[Zach]

I hope it's not taboo or already covered in detail somewhere that I haven't looked, but I would like to get some advice on buying a new car. The last vehicle I bought was a certified used pick-up from Toyota, but this was 7 years ago and at the time I didn't have a credit history and the dealer was getting slimey so my grandfather paid for the truck outright, and I made payments to him.

I have established a clean credit history since then. I am not carrying any debt at the moment. I rent. I am not over extended when it comes to rent:income. I think my drive off the lot price for this car will end up around 28-29,000.

I know there are more variables involved than that, but I'll start with those. I've looked into a car loan through my bank, and it's currently around 3.75% for a 3 year or 4.25% for a 4 year.

Should I try to put as much down as possible, or put down a minimum and keep that money liquid? I'm not sure what to expect when the guy sits me down with all the paperwork. I am form-phobic. I've been bracing myself to just keep saying "No" when/if all the little sales pitches start to come at me.

Anyone care to share your thoughts or experiences on this?

Thank you.

 

[BIF]

Hi, Zach:

I always prefer to put more than 50% down on my vehicle, so that I can have a small monthly payment. It also tells the bank that you're serious about this vehicle, because you're willing to assume more risk up front.

The two most important things I pay for on a monthly basis are the rent/mortgage and the car. So I always ask myself, what if I lost my job, and had to take another job at a 25% or 30% or 40% pay cut? Could I still afford my living quarters and car payment? Another good question to ask is "could I still afford them with my unemployment check while I am looking for a new job?"

So the answer, either "yes" or "no", will dictate for me what the monthly payment should be. And I calculate my down payment accordingly. Live under your means, and hopefully, you won't have to sell your car if the job situation takes a turn for the worse.

Of course, my method requires that I have the ability and discipline to save up that down-payment in the first place. But if you do have this discipline (and you sound like you do), then you put yourself into a position of power, with the ability to make these decisions for yourself.

Whatever your decision, good luck with it.

 

[03Jill]

Zach,

You may also want to ask yourself what add-ons you want and if you want to finance them. They should give you a few days to make up your mind if your not going to finance them, so don't let them pressure you. We like to pay for any extended warrenty and not finance it. They will also try to sell you the plan that takes care of your paint and inteior. There are probably posts here to read to find out as much as you can about this type program.

Good luck with your new adventure. What an exciting time.

Jill

 

[anthonynd4prius]

hope this helps

Zach,
I am in the same boat you are, so dont feel bad. I myself am struggling to figure out what is the best option is for me. More than 50% is over 12,000 down. WOW, unless you make alot of money or save for a good amount of time that sounds like dumping alot of money at once(people who make less than others know what I mean.) In contrary to what he said about JOB situations, if you have 12,000 saved and get layed off you have quite some time to pay a car payment and other bills assuming you have 12k available(and live frugal with no high mortgage) not to put down on a car, so say you put 2k down on package AG, you pay MSRP and dont do the warranty or anything extra. *roughly* you will be at 405.00 a month. If you did put 10,000 more down equaling 12k you would be at 221.00. Say you did like I think I am going to do put about 6,000 down be at about 330.00 which is not bad. The price I did the comparison for is 24,000 inc tax and tags, and a 4% finance rate. I would say whatever you think you can afford to do, I can afford 3500 right now, but by the time my 6month wait happens I will be able to put atleast 6000. So think carefully. I am still deciding, but I do know this nothing more than 350.00 a month will not work for me so make up your comfortable monthly payment which for me is ideally 300-335. A good rule of thumb which I am using, a car payment should not be more than 15% of your total income per month. Which would bring me at 340 a month w/(6,000 down.) That would mean 85% of my income can go to other things like rent or mortgage and other bills including car insurance. WHAT DO YOU THINK!!!!!!????

 

[AgentElrond]

Car or house, I try to arrange a payment I feel comfortable with, then pay extra principal each month if I think I can afford it. If something unplanned comes up (e.g. buying a new heat pump), I can always nix the extra principal.

 

[Zach]

Thanks guys, this is the sort of feedback I was hoping for. Not to wear out my welcome, but can anyone describe the process of what goes down once I'm there sitting at the desk, pen in hand, knees shaking, crying for mommy...I mean...being a smart and assertive consumer?

Thanks again.

 

[Richard]

For the past few years I'd been driving a 1988 Acura Integra, handed down from my mommy. I'd been poised to buy a new car -- my first -- for a while, so I actually saved up a bit of money. Enough to pay for the whole thing in one shot, which is oddly liberating! It'll likely be my single largest check for a while.

