[ajmck]

I'm 18 and have never bought a car before. I'm planning on getting the 2006 Prius in January, and was wondering what other costs are involved in purchasing the Prius (Besides interest rates on the loan). If I pay an MSRP of 26,880, what is the total cost of the car I can expect to pay?

Thanks in advance

 

[fshagan]

Here in California, I always use 10% additional as a rule of thumb ... you have sales tax of about 7.5% (depending on where you live) and then license and registration of a few hundred dollars.

 

[Astrowoman]

Don't forget to budget for insurance! A new car will put the rates up. The dealer may also try to sell you additional services/insurances -- for the most part, you can and should just say "no" to these.

 

[janets98]

In my state dealers are allowed to charge for doc fees -- transfer of title, plates, etc. That cost is around $200 but you can ask dealers to wave the fees when you negotiate your deal. If they won't then you can take care of the paperwork yourself and save the money.

 

[mikepaul]

Move to South Carolina. Buy the car and spend a total of $300 on sales tax. Eventually decide where you really want to be, and spend the tax savings going there...

 

[fshagan]

Move to South Carolina. Buy the car and spend a total of $300 on sales tax. Eventually decide where you really want to be, and spend the tax savings going there...

Technically, this is illegal in California ... most states with sales tax have a provision that you have to claim any purchase made on-line or from another state and pay the sales tax you would have paid if the sale were made in-state. No one does it on things like furniture, electronics, etc., but on a car, when you register it in California after purchasing it in another state, the state has the record. If the DMV doesn't collect the taxes when you change registration, they do report it to Franchise Tax Board, and you end up having to pay it.

 

[ajmck]

Here in California, I always use 10% additional as a rule of thumb ... you have sales tax of about 7.5% (depending on where you live) and then license and registration of a few hundred dollars.

I live in California so that makes sense.

 

[ehurtley]

heh. Move to Oregon, NO sales tax, and one of the lowest registration fees in the country.

But if you move back to Cali, you'll be hit with having to pay what the sales tax would have been.

 

[rpm]

I know this advice is unsolicited and might easily be inapplicable to your circumstances, but I'm going to offer it anyway. I don't think you should start your adult life in debt over a depreciating asset. Buy an older used (but reliable) car like a Corolla or Civic, spending much as you can afford to pay cash for. Of that $600/month that you'd be paying on the loan, keep 100 for maintenance & licensing, and put the other 500 in the bank, buying a 1-year certificate of deposit every 6 months when you've accumulated 3 grand.

In 4 years you'll have enough dough to buy a brand new Prius. Keep putting that 500 in the bank each month...pay yourself, earn interest instead of paying out interest. In another 4 years, between the cash and the equity left in the Prius, you'll have enough to buy an even fancier vehicle (should you so desire) for cash. Do that your whole life.

Debt should only be for growth opportunities that you'd have little chance of entering into without a loan: real estate, starting a business, etc.

Now I will go back to minding my own business. Should you choose to buy the Prius, you will love it.

rob

 

[ChasSuitt]

Hi ajmck...

Suggestion: Post your geographical location when asking for information. In your inquiry, different states have different fees and taxes, so other Prius owners in YOUR STATE would have a better idea of what you could expect.

One issue with a previous responder - "depreciating asset." I have owned my Prius for ~9 months and 12,000 miles - currently it is actually worth MORE than it cost me. It will, or course, depreciate over time but it appears that Prius' depreciation is substantially lower than "ordinary cars." In addition, there is significant fuel cost savings to consider.

I find the Prius a FUN car to drive.

 

[Thomme]

Regarding last-minute markup items: When in doubt, turn it down!

Gap insurance - Over $100 from the dealer, and $14 from my insurance co.

Extended warranty - Roughly $2k from most dealers, and less than $1k if you shop around (and you can wait until shortly before the basic expires)

Lojack - Let someone try to steal it.

And let's not forget my favorite - VIN etching.

 

[fshagan]

Debt should only be for growth opportunities that you'd have little chance of entering into without a loan: real estate, starting a business, etc.

You'll never be able to buy a house, start a business, or do any other HUGE ticket item if you don't establish credit first. Buying something on time, and making sure you make every payment on time, establishes a credit history that you can later leverage.

If you decide to go with a cash-based system, you will save money over the long haul, but you will pay more for credit when you eventually need it for a home purchase, etc. Its hard to argue that you should go into debt, but to be realistic, in today's economy you do have to pay attention to your credit rating. Not having a credit rating is almost as bad as having a bad rating.

