sunday before hand tell him you will only take it if he gives it to you at a discount. They are way more motivated to move cars that are already on the lot compared to ones they have to order in. That happened to me by chance when I got my Fit and I got a decent amount of money off and free keyless entry.
what this guy said.
No - that's pretty much a hoax too. Doesn't it seem like an illogical concept to go into debt to prove you can go into debt so you can borrow more money. The point is, you shouldn't borrow money in the first place so why worry about your credit score?
...are those who've helped us.
Right 'round the corner could be bigger than ourselves.
I have a 2008. I really like it, there are a few things that bug me about it (the seats dont really go back far enough, and the back seat headrests are really high meaning they block a lot of what you see from the rear view mirror and you have to take them off to fold the seats down). But I saw a 2009 when I was getting mine serviced a few weeks ago and it looks like they fixed those problems and added a bunch of new features.
Also, have you used the back seats in all of their configurations? How easy/hard are they to maneuver? Is the trunk space alone enough to do a full week's grocery trip, or do you need to use the backseat too? It seems like it would be a good car if you have a kid (which we're planning in the near future), but if I have to fold a seat down just to get groceries home, I'm not so sure it makes that much sense, you know?