 

[moocatdog]

Thanks guys, this is the sort of feedback I was hoping for. Not to wear out my welcome, but can anyone describe the process of what goes down once I'm there sitting at the desk, pen in hand, knees shaking, crying for mommy...I mean...being a smart and assertive consumer?

Thanks again.

Zach,
Because Prii are in short supply I doubt you'll be facing a lot of negotiating over price. But, generally, you sit down with your friendly salesperson and they ask you how much money you have to put down and what loan terms (payment and length) you are hoping to carry. They take that information in to "the boss" and, after making you wait ten minutes or so, they come back and explain that you're going to need either a lot bigger down payment or a much longer loan to get close to the payment you want. You then either leave or give in a little. This happens once or twice and then "the boss" comes out to arm wrestle a few more dollars away from you before you finally reach a deal.
But wait! There's more! (This is the part you're likely to encounter with the Prius.) Now you go in to sign the papers with the sales manager who, while going over all the paperwork with you, will try to guilt you into buying fabric protection, undercoating, paint protection, extended warranties, and sundry other products--all of which are practically pure profit for the dealership. An important thing to remember is that this person rose to their current position because they are the biggest liar on the premises. No matter what they say, everything they try to sell you can usually be purchased at a later time and/or from another party, and always for much less money.
Good luck,
Moo

 

[Zach]

Moo,

*eek, gasp, mutter, choke, whimper*

That's exactly the kind of detail I was looking for. Ugh. I had a little fantasy going that since I had established with my salesperson that I will only pay MSRP, my buying experience would be quick and clean. Oofa.

I know it doesn't work that way, but the way it does work creeps me out. Thanks for helping get my defenses up.

Richard, way to go! All paid for, that is ideal.

I had been thinking of going Anthony's route, and putting 6 or 7k down, but I am going to see if I can up that now. I can't quite pull off Bif's half down plan. Blah blah, typing out loud. This really helped gang, much appreciated.

 

[richard schumacher]

Read the free helpful advice on car buying at the Consumer Reports website http://www.consumerreports.org

 

[moocatdog]

I had a little fantasy going that since I had established with my salesperson that I will only pay MSRP, my buying experience would be quick and clean. Oofa.

I know it doesn't work that way, but the way it does work creeps me out. Thanks for helping get my defenses up.

No need to worry or be too defensive. They will just be trying to do their jobs. Buying a car is an emotional experience and the dealer, knowing you've got your heart set on driving home today in a shiny new dream car, uses your emotion to their advantage. Your job is to know how much the things they are trying to sell you (vehicle, extended warranty, fabric protection, etc.) are really worth. That way, you'll know whether something like the offer below is a reasonable deal or not...

"Wow, Zach, congratulations on getting your new Prius! (Sign here.) I'm still trying to locate one of these for my 90-year old grandmother, so you should feel pretty darn special. A special car for a special guy. (Sign here.) Hey, speaking of special, the new Prius sure has some amazing technology, doesn't it? Really amazing. Toyota sure builds great cars. (Sign here.) How's that latte my receptionist made you? You like Starbucks? I'm a triple short, doube wide, extra gold flecks, vanilla, chocolate, soy foam, man myself. I only wish I would have invested in the fantastic ScotchGuard protection plan when I bought my new Avalon. (Sign here.) I spilled a drop on my seat the other day and had to have my interior completely replaced--cost me $7000 dollars. You're a good guy, Zach, and I would hate for that to happen to you. I'd recommend getting the fabric protection today. Sign right here and we'll roll the incredibly low cost of that right into your loan--it's only about a dollar a day. I'm not supposed to tell anyone this, in fact I haven't even told my grandma, but the price is going to triple tomorrow! (Blah, blah, blah.)

Drive happy,
Moo

 

[toyotrever]

OK, its nice to see alot of generalizing going on in a post that is supposed to help someone. Zach asked for help, not to hear your uninformed generalizations on car dealers. I have been selling Toyotas for almost a year now, and i have NEVER lied to any of my customers!!! Just because the salesman has to go see the manager for the numbers doesnt meen that we are trying to lie or rob you. Salesmen DONT have the authority to approve numbers at most dealerships. As for the lovely story about the finince department, why would you sign for anything without knowing what it was and how much it costs in real money, not the increase in payments? There are some very good programs offered in the office, GAP for one is something that anyone who owes money on a car should have. I will agree that some things are a waste, like the life insurance, but if you dont know the industry or what you are talking about, stay out of it.

