Buying a Car

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Palyxandra -> Buying a Car (6/15/2009 1:29:37 PM)
I am planning on buying a car at the end of this summer. I am not looking for any particular kind of car. I was wondering if anybody knew how expensive of a car I should be looking for if I have only got 3000 dollars cash for it? Basically, would it be a bad idea to get a car for 5000 dollars and have to take out a loan?

GroupW -> RE: Buying a Car (6/15/2009 3:28:54 PM)
Way too little information to be able to judge. Here are just a few questions to consider: How does the payment fit within your budget if you were to take out the loan? Would you have enough cash left over in case you needed repairs done (which you will!) How much savings do you have? How much are you saving currently? Where do you live? Do you have access to public transportation as a backup? Can you afford to insure it and you ? How is your credit? How old are you?

Palyxandra -> RE: Buying a Car (6/16/2009 9:26:36 AM)
quote: ORIGINAL: GroupW Way too little information to be able to judge. Here are just a few questions to consider: How does the payment fit within your budget if you were to take out the loan? Would you have enough cash left over in case you needed repairs done (which you will!) How much savings do you have? How much are you saving currently? Where do you live? Do you have access to public transportation as a backup? Can you afford to insure it and you ? How is your credit? How old are you? You are right I didn't give much information at all! Some of those questions I don't even have answers for. Doing research Thanks for the head's up! -Blessings

ctpruitt -> RE: Buying a Car (6/16/2009 9:31:12 AM)
If at all possible pay for the car in cash with the 3k and be done with it.

gcsmithjr -> RE: Buying a Car (6/16/2009 6:22:42 PM)
quote: I am planning on buying a car at the end of this summer. I am not looking for any particular kind of car. I was wondering if anybody knew how expensive of a car I should be looking for if I have only got 3000 dollars cash for it? Basically, would it be a bad idea to get a car for 5000 dollars and have to take out a loan? Someone called Car Talk with exactly this question a few weeks ago and I can't remember what they recommended - I think they recommended an older Volvo but you might check the Car Talk website to see if you can find their response (also good for a few laughs). I definitely would NOT take out a loan to buy a $5,000 used car - the car will go down in value and, if it dies on you, you'll be stuck making payments (I'm not totally against borrowing money to buy a new car if you make a significant down payment, you're getting an extremely low interest rate - like 0% - and have the money in the bank to pay back the loan, but it's a really bad idea to borrow money on a low priced used car).

GroupW -> RE: Buying a Car (6/16/2009 7:14:22 PM)
Normally, I'd agree that just paying the $3k cash for a car is the better option, but I think you also have to consider repair costs. You can soak up $2k in repair costs and longevity fairly quickly, and $3k doesn't buy you much. For the wrong car, $3k can be a lot. For the right car, $5k can be a little. Either way, $5k for the wrong car at the wrong time is a disaster. It is possible to be penny wise and pound foolish here, which is why I asked about budgeting/financial issues. Edit: plus, it's just good practice to run through the financial issues first. It's a good idea to run the numbers before any major purchase gets made, no matter what. Oh - and the Volvo's. Very safe, but hideously expensive to repair. Been there and done that with a friend. One of those things that seemed like a good idea at the time and may well keep me out of the car recommendation business permanently.

APZR -> RE: Buying a Car (6/17/2009 9:06:06 AM)
Make sure you shop around, get a feel for the market and values. It may even help to go to some auto auctions that are open to the public. Before you buy, it's worth a couple hundred bucks to have a mechanic look over it. For used cars, I tend to stick with the "rice burners"... Honda & Toyota. Partially because of their history of longevity, and because I know how to do most of the repairs on those cars having to do my own as a youngen many moons ago.

blessedinnyc -> RE: Buying a Car (6/17/2009 1:33:49 PM)
quote: ORIGINAL: Palyxandra You are right I didn't give much information at all! Some of those questions I don't even have answers for. Doing research Thanks for the head's up! -Blessings One other question I have is whether this is a purchase that can wait or if it is something that you need for work. Getting financing on a used car is going to be an expensive proposition right now. One of my friends who has a 700-something FICO score was quoted at 13% for financing the last 1/3 of his car loan. I also totally agree with GroupW. Cheap cars can be very expensive. Do you know any good mechanics who'd be willing to help with an inspection?

GroupW -> RE: Buying a Car (6/17/2009 5:08:18 PM)
quote: ORIGINAL: blessedinnyc Getting financing on a used car is going to be an expensive proposition right now. One of my friends who has a 700-something FICO score was quoted at 13% for financing the last 1/3 of his car loan. Good point. There remain very few companies that finance cars that are older than 4-5 years or that have too many miles. The few companies that still do this tend to require very good credit scores and very clean credit. 13% is some pretty expensive debt. Interest alone would pay for a couple of repair bills.

