Whether it's your first Bonnaroo or you’re a music festival veteran, we welcome you to Inforoo.
Here you'll find info about artists, rumors, camping tips, and the infamous Roo Clues. Have a look around then create an account and join in the fun. See you at Bonnaroo!!
I believe the time has come to start looking for a new-to-me car. My current car, a trusty 1997 Honda Accord, that I've had for 10 years has 212,000+ miles and has really served me well. But, I'm nervously waiting for the final blow to occur. I decided a few months ago not to pump any more money into getting this car fixed since it has really lasted much longer than it should have. (I say that because as a broke college student for 5 of those ownership years, and then as a broke working gal for the other 5, I really haven't taken as good as care of it as I should have)
So, it's time to buckle down and start looking for a car though it will still be a few months before I can get one. My problem: I have absolutely no idea how the car loan process works, as I bought my last car with cash.
Few, if any, of my friends have experience with car loans, as most have had their parents work it out for them... even as adults! I have no one in my family to turn to, so I turn to the next best thing: my Inforoo family! Any help or advice you guys can offer would be great, either here in this thread or by PM.
I'm pretty nervous about this, since it would be my first major purchase on a loan. I know people take out loans every day, but most people probably don't obsess over every single penny like I do. My honest-to-goodness biggest fear in life is not being able to pay my bills. Yep, I'm a weirdo.
Anyway, below is my current situation. I'm going into this pretty blind and not knowing very much about cars or loans. (I know I should take someone with me that knows something, but, as I've said before, none of my friends seem to know anything.)
1. I know how much I can afford in monthly payments, and I plan to put about $3000 down. But what's my first step: Do I find a car and then go to the bank to see how much they will give me? Or do I go to the bank first and then find a car that fits within their loan offer?
2. I don't even know what is average for a monthly car payment! Is anyone comfortable enough to PM me what they pay? I know that's a personal inquiry, so if you aren't comfortable with disclosing that info to me, it's ok.
3. I have pretty good credit. However, I do have unsecured credit card debt that I'm currently working to pay down, so I'm not sure if that will affect how much of a loan I can get or if it will ridiculously up my interest rate. Any ideas? 4. I've heard that car salesmen can sniff out people that don't know what they are doing, and I'm scared of being "had". I'm a pretty confident person in general but being in a situation where I know NOTHING makes me nervous. I want to make sure I'm getting a fair deal. What's the deal on negotiating with current Blue Book prices? Ok or No?
Ok, that's all I've got for now, but I might have more questions before it's all over. Thank you in advance!
First off I would find a credit union to join it will be a lot cheaper. I know of one, but can not remember the name right now, but it helped a friend go from 12% to 6% interest. The bank is going to make a loan offer based on a car so pick that out first.
Ok, we have a credit union here at work... I will look into their membership stuff.
So pick out the car first... then go to the bank. But what if the bank won't give me enough to cover the car I want? Just go back to square one?
I would go ask I only ever bought one from a bank once. I already had it picked out then. Of course you know for 4k or so you should be able to find a good used one these days. I helped my GF to get a 2002 mitsubishi diamante with 60k for 3500 right before Christmas.
Definitely go through the credit union. I just bought my first new car in twelve years back in September and I wne through my credit union and got a 4.24% interest rate.
Also, go to the credit union first and get pre-approved for the loan. They will tell you how much they will loan you so when you go to shop, you will know your price range.
Credit unions are usually easier to deal with than banks and finance companies.
My CU gave me a check for the price of the car before I even had the title.
Also, go to the credit union first and get pre-approved for the loan. They will tell you how much they will loan you so when you go to shop, you will know your price range.
Nice! This is what want to happen. It makes me nervous to car shop without knowing how much I can spend.
And that's a very nice interest rate! I don't expect to get one that low, but it's still encouraging.
Also, go to the credit union first and get pre-approved for the loan. They will tell you how much they will loan you so when you go to shop, you will know your price range.
Nice! This is what want to happen. It makes me nervous to car shop without knowing how much I can spend.
And that's a very nice interest rate! I don't expect to get one that low, but it's still encouraging.
Your intrest rate will depend on your FICO score. Usually there is a formula and it goes strictly by that score. Its usually the same for everyone.
so the better your credit report, the lower your rate...
First, credit unions are awesome. You should definitely get an account with one even if you don't use it to buy your car. There are so many local ones out there.
That said, I also felt overwhelmed when I went to buy my car last year (a 2009 Hyundai Elantra that I LOVE LOVE LOVE) and just went with the dealership. I did my homework ahead of time and knew that with so much down and at such an interest rate, I would pay approximately X amount. There are online calculators that help you get a rough idea of this. I overestimated a bit and worked it into my budget (I also keep track of every single penny and balance my checkbook several times a week) and so knew what I could afford.