 

[Zach]

:lol: Moo! Thank you for your advice and great humor.

ToyoTrever, I appreciate the help. As an actual Toyota salesperson, can you walk me through the process I am to expect when I finally go in and make the deal? I have opted for the highest package and a few extras. I have the funds to put 1/3rd down and I am flexible on either a 3 or 4 year financing plan at ~4%. When I first got my mind set on buying a new car, this car, I was thinking the approximate 20k base price was as much as I could bite off. Because of the extras I'm up to about 30k out the door. As a salesperson, what would you ask of me on top of that? Does it make a difference if I come in with a loan in place from my bank?

Thanks for your time.

 

[moocatdog]

OK, its nice to see alot of generalizing going on in a post that is supposed to help someone. Zach asked for help, not to hear your uninformed generalizations on car dealers.

Actually, Zach asked for a description of the process. I admit that I generalized and exaggerated but, in my experience, the description is accurate.

I have been selling Toyotas for almost a year now, and i have NEVER lied to any of my customers!!!

I admire and applaud your ethics.

Just because the salesman has to go see the manager for the numbers doesnt meen that we are trying to lie or rob you. Salesmen DONT have the authority to approve numbers at most dealerships.

You are right, approving numbers is generally not the salesperson's job.

As for the lovely story about the finince department, why would you sign for anything without knowing what it was and how much it costs in real money, not the increase in payments?

Forgive me if I'm stating the obvious, but that was the whole point of my message.

There are some very good programs offered in the office, GAP for one is something that anyone who owes money on a car should have.

I never said the offerings weren't valuable, just that they are almost always available for less if purchased elsewhere. Hence, my advice to know comparable values before entering into negotiations.

I will agree that some things are a waste, like the life insurance, but if you dont know the industry or what you are talking about, stay out of it.

So, the completely transparent, ethical, and honest transaction you started out defending now includes the selling of products that are a waste; probably not your best strategy.

In closing, I will ad that I do know what I'm talking about, so I respectfully decline to stay out of it. However, I am truly sorry that my admitted generalizations offended you. I understand that a person in your field suffers from guilt by association and I will attempt to be more sensitive in future posts.

Drive happy,
Moo

 

[toyotrever]

Zach,
First, do not pay over MSRP. There are enough dealers out there that will sell without the markup, you might just have to drive alittle to get it. Second, dont put down anything more money wise than you need to to gfet the payment to the comfort level that you want, why put actuall money on a depriciating assett? Leave it in the bank and make money off of it. Third, dont buy ANYTHING in the back until you are completely satisfied with the explanation of coverages. Honestlly the only thing you really should get is GAP. They will offer alot of stuff that you really wont need. If you can get a preapproval from your bank, it is better to do it that way. Then you dont have to worry about anything that may be fishy at the lot you are going through, not all dealers have ethics, just dont assume that all are crooks. Let me know if you need anything else.

 

[Zach]

ToyoTrever,

Much oblidged. I have a good feeling about my salesperson, but I realize he's not the only one I will be facing. The car is here (eeeeeeeeeeeeeiiiiiii wooooooooooohoooooooooooo!) and I'll be picking it up Wednesday or Thursday if all goes well.

What is GAP?

Once again, thanks to all for your candid replies.

 

[toyotrever]

GAP is protection on the value of the vehicle in the event of a total loss. If it gets stolen and you owe 20,000 on a car that is worth 15,000 without GAP you pay the difference, with it the bank does. Congrates on the car!!!

 

[Zach]

This is still a good topic for anyone else out there like me, totally new to buying new cars, but I've settled on a plan. I got a pre-approved loan through my bank for 2/3rds of the cost, and I am paying the other third. My salesperson gave me the drive off the lot price, and we'll shake hands on Friday.

My excitement level has been riding so high for so long now, that I've reached a state of calm. Just 3 more days to go. I can make it...barely!

 

[moocatdog]

This is still a good topic for anyone else out there like me, totally new to buying new cars, but I've settled on a plan. I got a pre-approved loan through my bank for 2/3rds of the cost, and I am paying the other third. My salesperson gave me the drive off the lot price, and we'll shake hands on Friday.

My excitement level has been riding so high for so long now, that I've reached a state of calm. Just 3 more days to go. I can make it...barely!

Zach,
This is an exciting time for you! I look forward to hearing all about your car-buying experience and what you think of your new car.
Drive happy,
Moo

 

[BIF]

Congratulations, Zach! I'm glad you found financing to your satisfaction, and I hope you have a great time with your new car, too!