Buying a car...

I could use some advice! i'm looking to buy a car at the end of the year. i want something newer, but not necessarily new, probably in the 10k-15k range.

what i'm not sure about is financing and all that. i see all these commercials for $0 down, $0 APR, so on and so forth. and i don't know what i'm doing at all!

what do you guys think is best? is it better to put as much money down as possible? longer loan smaller payment? shorter loan higher payment?

i'm at a loss. if you were gonna buy a $15k car, how much would you put down?

any advice would be much appreciated!

Well, if you are able to get a 0% interest rate for the entire term of the loan, you can just pick a term that in affordable to you.  If you are going to accrue interest, choose the lowest term you can possibly afford.  Interest adds up and should be avoided.

As far as a down payment, it is best to put down as much as possible. 

I am a firm believer that debt is a BAD thing.  If I can't pay for something in cash, I simply don't get it.  I have a student loan and a mortgage (my only two exceptions to this rule), but am hoping to pay both off well before the life of the original loans.  God willing, I'll never have to finance anything again. 

Check out Dave Ramsey, he has some great financial advice out there.  Best of luck!

My first advice is to buy a car outright, but even I wasn't able to do that. :)

Personally I distrust getting financing through the dealership.  I have a very good credit union and I got the loan through them- I just felt I could trust them more.  Still, I put down as much as I possibly could because I didn't have to worry about a budget at the time and I wanted to give them the least possible interest.  But be sure to figure out how much you can budget for car payments per month and then look at the different loans and their different payments and see what works best for you.  I'm sure there are some online calculators out there that can help you figure it out.

I bought a $16k car, put $8k down and recieved a loan for around $10k.  That means for me $2,000 of what I pay is just pure interest.

Original Post by jules817:

if you were gonna buy a $15k car, how much would you put down?

$15K.

If you have to get a loan, I'd get one that lasts a long time and has a low monthly payment, and then put way more than the monthly payment towards it every month.  Most car loans don't have a penalty for paying it off early, so get a loan that you could afford even if some emergency came up and you didn't have the usual cash that month, but pay it of as if the monthly payments were way higher.

If hubby and I were going to buy a $15K car, we would put $15K down.

Of course, not everyone can do that - because of savings, we have had the luxury of paying for our vehicles in full so the only debt we have is our mortgage.

However, without that option, I would pick the most affordable plan that pays it off in the shortest amount of time.

If you can get 0% interest for the life of the loan that is the way to go.  Otherwise your personal situation will determine what is best for you, it's not a one size fits all kind of thing but what you want is the lowest interest rate possible and the shortest term possible that results in an affordable payment.  Put as much money down as you can but consider your full financial situation when deciding how much you can afford.  It is not necessarily in your best interest to wipe out your savings.

i would say it depends how stable your circumstances are.  if you're planning to stay put in your job, home, etc. (and if, as tom says, you can get 0% for the duration), a small down payment makes sense (especially if you have high-interests debts and can put extra cash there instead). 

but if you're thinking about changing jobs, moving, going back to school, etc., or if your job isn't 100% stable, i'd go with the larger down payment and smaller debt.

and just to get in a plug, i adore my mazda 3.  it's an '05, i bought it new, and i haven't had a single issue with it in over 60,000 kms, highway and city, winter and summer.  including some pretty treacherous mountain roads; it handles great in slippery conditions.  you could definitely get an '04, '05, maybe even newer in your budget.

Put down as much as you can. 

mazda3 is actually highest on my list right now! thanks for the good review PG.

Original Post by alibsam:

Put down as much as you can. 

 I agree, right now is a great time because dealers need the business. Don't know if you can get 0% on a used car but if you put a lot down your interest and payments will be low.. GL

Original Post by jules817:

mazda3 is actually highest on my list right now! thanks for the good review PG.

 I have a mazda3 and i LOVE it.  we pay about 330 for it a month though for the next 6 years.  Eventually, we'll pay more monthly just to get it paid off sooner, but that's the terms of the loan.  Anyway...the Mazda3 is excellent, I love it and I have 3 close friends who have them and they also love it.

I didn't see this spelled out but if you can get 0% interest, put down as little as possible. After 9/11, when the big 3 were offering that, my friend put down about $5000 on a Dodge Ram. He could have kept that in the bank and earned interest on it, or put in a CD and earned even more.

Also, shameless plug for Jeep Patriot. They start at about $17,000 and mine gets 28 mpg....better than my Sebring used to get. Then again, you're getting a smaller engine. However, if you still want a truck and a 4 x 4, take a peek at them. Personally, I would wait until this auto bailout garbage is over but I think others that are educated on it say that it makes no difference.

as the others have already said, i would put down as much as i possibly could, then i would get a loan with my credit union and make payments to them. i did these when i bought my new car in August and i'm paying interest at a 4.99% interest rate for the term of my loan. i think that's the best way to go

It depends, if you're going to make more off the money in a CD or interest account (after paying taxes on the interest) than you pay in interest on the loan, then pay as little as possible down and accrue the interst.  If it's going to cost you more than you can earn in interest, then pay as much down as possible (leaving some savings for emergencies).  Overpay the loan where possible.

I love my 2004 Honda Civic.  33 MPG highway, low maintenance, great handling.

Double check the cost of a used car versus a new car.  Often when you add in extra features or warranties or higher financing, the used car can cost almost as much as the new car if you buy it through the dealership.

Honda Civic is a good car.  And put down as much as possible. A compact car is the way to go. I wish you luck.

zoom zoom

I just got a 2007 Chevy Malibu for just under 12K and I Love it!! My parents put 5K down for me (because I am 17 and have no credit yet) and I have a 6 year loan but my payment is only $146 a month!  

But, I agree, I would put as much money as you can afford to down and then see what kind of a loan you can get. I would definitely not suggest getting a short loan with higher payments because everyone I know that has done that has struggled to make their payments. It is better to get something you absolutely know you can afford every month and then pay extra then not be able to make your payment at all.

Good luck!

Whatever you do ... buy American!

why?  so her warranty will be worthless and parts will be impossible to find a year from now?

That will only be the case if the Big 3 are allowed to fail.