I'm going to have to buy a car, used or new, for the first time soon and I need some help. First, which is the better option, buying a brand new car or a slightly older car with like <30k miles? My budget is around $20k, what is the best car to buy in this price range? I'm thinking civic but i like to hear your opinions. Finally, how you do guys haggle? what is different between Manufacture suggested retail price (MSRP), the invoice, and the sticker price on the car's window? I went on edmuns.com and they have something call the True market value or TMV, can i use this to help me when i talk to the dealer people?
Buying a slightly used car makes more economical sense, but personally I like to buy new. Do what you think is best for you. Edmund's should have plenty of advice on buying cars...I suggest reading it thoroughly...know the ins and outs of the process so you don't get surprised. TMV definitely helps when purchasing a car from a dealer. Don't pay attention to MSRP...if you buy a car at that price you've been suckered. Pay more attention to invoice. Know what you want before you step foot in a dealership..down to the model and options. And when you are ready to buy, get a price quote from Edmunds from various dealers and use the internet sales manager to make your deal. Basically use price quotes and play the dealerships against each other. I'd also suggest having your financing in order before heading to the dealer...but if you have to use dealer financing, ask questions. If you don't know something, ask. If they're going too fast, ask. Don't sign anything unless you know what you're signing. And be prepared to walk out the door if you don't like the deal you're getting.
Repped for excellent advices. Keep it coming guys, I want to be as prepared as possible so I can get a good deal.
Quoted for truth. I usually buy new, just because I don't like inheriting other people's problems. Watch these videos: http://www.youtube.com/watch?v=HWuSTCj3Y4E http://www.youtube.com/watch?v=h_j5uzMTuNU Stay away from the four-square carp. Don't fall for the monthly payment junk. Know your financing before you come in and never, NEVER tell them how much you want to pay per month, because I guarantee, they'll come in about $50-$100 over your monthly maximum. Just remember: it ain't "show friends", it's "show business". You don't owe the car dealership anything. Quite the opposite: it's up to them to show that they deserve your hard earned money. It is a buyer's market right now, so leverage that to your advantage. As for what car to buy, my wife and I purchased a brand-new, tricked out Mazda 6 for about $22k. You should be able to get a really nice, new car for $20k.
Most millionaires buy 2yr old used cars. Because it makes better financial sense & many still have time left on the manufacturer warranties. You automatically lose 20% of your investment when you leave the lot - Cars are the largest item people buy that go DOWN in value. Buy the car after someone else has taken the hit.
I don't always agree with the "buy used" because a lot of the time used cars are only $2000-3000 lower (with 30,000 miles) than a brand new car. Ofcourse this is depending on the car and situation, but that was the "standard" that I saw when looking for ~$25,000 cars. If you have an AMEX card, take a look at : http://amexnetwork.zag.com/main.html I think Costco has a similar purchase program, plus you can try bargaining on top of that. If you go with a brand new car, it's going to be hard to have a bank beat the APR that the dealer can offer if you have good credit, but doesn't hurt to look. Know the absolute max price you want to pay (use Edmunds and other sites to help you calculate that, but aim for around the invoice), then take the target interest rate, and the payment term (48, 60, 72 months) and calculate the monthly payment. Then when the dealer tries to push you by the monthly payment, say the 10 percent less than what you calculated for the term that you wanted (IE, "I want to pay $300 on a 48 month loan"). That way it gets around their BS of trying the make the payment be manageable. But make sure you stick to it. Ofcourse reasearch, research, research before buying the car. Before you go to the dealer also check for rebates and dealer rebates, with either of these you should be able to get under invoice. The only reason to go to the dealer is to validate that you like the car(s), not to discover information about them. I haven't tried to deal with dealers via their internet sales, but some people have some good luck with it.
I know personally one thing that makes me buy new over used is the apr. When I was looking for a car a couple years back, if I bought new, I could get an apr around 3% opposed to 6%< with used. When u do the math, even if you are buying a used car that is cheaper, you end of paying more in the end with interest.
Questions: 1. Have you ever made a big purchase before? Like a home or a car? If not: 2. How good is your credit? 700 or higher? How consistent are you at paying your credit cards or loans? I recently purchased my first car a few months ago and it can be quite a headache. These are the steps I would take: 1. Check your credit score. Check all three credit companies and make sure you know all 3 scores (or at least close to it) 2. If this is your very first "big" purchase (seems like it is), and your credit score is lower than, say, a 690, I wouldn't get my hopes up for any 0% financing deals. Especially if you don't have a consistent history of paying off bills and what not. 3. Get your financials in order. How much can you REALISTICALLY pay a month for the car? How much can you put down for the car? Be honest with yourself and hold yourself to it (e.g. if you can only pay 300 a month, don't think "$50 more a month" isn't going to hurt because you never know). 4. Find the car that you really want, and immediately search for a used one. Sometimes you can find a diamond in the rough and that will save you thousands. The car I purchased was a 2010 model and it was slightly used (5000 miles from 2-3 months driving by the car exec) but it was about $4,000 under the price for the new one. My car still has the original factory warranty and I bought an extended warranty for the car. 5. If you MUST buy a new car (nothing wrong with that at all! ), check: http://autos.yahoo.com http://www.edmunds.com http://www.truecar.com So you can get a gauge on what the going price is for your car. There's another alternative to haggling in that, if you're a Costco member, you can actually get a better deal with them (though I forgot the website you would have to go through). Truecar.com does a fairly decent job of breaking down the pricing for you. 6. If you don't think you're going to keep this car for more than 4-5 years, TMAC3 is right in that you might consider doing a lease option instead. BUT beware: Dealerships will ask for you to put $ down and those kinds of deals aren't deals at all. Of course you're rarely going to run into a 0%/0 down deal that you qualify for but there's no point of putting thousands of dollars down on a LEASE and not have equity behind it when you can put that same amount of money on a used or new car and have that equity under your name.
read this www.carbuyingtips.com listen to 610 tomorrow and ask The Car Guy Jerry Reynolds. His show is on in the early afternoon
If you buy used, make sure you check the carfax history. It's definitely worth it. The internet has completely changed car buying. You basically have all the power now. You KNOW exactly how much the car is worth and you also know how much you want to spend. Stick to that. Be prepared to walk out the door. Focus on the total cost. Agree with the others--don't tell them how much you want to pay per month, they can easily fix your monthly payment to what you want, but you end up with a higher interest rate, and/or longer finance terms. Don't ever finance for more than 5 years. One thing to remember is that you should realize when you have a good deal. Don't make a ridiculously low offer. Those guys are trying to make a living too, so don't be a jerk when you negotiate. Be polite, but firm. If you buy new you can usually get an on-line quote from several dealers and then get them to fight amongst themselves for your business, all without leaving your computer! Don't buy all the extra crap they'll offer. I'd only consider an extended warranty if you're buying a luxury car that tends to need more TLC (like a 4-5 year old BMW, etc.). NEVER buy a 3rd party extended warrranty. They are worthless. If you do get an extended warranty it should be from whichever company made the car. Most of the time you'll spend more on an extended warranty than you would on repairs--but it can give you peace of mind. Finally, certified pre-owned is a great way to go if you buy used. CPO saves you the hassle of having to get an independent mechanic look over your car before you buy it (yes, you have to do this if you buy a used car), plus you get an extended warranty--though usually it has more restrictions than the original warranty. Good luck and have fun!