GroupW -> RE: Buying a Car (6/17/2009 5:10:38 PM)
quote: ORIGINAL: APZR Make sure you shop around, get a feel for the market and values. It may even help to go to some auto auctions that are open to the public. Before you buy, it's worth a couple hundred bucks to have a mechanic look over it. Especially at this price range. A good friend bought a $1200 Toyota not realzing that the main engine bearings were bad. Nearly turned into a $1200 writeoff.

judii1 -> RE: Buying a Car (6/18/2009 8:13:06 AM)
You might find a good deal if you check out your local newspaper. Take a look at who you are buying from, too. If it's an older person, it might be in better mechanical shape than if you buy from a person in the late teens. Older people have a tendency not to put the "petal to the metal" every time they take off. Once you find a car, you could also invest in a CARFAX to see if there have been any problems or previous accidents on it. Sometimes reputable dealers take cars as a trade in. You might be able to offer them the money you have on a $5000 car. If the dealer is a good one, he should give you a Carfax on it at no charge. Just beware that some dealers advertise things like " drive or tow your old vehicle here and we will give you $2000 trade in!' We found a used truck at a dealer and they took $1500 less than the price. It was a one owner vehicle and it lasted over 7 years.

Palyxandra -> RE: Buying a Car (6/18/2009 3:15:17 PM)
quote: ORIGINAL: blessedinnyc quote: ORIGINAL: Palyxandra You are right I didn't give much information at all! Some of those questions I don't even have answers for. Doing research Thanks for the head's up! -Blessings One other question I have is whether this is a purchase that can wait or if it is something that you need for work. Getting financing on a used car is going to be an expensive proposition right now. One of my friends who has a 700-something FICO score was quoted at 13% for financing the last 1/3 of his car loan. I also totally agree with GroupW. Cheap cars can be very expensive. Do you know any good mechanics who'd be willing to help with an inspection? Actually my step-dad knows practically everything about cars. My sister has a ford truck and he has done loads of check-ups and oil changes. Last week he even changed the water pump. So I know as far as mechanics are concerned.. he could do practically anything!

Palyxandra -> RE: Buying a Car (6/18/2009 3:17:00 PM)
oh also blessedinnyc... My sister has been dropping me off at work (we both are full time 8-5) but my job is only a summer position so when I get a new job in September I will need to have the car because I will most likely be working odd hours and farther away than I am now.

GroupW -> RE: Buying a Car (6/18/2009 5:17:43 PM)
If all you have is a temporary position right now, I'd think long and hard about taking out a loan now. Might be best to wait until you had a better idea of what your longer term finances are going to look like. If you bought a cheaper car, would you have access to alternative transportation while repairs are being done? Also keep in mind, that regardless of the price, you're likely to be buying a car that will need brakes relatively soon or exhaust parts, or tires, or ..... Plan to keep $500 - $1,000 or so in reserve to take care of those things. Depending on the make & model, you can anticipate spending as much as that in repairs every year (and possibly more, though you wouldn't necessarily want to spend more on the car than what it would be worth to replace.)

peace77 -> RE: Buying a Car (6/18/2009 9:30:25 PM)
If you don't have a new job lined up for fall, then don't commit to a car loan. You might want to talk to a local insurance agent and get an idea of what insurance would cost you for a few different models of cars that are available in your price range. Insurance for some car models is far more expensive than others. Keep in mind that there is more to pay than just the price of the car and insurance. You will need to pay for tags, title and taxes. Does your community have carpooling or public transportation? It might be best to wait until you have more saved up. Peace, Anne

Palyxandra -> RE: Buying a Car (6/19/2009 10:10:28 AM)
ok thank you. Yes I am definitely wary about buying a car without a job lined up for the fall. Hopefully I can get that situation worked out fairly soon. And I know we need to be even more economical in this recession..

GroupW -> RE: Buying a Car (6/19/2009 11:20:35 AM)
quote: ORIGINAL: Palyxandra ok thank you. Yes I am definitely wary about buying a car without a job lined up for the fall. Hopefully I can get that situation worked out fairly soon. And I know we need to be even more economical in this recession.. If you spend money like a) we're in a recession, or b) like we're about to be in a recession then you'll rarely go wrong. Things go off the rails when we forget that the bad times occur with alarming frequency. That's actually one of the things that caused the current crisis. People get used to the good times and forget that bad times are just around the corner. We overspend, undersave, and get caught unprepared. And then we panic. Spend money like you could be unemployed tomorrow. Prudence means you don't have to adjust your behavior too much in the lean times.

Palyxandra -> RE: Buying a Car (6/19/2009 4:12:33 PM)
Thanks GroupW, that's good stuff to remember! I'm a little anxious about this stuff but I know that if I continue to get good advice and pray about any money that I spend that I should be ok.

GroupW -> RE: Buying a Car (6/19/2009 4:21:38 PM)
It's the people that DON'T worry about it that get in trouble! You're going to do just fine.

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