..buying a brand new vehicle

[killa kali]

I've been looking in buying a brand new vehicle. I'm 19 years old and i haven't bought anything involving my credit. Can people give me information in buying a new car? Explain to me about loans, APR, interest, down payment, etc. Or link me to a site that explains it all?

 

edit; Actually, i've bought a computer with payments involving credit. Costs 1200$ and only owe 450$ left, been paying 100$ monthly.

[Garfield 2]

Is a new car really necessary? You can get finance on used cars as well.

[killa kali]

Is a new car really necessary? You can get finance on used cars as well.

I've bought 2 used cars in the past 2 years and all i get is broken things every month and end up paying more than i should have to. I rather buy a brand new car ya know. Plus, there's this personal favorite lol.

[Kaj.]

I'd probably get in touch with Tuff Luv Capo if you can. I know he's pretty young and had quite a few newer cars over the years, he'd probably know a thing or two about all that stuff.

[BCspeed34]

If you do end up going for a new car, I suggest leasing one out before buying one. If you end up liking the car so much you want to own it, you can continue making payments on the car until it's yours.

[Lurch]

 

Is a new car really necessary? You can get finance on used cars as well.

I've bought 2 used cars in the past 2 years and all i get is broken things every month and end up paying more than i should have to. I rather buy a brand new car ya know. Plus, there's this personal favorite lol.

What cars? What years? What specific model/engine/transmission? When were they bought? How many owners did they have. What went wrong with them? So many factors there. I'm suspecting an idiot owner was the root of their problems.

 

Buying a new car is stupid imo. Majority of depreciation is in the first 2 years. Best to buy a 1 owner car that's a couple years old. Lot of people that just want new things and trade in every year so you can get some decent deals on what they get rid of. Unless this is the first year of the car you want, I don't see any reason in buying new.

 

Leasing is also incredibly stupid. Way too many restrictions. If you do decide you want to buy the car after the lease, you'll end up paying a good deal more for it than if you had originally tried to finance. If you decide you don't want it when the lease is up, than you're left with nothing to show for and nothing to sell. Money pissed away.

[sivispacem]

Buying a new car is stupid imo.

This. Unless your rolling in it, and can afford to purchase without finance or without going through the hire-purchase route, then you just end up being a slave to the interest rates. For someone young, who, unless they're in a well paying job with good job security, a mortgage, and the suchlike won't be able to get competitive interest rates, you'll end up paying something like 20% over the cost of the car on a two or three year finance deal. Then you end up with a car that's half the value of the one you've spent the last 3 years paying for.

[killa kali]

You've all brought up good points, i'll have to put some serious thought into this. I tend to jump to conclusions right away when i should give myself a few weeks. I actually love the look of the car i own right now, but it seems every month something new needs fixture. Though i guess i'd pay less rather than risking myself into debt for a few years with a newer model..

[AndrefromEstonia]

I think waht you said, that you have bought used cars and had to mend them all the time...you just bought cars that were: 1) with sh*tty quality and were with sh*tty quality even when they were new, 2) bought a newer car very cheaply, meaning it had lots of faults and thats why it was cheap, 3) bought a car and didn't really payed attention to the parts that may have bad quality and may ware out in the time, 4) just didn't think about any of this and bought the car because it was cool looking and cheap.

My family have never owned a new car, too expensive. I don't get why you should waste money too. Like previous guys here said, 1 owner on a car and complete history of the car known and no considerable faults on it...thats the way to go. First thing always when buying a used car, is to have it checked by a professional.

[Zyo]

 

Buying a new car is stupid imo

 

Yeah if you must have a new car at least consider getting a "nearly" new vehicle from a dealer, still under manufacturers warranty. Something under 3 years old. The new car depreciation factor when you drive it out of the showroom is huge. Sure it'll feel good doing it, but its not worth it in the long run for a car you'll likely be paying for for years. Especially if you are still a teenager.

[leik oh em jeez!]

 

Lot of people that just want new things and trade in every year so you can get some decent deals on what they get rid of. Unless this is the first year of the car you want, I don't see any reason in buying new.

