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Zeta Taskforce
Jun 27, 2002



cfae203 posted:

Okay.

Situation. Piece of poo poo Pontiac- about 12-13 years old, fair condition, 160K miles, and in need of monthly/bi-monthly maintenance.
Character. College student 5 months from graduating with a guaranteed 40-50K job coming at me. Currently have no dollars. Credit Score. EH
Plot. In need of used reliable car which I was planning on getting in 5-6 months. Making a drive somewhere across the country for new job would have required it anyways (little POSP wouldn't have made it). I currently drive <5-6 miles a day so we are able to work for the present but POSP is going to get abandoned if I can figure this out. Looking for something around 10,000 bucks, with less than 50-60,000 miles.

I have been going on the notion that sometime in my past I have seen on TV "Buy a car, No Interest, No Payment for 6 months!".. (link 6 month convenience to above). I have a terrible knowledge of how financing works and am looking for some guidance.
Does this really exist? & if so is it legitimate and not something that can screw you over in the long run?
If this isn't something thats feasible for a consumer who wants a used car with mediocre credit, then would it be possible to get a loan for 60 months and once able to make better payments refinance it to a shorter pay-off window (24-36)?
I get it. I know nothing of loan processes. Help me dammit.

Can I try to translate the dramatic screenplay into a question?

Is ďI have no money, poor credit, but I have a job lined up in a 6 months when I graduate. Iíve seen advertisements from dealers with no money down, no payments for 6 months, we finance everyone, and was wondering if that was legit?Ē a fair translation?

I have not seen many deals like that for awhile. I think offers like that were during happier times in the economy when the big banks were still trying to push debt on us. I remember Mitsubishi was offering something like that widely about 5 years ago and they ended up being burned and burned hard. Many people a year later found they couldnít pay, and the cars they repossessed had highly depreciated and the loan balances did not. Considering that cars go down in value, to the extent someone would offer it now, they would likely require strong credit. I donít think anyone would offer that on a used car.

Why canít you nurse your car along for another 6 months and when it comes time to move, fly out or rent a UHAUL and drive there with your stuff, and then buy a car in your new destination when you actually have a paycheck?

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Zeta Taskforce
Jun 27, 2002



You want to approach 0% deals with a great deal of skepticism, if at all. There is a psychological tendency to view it as free money and to buy more car than you otherwise would. Interest is not the biggest expense of owning a car, and with a more expensive car, your taxes, your insurance, your depreciation, and probably repairs will all be higher. However, even if you donít overbuy, you will still be paying full retail for whatever car you decide to get. Forget about finding out what wholesale is, or the invoice price the dealer paid and negotiating from that. They are taking a loss on the financing in order to move metal. They will make sure they make it up elsewhere.

Rates are so low if you obtain your own financing, you really donít save that much on payment between 0% and 5% for any given amount borrowed. But you will actually save a lot of money if you are able to negotiate a better price and obtain your own financing and need to finance less. Finally, 0% makes you complacent about paying it off early because you get this ďfree moneyĒ mentality. It still is a payment, it still works against your debt to income ratio, it is still debt. You would be a fool to borrow against your car to invest in the stock market, which means the only safe option is a bank making 1%. Youíre naÔve to think you are pulling one over the system by getting an extra 1% out of it.

kimbo305 posted:

It doesn't seem like a good deal to me, but only because I heard that they were going for $10k in the worst of the recession. Not sure how much pricing recovered on small cars since then.

Exactly. Expect to overpay if you go for their incentive financing.

Zeta Taskforce
Jun 27, 2002



NOTinuyasha posted:

I just put a deposit on a new 2011 Elantra Limited, only paid $100 above invoice (~$20,100 plus $720 destination), 2.9%/48 months. I'm 20 with a 640 credit rating, $4000 down and had my grandfather co-sign. The insurance comes out to $160 a month.

Other cars I test drove :

-Fiesta, really narrow thanks to a big center console and narrow wheelbase, terrible rear seats
-Cruze, higher price, annoying styling, GM resale value
-Mazda3, higher price, crappy fuel economy, way too common

I didn't bother with the Corolla/Civic/Fit since all seem to be end of lifecycle for 2011.

