gabex

iTrader: (2)

Please forgive me if this is posted in the wrong section. I haven't been the the org in a long time. I am looking at retiring my 95 Maxima and looking for a 6th gen currently.

Background:
Let's say I've been driving the same car since I turned 16 (now 25) and it has lasted til now. I was given a 1995 Nissan Maxima with 82k miles when I turned 16. I think we got it for $7200 at the time. Car ran great for as long as I can remember. Had a few O2 sensors go bad, replaced spark plugs, did breaks a few times, fluids, filters, tires regularly, etc. And then in my last year of college, my car repeatedly got broken into. Let's just say I was left with only about half of my dash. And then a lady hit my car causing $1000 in damage, and I had to use the insurance check to pay rent for a few months. I ended up using a rubber mallet and suction cup and doing a decent job fixing myself (but not perfect).

From my senior year of college, to now, I really haven't had money to get a new car. I also didn't care about maintaining my current car as I looked at it was a beater car by now. It slowly started running badly, but running. It still gets me A to B. In the last 3 years I have only put $1000 into the car including maintenance and repairs. I change the oil when I remember, which is maybe every 3000-6000 miles? (yes, I know bad). I haven't changed any other filters, and I know I could use new spark plugs and probably coil packs. I've bought "used tires" 3x at $80 for all 4. I've had to replace a control arm due to a pothole, 2 batteries, and a power steering pump.

Other than the above, the car still ran, despite the lack of even simple maintenance. Long story short, its a tank. I've been driving with a bad wheel bearing for probably a year now, and it finally gave out. I am going to replace the whole front knuckle with a used part from a junker.

Time to get a new car:
So I am looking at getting a new car in the next couple months. I am finally in a financial situation that will allow me to afford a car payment (recent job promotion). To put it simple, I do not want to buy some Econobox, nor am I trying to get a car out of my means. With the experience and trust that I have with my Maxima, I am thinking of going for another. This is where my question comes in. I would have to finance the car.

When I first got out of college, I was turned down for car financing saying that I didn't have enough credit or job history. I was trying to get a 2000 Maxima that was $10,000. However, they approved me for a 2008 Pontiac G6 brand new, which I did not want.

I now have 3 years job history, but in the time being, I did incur 1 bad credit incident (which should be handled by time I go to buy a car). I don't know my actual credit score right now though. Other than student loans, my only other debt is a credit card that I am sitting at about $1000 balance and a $1500 credit limit. I plan on paying this off by the end of the year.

My financing options, I assume, would be
1) from the dealer
2) from my bank
3) from a credit union

I've been told the best bet is to sign up for a credit union and try to get a loan through them.

On a used car, what kind of term and interest rate would I be looking at? I would assume that it would depend on the year, mileage, price of the car, etc. I had played with a car loan calculator and decided I don't really want to spend more than $250/month on a car payment. I came up with these options, and used 7% and 9% interest rates.



1) $12,500 loan at 7% interest for 60 months = $247.51/mo
2) $12,000 loan at 9% interest for 60 months = $249.10/mo

* This is assuming they would do a 60 month loan for a used car. If I go this route, I would be looking for an 2004-2006 with 60k or less miles.

3) $10,500 loan at 7% interest for 48 months = $251.44/mo
4) $10,000 loan at 9% interest for 48 months = $248.85/mo

* I would really only go this route if a 60 month loan would not be approved, but the age/mileage of the car would go up slightly

5) $8,000 loan at 7% interest for 48 months = $191.57/mo
6) $8,000 loan at 9% interest for 48 months = $199.08/mo

* Obviously the age/mileage would go up quite a bit, but I would not buy with more than 100k miles. Would I even be able to get a 48 month loan for this?

7) $8,000 loan at 7% interest for 36 months = $247.02/mo
8) $8,000 loan at 9% interest for 36 months = $254.40/mo

* Probably more reasonable than 5&6 in the term of the loan I would think, but I don't know. Also, key in point, 5-8 would be cheaper to insure by about $50/mo.


Also, aside from the financing aspect, what are the thoughts on buying a 2004-2006 with 60k miles vs a 2002-2004 with 80-100k miles? I feel like with the first option, I won't really have to worry about repairs, or maintenance, but I'll be paying more on the total loan, as well as probably more per month, and higher insurance. On the second option, I may have to put some money in small repairs, but the car payment and insurance would be less or would be paid off sooner.

Any input is greatly appreciated as I go off to the junker to get a part for my sweet 95 Maxima with 170k miles riding strong despite not getting any love.

phatboislim

iTrader: (27)

cliff notes

gabex

iTrader: (2)

Cliff notes: With "OK" credit, to finance a car... what is the input on the following options

1) $12,500 loan at 7% interest for 60 months = $247.51/mo
2) $12,000 loan at 9% interest for 60 months = $249.10/mo

* This is assuming they would do a 60 month loan for a used car. If I go this route, I would be looking for an 2004-2006 with 60k or less miles.