And that's how I came down to the Elantra - I was able to get all the fancy upgrades I wanted (sunroof, XM, spoiler, cruise control - so key on the trip to Roo!) for less than the price of the basic version of other cars I was looking at (hello Mazda3). I knew I could go with a used car, but I just really wanted brand new.
Anyway. I was still nervous about negotiations and such. I looked up local dealerships in Consumers Checkbook (might just be a DC thing) and yelp and anywhere else I could find until I found one that got favorable reviews for being good to deal with and are a "no haggle" dealership. You pay a reasonable markup and then only have to fight over the interest rate and monthly payments. Though if you're getting a loan from an outside source, then it's basically like you're dealing with cash once you get to the dealership.
I was also able to pick out my car online, which helped me decide between two dealerships that otherwise were running about even (my goal was to make this as simple as possible so I didn't want to wait for them to transfer one). I test drove the car, loved it, waited a week or so and that same car was still available so that's the one I bought.
I had read something about how you can do it all over the phone and have them deliver the car so you sign the papers at home. Seriously? Especially since I was buying my car the same day as my house and the only person who could drive me to the dealership was my mom who doesn't like the Beltway - the whole thing was freaking me out a bit and I really didn't want to spend hours in the dealership. And then I got a salesman who I really liked and it was all so easy. He did first offer a high interest rate, but since I knew my credit score was good, I pushed back and he called back with the # I was expecting. So I did have to wait, probably longer than if I had actually gone there, but the waiting was done at home and I could unpack and clean my new house and generally get on with my life. And for me, I find it a lot easier to be demanding over the phone than in person.
So that's my super long story. To sum up: go to a credit union. Don't get hung up on brand names. And find a no-haggle dealership.
Thanks for the advice, dcbee! I'm planning on visiting the credit union here at work on Friday.
I spent my lunch break looking up my credit reports. I feel a bit better now that I know what's on there. Of course, I have no idea what is considered a good interest rate with just my credit reports... because I don't know my FICO score! I found a website that can estimate it for you based on your credit reports, and I did that, but it was still a ballpark figure.
Anyone around here a loan officer or anything similar???
At the credit union you will be given an intrest rate based strictly on your FICO, no negotiations are possible (at least at my credit union, ascend federal credit union)
At mine, all you have to do have a FICO of 620 or better to be aprroved, but the higher the score, the better the rate.
anything below 620 will not be approved for the loan.
That is my credit union that I do business at, yours may be different, but I think they are all pretty similar.
Ok... I will find out the info when I talk to the credit union. They have some rates listed on their site. For a used car (1-3 years old), rates start at 7.94% .... Good or no? I'm guessing it's probably middle of the road...
dcbee, I might consider springing for my FICO score if it sounds like the interest rates I'm being quoted are outrageous. I know my rate won't be great because of my outstanding credits (balances on my credit cards).
I'm also pretty sure that there's talk about making FICO scores free once a year the way credit scores are now. Looking for that article now.
edit: found it! though the proposal is that if you're denied credit or a job you can see your FICO score for free. It's not that it'll be free for just anyone. Those of us with good credit still have to pay for our score.
After sleeping on this and talking it over, I'm feeling somewhat better about applying for a loan. I was really anxious borderline freaking out yesterday for some odd reason....probably because that's A LOT of money to me.
Thanks to everyone that's replied with their advice. If anyone else has any wisdom to add, I'd love to hear it!
here is a site that you can look up one of your scores for free.... its an affiliate of my company but its secure, free, and a pretty cool site. This might help with knowing the credit score and also helping with general money management....
here is a site that you can look up one of your scores for free.... its an affiliate of my company but its secure, free, and a pretty cool site. This might help with knowing the credit score and also helping with general money management....
1st since you're in Nashville be sure and get a CARFAX if you are buying used as LOTS of flood damaged cars will be on the market. I personally would be a bit scared buying used right now.
2nd check with local dealers about new car deals. Deals usually start at the 1st of each month. The last few cars I bought I got at 0% interest loans thru the dealer. US car companies are still a bit desperate and they may offer low interest loans so check the website each month.
3rd - go online to dealers and get the sticker price and estimated payment so you have an idea what you want and can act like an informed consumer (also you can see what's in stock at each site before you go.) Also go to sites that show what the dealer actually paid so you have an idea what to negotiate. Be sure and search for special deals each company is having such as 0% financing and rebates.
4th compare dealer financing rates with a credit union (if you can join one) and negotiate back and forth for a lower rate. A CU is best if the rates are similar.