The Hyundai dealer wasn't pushy at all, but the Elantra seems a bit difficult to pin down, they didn't have any on the lot except for the one I test drove, which was sold the next day. I wanted a specific color anyway, so it's getting shipped in this week :)

You did good, worked out well for you, but if your grandfather was here, I would have given him the same advice I give everyone. Never ever cosign a loan for anyone.

Zeta Taskforce
Jun 27, 2002



Ridonkulous posted:

I was pointed to this thread from the General Small Question Thread.

I have a 2007 Nissan X-terra. It was great for the car I wanted 2 years ago when I bought it, but it does not have the best gas mileage and the size is a lot bigger than I need (when I bought it my daughter needed to sit in the back seat, but she is old enough now for something with one row).

The specifics are it just rolled to 70,000 miles, The major problems are still under warranty. I still owe $12,000 on it over the next 3 years.

What options do I have for selling it and buying a small Truck?
Will I have to swallow my loss and hope to sell it for whatever I could get for it (I will probably just keep it till I paid it off)?
What kind of benefit would I be looking at to trade it in for the new vehicle I'm looking for?

I popped your numbers into Kelly Blue Book, and if your truck is in at least average shape, you do have equity. You would be able to sell it without bringing money into the deal or the hassle of getting another loan to release the title. That said, Don Lapre and Nocheez are 100% correct. It seems like you are using high gas prices to rationalize your desire for a new truck. You have a history of doing this exact thing. I donít have kids, but I imagine that there were other vehicles on sale 2 years ago that would have adequately and safely held your daughter in place. You bought this in 2009 when gas prices were cheap, but the price spike of 2008 should have been fresh in your memory. Its not like it should be a surprise that gas might cost $3.50/gallon someday. Honestly, you sound like the wife of one of our BFC superstars who discovered that Honda products were the only true cure for her back pain.

My advice is to just get what you want since you have no intention of trading this in for a small, fuel efficient car of a similar age.

Zeta Taskforce
Jun 27, 2002



Saltin posted:

The best is people who will drive 10 miles to save 10 cents a gallon, and there are so many people at that station they wait in line for 20 minutes idiling when they get there.

What about the ones who after they are done filling up the tank, they go in and buy a Redbull that probably works out to $26/gallon to fill up their personal tank?

Zeta Taskforce
Jun 27, 2002



Magic Underwear posted:

You might be good with numbers and all but those words don't make any god damned sense.

Might have been too cleaver with my wording. My point is that people will cry when they have to buy a gallon of gas for $3.50, but as it turns out, gas is the cheapest liquid that a gas station sells. However no one minds when they pay $1.49 for 12 fluid ounces of their favorite beverage.

Zeta Taskforce
Jun 27, 2002



CornHolio posted:

I'm giving serious thought to getting a third vehicle.

Now, before you go all "HAHA TYPICAL CH NOTHING CHANGES OMG" let me explain. This probably wouldn't happen until this fall or even next spring, when I'm in an even better position than I am now.

I'd like a cheap spare utility vehicle like a small pickup or SUV. I'm thinking Ford Ranger, Jeep Cherokee, Dodge Dakota territory. I'm also thinking no more than $1,000.

Here are my arguments:

- Being able to pull one of my other two cars off the road and fix at my leisure, rather than having a mechanic do it because I need it back right away.
- Being able to haul stuff as needed rather than rent a U-haul or borrow someone elses vehicle
- Parts for what I listed above are stupidly cheap nd decent examples are all over the pick-n-pulls.
- If I need the money I should be able to sell it for about what I paid for it, assuming halfway decent condition and still running.
- If I have to replace one of my daily drivers, I can take my time doing so rather than needing a new vehicle right away and not being able to do research or wait for a good deal.

I have a hard-on for the old AMC 4.0 six, which is why I'd like a Cherokee; though I've heard the manuals have issues, so I might have to spring for an automatic and hate life. I don't know much about Dakotas or Rangers but don't often hear bad stuff about them. I have, however, heard bad things about working on S10s so I think I'd avoid those.

Am I completely insane or am I being rational here? And if I am in fact being somewhat rational, any thoughts on what a good cheap spare vehicle would be?

Just out of curiosity, how often do you need to haul stuff? I mean actually haul, like something so big it can't fit in the trunk of the Volvo?

I double dare you to ask this question your thread. You know which one.

Zeta Taskforce
Jun 27, 2002



You've made tons of progress on your debt. You will probably be debt free this point next year. You are making more money and closer to what you are worth. You've sacrificed. You can afford it, and if it allows you to tinker on your other cars, then that's a plus.