 

[mikepaul]

Move to South Carolina. Buy the car and spend a total of $300 on sales tax. Eventually decide where you really want to be, and spend the tax savings going there...

Technically, this is illegal in California ... most states with sales tax have a provision that you have to claim any purchase made on-line or from another state and pay the sales tax you would have paid if the sale were made in-state. No one does it on things like furniture, electronics, etc., but on a car, when you register it in California after purchasing it in another state, the state has the record. If the DMV doesn't collect the taxes when you change registration, they do report it to Franchise Tax Board, and you end up having to pay it.

Ummm, I did say move, which implied staying. An eighteen-year-old can find something to do...

 

[mikepaul]

heh. Move to Oregon, NO sales tax, and one of the lowest registration fees in the country.

But if you move back to Cali, you'll be hit with having to pay what the sales tax would have been.

Umm, isn't there a limit to how long after a car is purchased for them to still demand it? Seems like a racket if after nearly two years, I'd have to pay the difference between $300 and maybe $1875 if I moved to CA...

 

[rpm]

If you decide to go with a cash-based system, you will save money over the long haul, but you will pay more for credit when you eventually need it for a home purchase, etc. Its hard to argue that you should go into debt, but to be realistic, in today's economy you do have to pay attention to your credit rating. Not having a credit rating is almost as bad as having a bad rating.

I think that's largely accurate, but you can establish a strong credit rating without revolving loans or otherwise paying interest. Just have a couple of strong credit cards, run everything (groceries, gas, etc) through them, but pay off the balance in full each month. A few years of zeroes on the credit report and you'll get market-rate interest on a mortgage.

r

 

[kirby]

I agree with RPM this is a very expensive first car for an 18 year old and to put yourself in debt on a rapidly depreciating asset such as a car is a mistake. If you are doing this because you think you will save money on gas it is a case of false economics. A reliable three or four year old used car (even though it consumes more gas) will have a much lower total cost of ownership. Please think this out carefully before you jump.

PS - Obviously none of this advice means anything if you have a large trust fund

 

[doulamom]

in CA they aren't allowed to legally try to sell you gap insurance. i just learned that....

I'm 34 and SHOOT, I can't afford a new prius! I just got a 02 just as good i think and saved a bundle! So i got as much extended warranty as i could.

 

[ajmck]

I know this advice is unsolicited and might easily be inapplicable to your circumstances, but I'm going to offer it anyway. I don't think you should start your adult life in debt over a depreciating asset. Buy an older used (but reliable) car like a Corolla or Civic, spending much as you can afford to pay cash for. Of that $600/month that you'd be paying on the loan, keep 100 for maintenance & licensing, and put the other 500 in the bank, buying a 1-year certificate of deposit every 6 months when you've accumulated 3 grand.

In 4 years you'll have enough dough to buy a brand new Prius. Keep putting that 500 in the bank each month...pay yourself, earn interest instead of paying out interest. In another 4 years, between the cash and the equity left in the Prius, you'll have enough to buy an even fancier vehicle (should you so desire) for cash. Do that your whole life.

Debt should only be for growth opportunities that you'd have little chance of entering into without a loan: real estate, starting a business, etc.

Now I will go back to minding my own business. Should you choose to buy the Prius, you will love it.

rob

Thanks for the advice...

I've thought about this for a while now. Right now I have teo delivery jobs that require me to drive about 500 miles a week on my own gas money. I've looked into many different cars and the Prius seems to be the best choice for me. I would be saving tons on gas money and would be able to perform my job better by taking the carpool lane (not looking forward to the big stickers). I'll also be putting 10-12 thousand for my down payment which would bring my monthly bill (if I use the 10% rule) to $220-$300 depending on which package i get.

 

[DanMan32]

in CA they aren't allowed to legally try to sell you gap insurance. i just learned that....

I'm 34 and SHOOT, I can't afford a new prius! I just got a 02 just as good i think and saved a bundle! So i got as much extended warranty as i could.

You can't get GAP in CA?

 

[jdwatrous]

Deal of the Century

I just bought a 2004 package 5 with 7100 miles for $16,500.00. It was an incredible deal. I bought it from a body shop who had to replace the two side doors because of an accident. But there is no frame damage and it rides and looks brand new. I think its the best deal I've ever heard of for a Prius.