Example - a Chevy Aveo/Cobalt is about $15000 and you get either $2500 off or financing at between 0-3 %.
With $3000 down your monthly payments would be around $350/mo if financed thru GMAC. If you get CU financing at a low rate and take the additional $2500 off the payment could be lower.
CARMAX is also a decent place to get a good used car without worrying about flood damage as they provide a CARFAX report. They may be a bit more expensive than some but in these post-flood times, it is probably worth it.
Also a car dealer or credit union should tell you your credit score when they look up financing terms as they will be looking it up anyway.
Hope this helps
Last Edit: Jun 22, 2010 9:16:09 GMT -5 by troo - Back to Top
JHOinTN
Bleary-Eyed Bonnawook Resident Prince Licker
Dearly Beloved, We are Gathered Here Today to Get Through This Thing Called Life
I nominate Troo and Vector Viking to go car shopping with me
But seriously, thanks for the advice, everyone! Now that I've found out my credit score, and discovered that it's not as bad as I was thinking, I'm feeling much, much better.
Post by questionablesanity on Jun 22, 2010 10:56:27 GMT -5
Carfax can be nearly worthless since not all body shops and insurance companies report to carfax (so says my friend who works at a body shop). But it is still a good tool. I would recommend checking Edmunds.com, NADA, KBB, etc... Edmunds, especially. It will have reviews in addition to blue book values and prices that other people have paid for the same car.
I've bought around 15 cars in my lifetime. Some used, some new. Occasionally the dealer can get you better financing if you're buying new. I prefer to buy off of individuals because dealers always want thousands more. Private party value is always much, much less. If I buy off of an individual, I always take the car to a body shop and a mechanic to have it checked out. Some spots will do this check for free, others for a nominal charge. It's worth it for piece of mind.
If you buy from a dealer, they'll offer you an extended warranty. Sometimes it's worth it but I've been hosed on it once. The salesman told me after I bought the warranty that the car was covered bumper to bumper until 100k miles. The first time I needed a repair, the warranty company haggled about every item and every man hour charged. I ended up paying more than they did. My brother just bought a newer camry and got an extended warranty for $900 which is a steal.
Tips when you go in to the dealer: 1. Be prepared. Know the bluebook value before you talk to a salesman. 2. Know how much you can spend but never tell the salesman what you want your monthly payment to be. They always try to stick you with 6-7 year loans but still be within your monthly payment. Then you'll get upside down on your loan. 3. Test drive the car for at least 30 minutes. If they have a problem with that, go somewhere else. 4. Don't be afraid to walk out of a negotiation if you're getting screwed. Dealers can always come around $2k off the sticker or more if it's new. 5. Don't let a salesman know how interested you are in the car. If they know that you really, really want it, they won't haggle the price as much. Be flexible. 6. Do not buy the first car that you want. Especially since you aren't super pressed for time. 7. If you get financing through the dealer, look at all of the paperwork closely. They always try to charge paperwork fees. It's always small amounts, say around $50 but I've never once paid them. 8. Always buy the GAP insurance. It's usually a few hundred bucks. If you happen to get upside down on your car loan, then total your car, you'll owe the bank the difference. With the GAP insurance, it pays the difference for you. You never know what will happen with the value of your car. I bought a Mitsu a few years back for my son's mom for an excellent price ($2k below private party value). Two years later, when I tried to sell it, I was upside down $8k. Now imagine if I had totaled that car. I would have still had to pay the $8k off and not had a car.
Car loans are nothing, just wait until you buy a house.
I'm sure that I'm forgetting something. FB me if you have any questions. I think you have my number as well.
A Thieve's Parade 2/24 Conspirator 2/26 Kevin Smith 3/11 Keller 3/17 Papadosio 3/18 JJ Grey 3/25 Bela Fleck/Edgar Meyer 3/26 Toubab Krewe 3/27 O'Death 4/11 Budos Band 4/22 EOTO 4/28 Summer Camp 5/6-29 All Good
JHOinTN
Bleary-Eyed Bonnawook Resident Prince Licker
Dearly Beloved, We are Gathered Here Today to Get Through This Thing Called Life
Ok... so troo and QS have both mentioned buying new. I'm pretty set on buying used (I can't handle the thought of the car losing so much value), but now you guys have my reconsidering. Anyone have insight on the pros and cons of buying new?
BTW, if I did buy new, I would literally drive the car until it exploded.