This. I know a guy that buys a brand new black Silverado K1500 Crew Cab 6ft bed every year. Takes care of them, drives like an old woman, and basically buys a new one whenever the new car smell fades away. Looses money every year, but he still does it simply because he can afford it. You can probably find a low mileage car still under warranty for 2/3 the price of a new car, and still get financing.

 

Remember that when buying a new car, you'll owe more than the car is worth the second you drive it off the lot.

[Los Santos Pedestrian]

Buying a used car depends on your budget. If you have about 20-$25,000, you can buy a Nissan Versa or a VW Jetta, which cost less than 20 grand. You can also get other sedans like the Kia Rio, Toyota Yaris, Chevy Sonic or Avevo for less than $20,000. I'm guessing since you're 19 that's your budget.

[Fozzy Fozborne]

No offense Killa, but if you don't understand down payments, APR, and financing, you're not ready for a new car.

 

That said, if you're going to do it anyway, there is really no reason to get a car without 0% APR financing in America. When I was shopping, Toyota/Scion, Mitsubishi, Kia, Hyundai, Jeep, VW, and Subaru all offered me 0% APR with $0 down. I think the only people who didn't offer 0% was Honda. They offered me like 7.25% and since it was the last stop on my trip, I laughed.

 

I wound up with a 2011 Mazda 3, financed the entire purchase with $0 down (why wouldn't I? It's free financing and that money's currently earning over 7% in a money market fund.) I chose the gap insurance because I realized that If I totaled it, I would face a major financial loss, plus it was like $400 spread over 5 years.

 

Major considerations for me:

I'm 20 and I have a credit rating of 760 and a cosigner with a credit rating of 780.

I had three credit cards under completely my own name which have been paid off in full on time for the last two years.

I've never had a late bill or overdraft on my account.

My current car had a trade-in value of $4000 otherwise I wouldn't have done it.

I have enough cash to cover the entire loan right now, if worst comes to worst.

 

Some tips

Keep in mind the insurance is sky-high on a new car! Check some quotes before even taking a test drive.

Think about where you will be in 5 years (or however long your loan duration is)... in a good-paying job? I don't know your financial situation, but I certainly don't know where I will be when my loan expires.

Find the car you're interested in, for example a Mitsubishi Lancer GTS. Go to Mitsu's website and configure it to give an idea of how much it will cost. When you're done configuring, click "EST payment calculator" and fill in what you know. "Cash down (down payment) is how much you are willing to give to the dealer the moment you sign the paperwork. The trade in value is... well the amount you will get for your car. (Check KBB.com for an estimate, also check out how much they say to pay for a new car.) The term is the duration of the loan and the APR is the interest %age. The longer the duration, the lower the payment. The lower the APR, the lower the payment.

 

Strongly consider (and actually do the math) for the incentives on cars. A Toyota was offered to me at 0% APR (vs 6% APR) OR $3000 back. I think the 6% was... oh I don't know like $1750 so I would have taken the $3000 and pocketed the change. Plus that's $3000 RIGHT NOW (well... it's a rebate so it's 2 months or so from now, but it's better than having to wait 5 years to save $1750). So that money can go into a high-yield account and make you money (you might even make more than $3000 out of it if you play your cards right.) To figure this out, it's a TVM equation where you're solving for the future value of money and you know the N (number of payments... 36 for a 3 year loan, 60 for a 5 year loan, etc), present value (sticker price or quoted price), interest (X% or .0X%), the payment, the payments per year (N) and the compounds per year (one). If you calculate that out, you can get how much your car will really cost you with interest.

 

DO NOT forget about taxes, title exchanges, licensing fees, registration, environmental charges, advertising charges, and a whole lot more that goes into it. It's not just a 20 thousand dollar car, it's actually quite a lot more than that.

 

Well, this post is certainly long enough. I'm going to bed.

[killa kali]

No Fozzy, I understand what you're saying, thanks. I've put thought into this and decided to just fix up my current vehicle, eventually i'll end up fixing everything wrong with it and end up with a decent car in the long run.