But Leperfish is spot on about the costs. I just think you will be able to afford it. Just don't rationalize that you will be saving tons of money. A man needs toys.

Zeta Taskforce
Jun 27, 2002



ZeroAX posted:

Does anyone have any experience refinancing an auto loan? Is it even worth doing? My girlfriend was asking me if I think she should do it, but honestly I didn't know you could refinance an auto loan until now.

She has a 2008 VW Rabbit with around 40K miles. Her interest rate is 8% and has either 2 or 3 years left on the loan for around $8,000. A quick search shows rates around 2.5% - 4% for a refinance loan.

I help people refinance cars all the time. It's not very hard to do. We ask for proof of income, the registration, payoff amount from the other bank, and an insurance binder with us as loss payee. To get the binder you can just call your insurance company and tell them to fax one to us. You could gather everything in a hour if you wanted.

It's worth trying, but you do want to have realistic expectations about the result. Even assuming her credit is top notch and she gets 3% or 4%, her payment will probably come down by around $8 or so. Of course that is still a couple hundred dollars over the course of the loan, but its not like it will revolutionize her life.

You didn't ask, but it goes without saying that if her credit is rough and yours is excellent, YOU DON'T COSIGN!

Zeta Taskforce
Jun 27, 2002



ZeroAX posted:

So assuming her credit is good, is it worth doing then? There aren't any fees or anything that they tack on to the loan balance?

Her credit is pretty good and could probably qualify, and I wont cosign. I know the interest savings wouldn't be huge, but she has other debt and is a little tight on money right now, so any savings would definitely help.

Yeah, its worth doing. We charge a $25 fee to retitle the car. I doubt she would pay much more than that. Most loans don't have prepayment penalties. Even if the savings are not dramatic, it is still savings.

Zeta Taskforce
Jun 27, 2002



Not only is it a valid question, asking it should be part of a buyerís due diligence. There is no way you can tell with 100% certainty that the seller isnít lying through their teeth, but the reason becomes part of a narrative. If they say they are downsizing and becoming a 1 car family, that might make sense if they live next to public transportation or they are empty nesters. It would make less sense if you go there and you see they have 4 kids of different ages running around and you google the sellerís name and itís associated with a company that is 50 miles away.

People who sell their cars in private party sales do it so they can get more money than the trade in values from the dealer. This is the benefit. But like anything you do in life, there are costs. In this case the costs are in time and loss of privacy.

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Zeta Taskforce
Jun 27, 2002



Orange_Lazarus posted:

I attempted some of the more risky hyper mileing techniques way back and realized pretty quickly the majority of them were too dangerous so I stopped. However, I've always wondered about how long a car has to idle before it uses as much gas as it takes to start it.

The main reason why I'm bumping this topic after a few weeks of inactivity is to report that I finally got the 2000 Chevy Prizm (Thanks CH and others for the advice) and to also ask for a few pointers on my current problem, which is selling the Rav 4.

To refresh your memories my wife currently owns a 1996 Toyota Rav 4 with over 225k miles. It has a cracked head, leaks oil (Drips) and no AC.
We were quoted 1400 to repair the head. The repairs won't include fixing the oil leak or the AC.

Edit: I'm considering selling the car or donating it for a tax credit; probably through the NPR Car Talk Vehicle Donation program. I've been reading Publication 526 and it appears you're supposed to use the cars "Fair Market Value" from a source like KBB to determine how much you can deduct; however, I'd also have to take into account the expected repair costs. How would I go about doing that?

I suppose my other option is just "Put it up on craigslist and hope for the best".

Any advice would be greatly appreciated.

Assuming it is in basically working condition and just needs regular maintenance, I would just go with Kelly Blue Book, and spot check craigslist and autotrader to see if comparable vehicles are selling for that. If it has something drastically wrong with it, I would take that into account. A used car that would go for $1500 if it was in good shape, but needs $2000 in repairs doesnít become worthless. Someone will buy it for something and do the work themselves or buy it for parts, but it might be worth $500 if you sold it as is.

Itís not like there is only one way to figure out itís value. As long as you are not greedy and do something way off the wall, you are not going to get in trouble. Remember when you were in school and the teacher made you show your work in math? Itís kind of like that. As long as you do something reasonable and can back it up, you will be fine.

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