Just bought my first car all by myself (Woo! I'm an adult!) and there's a lot of good advice here. My experience was actually quite different because I was forced to buy a new car since a nice man in a Mercedes decided to total my dinky yet powerful little Ford Focus. I went to the dealership to finance a new (used) car and I think I got really lucky. My credit isn't great, but one of my reports was good so they used that one and since I was putting 4k down on it they financed it to me with an interest rate of around 6.5%. For someone like me with a bad overall credit history, I got a seriously good deal. They financed it to me for 60 months and my payments are super low. All of this was after they knocked off about 500 bucks from the price that was already a little below Kelly Blue Book.
As for buying new, right now you can get 2010 models for cheap because people are putting out 2011 models. Technically the car is "used" but it's actually brand new. My car had never been titled. It'd been used around the lot for people to use while they were getting their cars serviced. There's nothing wrong with it and it has all the new stuff you'd expect from a 2009 and more. It'd just been hanging around the lot for a long time and they wanted to be rid of it. I think it was also the color of it that people didn't like so they often passed on the car I bought which was a 2009 with 13k miles on it for the same model and year in a different color with three times the mileage. People are dumb. Don't be people.
I always keep cars untill the wheels fall off (and then push them for about 50,000 miles ) so new is not as bad because I usually get to drive my cars for about 8-10 years after they are paid off. I also buy last years model which is still sitting around and can be gotten for well below the sticker and always get 0% financing or near that. But I always go for the car no one wants, for example my current truck has no power anything, just an AM/FM radio, no cruise control, etc. so I got it very cheap.
Used cars are better as far as price but, as I said earlier, be very careful in these post-flood times and take it to a mechanic you trust to look it over. In these economically depressed times there are some deals out there. CAR FAX will only tell you if the car has been totalled/salvaged due to flood damage/accident but it's still a good $35 to spend.
There is a risk in buying used which you definitely pay to avoid when buying new as most cars come with 100,000 warranties today. Just don't hurry and compare options and you'll likely be happy with what you get.
One thing I always do is when I'm sure I've found the car I want I walk away for one day and think it over. And never be afraid to walk away if you have any qualms. You can always come back and often get a better price.
Also remember that Federal laws allows you 72 hours to return the car for any reason and cancel the deal. I know this applies to new cars and I think also used from a dealer or CarMax but not an individual obviously.
Last Edit: Jun 23, 2010 8:33:44 GMT -5 by troo - Back to Top
JHOinTN
Bleary-Eyed Bonnawook Resident Prince Licker
Dearly Beloved, We are Gathered Here Today to Get Through This Thing Called Life
Thanks, troo! I will probably be sticking with used because my frugal nature has a hard time accepting the depreciation that comes with a new car. I do intend on keeping whatever car I choose until the wheels fall off, so that's why I intend on making my decision carefully.
One thing I always do is when I'm sure I've found the car I want I walk away for one day and think it over.
I seriously do this for almost every purchase I make: clothes, electronics, etc. So it would be a no-brainer for me to do it with a car! My motto is, if you have reservations, think about it. If you decide to get it, don't regret your decision. If you go back and get it and it's not there anymore, than it probably wasn't meant to be.
Also remember that Federal laws allows you 72 hours to return the car for any reason and cancel the deal. I know this applies to new cars and I think also used from a dealer or CarMax but not an individual obviously.
Wow, I did not know this! I was curious how I was going to buy a car and then take it to a mechanic... and if they found something wrong with it, how I was going to go back to the dealer and say "yeah, nevermind". Makes sense now.
Keep in mind.... if you are going to litereally drive the car into the ground nd you know that up front hen the immidiete depreciation is only a mental block. It will never matter what your car is worth until you sell it!
Post by dreamingtree on Jun 23, 2010 9:43:05 GMT -5
I agree with all the great advice, especially the credit union part. I personally would not ever buy a new car, but that is just me I just feel like you can get some great deals on nearly new cars and not need to pay so much. My Honda Element is a 2004 and I paid $8600 for it last year. I plan on driving it until it dies which will hopefully be a long time from now.
Good luck J and if you need a car shopping partner I would be happy to come with you
Keep in mind.... if you are going to litereally drive the car into the ground nd you know that up front hen the immidiete depreciation is only a mental block. It will never matter what your car is worth until you sell it!
Yeah, but what if the unexpected happens, like a wreck?
and has really served me well. But, I'm nervously waiting for the final blow to occur. I decided a few months ago not to pump any more money into getting this car fixed since it has really lasted much longer than it should have. (I say that because as a broke college student for 5 of those ownership years, and then as a broke working gal for the other 5, I really haven't taken as good as care of it as I should have)
My honest-to-goodness biggest fear in life is not being able to pay my bills. Yep, I'm a weirdo.
I just feel like you can get some great deals on nearly new cars and not need to pay so much. My Honda Element is a 2004 and I paid $8600 for it last year. I plan on driving it until it dies which will hopefully be a long time from now.