Posted on 04/01/2014 7:14:21 AM PDT by TurboZamboni
I'm trying to steer him away from financing a new car.(Trying to get him to buy used and pay cash)
I know my chances are weak, but maybe reading advice from people other than dad my have better odds. He banks at USAA, FWIW.
“The used car market right now is such that a car that’s a couple years old costs almost the same as a new one. I just bought a new car and was amazed at how a 2 year old Camry sells for the same as a new one. And they wanted more for low mileage 2 year old F-150’s than Ford is selling them new! (Are the auto manufacturers manipulating the used car market to steer people towards buying new?? Perhaps.”
Working in the car business for 22 years now. Used toyota’s have always been high. Hondas too. It’s a pain in the ass to wait on someone on the used car lot looking for a “late model, low mile Camry or Corolla” or most especially a Tacoma. They always want to save $10,000 bucks on a two year old vehicle. When you tell them the price it’s “you’re crazy!” Or, “I can buy a new one for that” Well, almost.
When GM and Dodge closed all those stores many didn’t go out of business. They kept the doors open and sell used cars. There’s a lot more competition for the vehicles wholesale and consequently prices go up. Supply and demand.
So anyway, please go easy on the poor salesmen. It ain’t my fault!
BTW the new Corolla is a great car. Thinking about leasing a new Corolla S myself.
He’s still a kid. Feel free to sweeten his deal. If he buys a used honda, you will help him with X. Not a bribe, a guide. He’s still learning. Even: you’d pay cash for it and he can pay you x per month, etc.
Also, show him how he can find the right year used honda, and sell it in three years for basically what he bought. And show him how once he drives his new car off the lot, its worth has dropped by $x. And keeps dropping.
If he is trying to look cool for his friends, ask him if there are other ways for him to achieve that without the Walter white car.
Good luck.... At least he is in the service; he will mature faster than most.
Some quick points:
- Don’t fall for the 0% interest on new cars. Ask what the price would be if you paid cash and I guarantee it will be lower - they’re in the business to make money, not give it away.
- Don’t lease - again, they’re in business to make money.
- New cars lose part of their value the minute you drive them off the lot.
- If you borrow the money to buy a car, you’ll pay up to 30% more by the time it’s paid off.
- As my Dad taught me, you can’t make money trading cars.
My advice to my son and daughter (and they followed it) was to buy something dependable, that you can afford initially (and it might not be much to look at), drive it until it won’t go, and save the amount you would have paid to borrow the money to be able to pay cash for your next car, which, hopefully, will be a step up.
My advice would be to buy a dependable car or pickup truck.Forget sporty coups.if your Stateside for awhile like I was fortunate to be you’ll need it to transport your property between stations.
I would purchase a Subaru outback Station wagon or F150 pickup.
With either one you can’t go wrong.
With the Subaru you even get great acceleration with it.
Thanks for that.
What model cars were available in 1069?=
Well, the iron chariot of course. I corrected that twice, I thought.
That's actually quite common these days. My wife gets a new vehicle when hers flips 100,000 miles. She's the one hauling the kids all over the place so I want something reliable for her.
Me, I find something 2-4 years old that's relatively low mileage for its year and pay CASH for it. Last time I did that, I purchased a three year old GMC Envoy Denali that originally sold for just over $38,000 in 2003 for $17,000 in June of 2006. It had 31,000 miles on it.
Best advice is to find a 2-4 year old vehicle and pay CASH. Never Ever pay interest. Period.
I would recommend a Toyota or Honda, they may be boring, but when you turn the key they start. In addition they get you from A to B and back. I would also suggest something that got good mileage, when Dear Leader took over he said he did not mind higher gas prices and we have been there ever since. Going forward I can’t see it getting much cheaper anytime soon.
Lastly, some have spoken of USAA, I would encourage him to check out Navy Federal Credit Union(NFCU), I have been associated with both of these organizations for a long time and have nothing but good things to say about them.
A three year old Norman Conquest is a good choice.
True- teach , don’t preach.
1.99% at USAA for my wife’s and I’s Sienna. Make sure the kid gets a pickup, SUV, etc for resale value. NO SPORTS CARS....useless if new, insurance kills you, and bad resale value. I had to council my young soldiers into getting vans and trucks for their young families. I told the single guys to even buy trucks or SUVS....used preferably and use USAA for auto insurance.
Being in the Military, you should calculate your cost per mile including the finance charges.
In most cases, you will find out that you could rent a car cheaper than buy even a used car.
I was in the Navy, underway 295 days a year, make sure to calculate the cost per mile and cost per day based only on the days you might actually be able to use the car.
Also, add in the cost of hauling/storage during moves and such.
Do the math, it is a shame to loose 30% of the value just driving the car off the lot, make sure you include the loss in equity in your mat as well for the cost per day and the cost per mile for the first year.
Know of any good auto repair places that sell gift cards that can be used for services only?
“Insurance on a car of lesser value (used) should be less along with lower annual plate fees and less sales tax.”
True. But only up to a point. When cars get “old enough” the cost of replacement parts begins to rise. Popular cars of those model years become popular with the chop shops, so insurance costs rise on account of the frequency of theft and collision repair costs.
I’m 58 and never buy new anymore.
Last car I bought saved me 10k by getting 2 years old with 8k miles.
First cars always get banged up.
Agreed....Toyota.
Lets run through the math:
Buy a car - on terms, low down payment.
12,000 is your purchase price. 2-5% interest for 5 years.
Your first mile, its worth 6-7,000 dollars immediately losing value.
You then spend 2-300 per month + insurance (100-200) + gas.
so aprox $500 actual cost per month.
500 x 72 months.
You paid $36,000 out of pocket for something that will be worth 6000 dollars.
Any guess why Joes end up broke and in debt when they finish their service?
Buy an old junker car with four wheels, a roof and runs ok. Save the money for a few months you can find good cheap cars for cash in the $3000 range. It’ll mean lots of walking on post for the first few months, but in then end your car will be an asset to you by saving you money.
Get a hobby, stay busy...set some goals and focus on them.
You fly a Minnesota flag and are asking about Texas rules, etc. I assume your son
is in Texas you are in MN.
One suggestion if you or him have any contacts with anyone in the auto business then
maybe a trip or two to some of the auctions will get you a car at a reduced price.
I know rental agencies, Ford, GMAC, Chrysler, etc. sell a lot of their inventory at
auctions. Just a thought.
Yes,I’m in MN and he’s in TX.
I have no relatives in the business.
Hertz Car Sales sells low mileage (35,000-50,000) Toyotas. You have to park yourself at one of their sales lots daily and grab what you want as it comes in. If not the dealers show up mid-day and buy them all, increase the price by $3000-$5000 and sell them on their lots.
Have him put down a sizeable down payment and Hertz will finance the rest at under 3%. It is a good way to build his credit rating so he can eventually get a home loan. Credit history with a car loan is looked upon more favourably by the banks than credit card debt. Once a person builds a decent credit rating then it is best to pay cash or take advantage of 0% interest.
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