3) $10,500 loan at 7% interest for 48 months = $251.44/mo
4) $10,000 loan at 9% interest for 48 months = $248.85/mo

* I would really only go this route if a 60 month loan would not be approved, but the age/mileage of the car would go up slightly

5) $8,000 loan at 7% interest for 48 months = $191.57/mo
6) $8,000 loan at 9% interest for 48 months = $199.08/mo

* Obviously the age/mileage would go up quite a bit, but I would not buy with more than 100k miles. Would I even be able to get a 48 month loan for this?

7) $8,000 loan at 7% interest for 36 months = $247.02/mo
8) $8,000 loan at 9% interest for 36 months = $254.40/mo

* Probably more reasonable than 5&6 in the term of the loan I would think, but I don't know. Also, key in point, 5-8 would be cheaper to insure by about $50/mo.

phatboislim

iTrader: (27)

first...are you going through a credit union?

gabex

iTrader: (2)

I would prefer to go through my bank or a credit union. A dealer financing would be the last resort. I am not a member of a credit union, but could join, setup my direct deposit, etc.

gabex

iTrader: (2)

Also, along with the financing questions, I guess I'm also up in the air about if it would even be worth doing options 5-8 (in terms of the car being older, more mileage, prob would include more maintenance, etc).

phatboislim

iTrader: (27)

go through a credit union, the offer better rates. as far as how long your term is, check your finances and see what you can afford in the best and worst scenario (keep your job and lose your job) and find out whats the fastest/shortest payment term that fits your budget, and go from there

i say the shortest term as well, from exactly what you said...do you want to owe on a car thats an 05, lets say...you have a a 5 year term..that takes you to 2016, in a 2005 car. are you comfortable w/ that? compiled w/ the possible future issues that come w/ it?

SteveB123

iTrader: (2)

#2-$3000 in interest.
#8-$1150 in interest.


Pay the lowest interest on a depreciating asset!

gabex

iTrader: (2)

I would agree that I don't think I want a 5 year term either, but if it meant a newer car with less miles, I would consider it. The way I saw it was

1) 06 with 60k miles in 5 years = 10 year old car with 100k miles
2) 04 with 80k miles in 4 years = 11 year old car with 112k miles
3) 02 with 100k miles in 3 years = 12 year old car with 124k miles
*assuming 8k driven per year

Option 1, at the end of the term, I would still have a pretty good car, with resale value, or the option to continue to drive it. Maintenance would probably not really even be an issue, aside from more tune up type work.

But it dwindles down with each option. Option 3 would be paid off the fastest, and say I kept it for another 2 years (length of term in option 1), I would have a 14 year old car, with 140k miles. The car probably wouldn't be worth more than a $2-3k, and would probably need some maintenance.

gabex

iTrader: (2)

Makes sense, I agree. My first time purchasing a car, just trying to make sure I understand and think everything out.

Do you think a bank/credit union would have issues financing a car that is almost 10 years old with 100k miles?

gabex

iTrader: (2)

I guess I could see what I get approved for and then go from there? Like I said, I'm new to this and have only tried one time before (3 years ago) and I wasn't that serious at the time. It was more like if I got approved, I'd do it, but now I am ready.

phatboislim

iTrader: (27)

CREDIT UNION CREDIT UNION! you can compare teh rates, but credit union will almost always give you a better rate. and you may not be able to finance the car itself, but you could use it as collateral = higher rates

gabex

iTrader: (2)

I understand credit union will give better rates... I am not disagreeing with you or not acknowledging that

phatboislim

iTrader: (27)

thats cool. the credit union i'm with, in order to get a loan with them all i had to do was have a savings account 'cost' $25 to open up (deposited in the savings account). go get the rates/prices they are talking abotu the cars you are looking at, do what you need to, to open an account...and have at it, bruh

SteveB123

iTrader: (2)

No idea.

How much is your downpayment?

phatboislim

iTrader: (27)

credit union i've dealt w/ you dont have to worry about 'downpayments' unless the car is significantly worth less than the price. doesnt knock that he cant pay on the actual price in cash and just finance the remainder

MadMax07SL

You're looking at this whole thing from the outside, without considering what's really important...Calculating the payment should be the after-thought. There are three primary things you need to get right up front.

1. Getting the BEST price on a reliable car.
2. getting reasonable price for the trade-in,(although the way you described it, You'd be lucky if they offered you $500.)
3. lowest possible interest rate period!!!

Remember, even after you talk them down on the sticker price, there's still plenty to add on from tax/tag,title, dealer fees...consider all that up for negotiation when working them down in price. I've had warrantee's or gap insurance discounted or thrown in as part of the negotiation, and dealer fees removed. In the end, you want to walk out knowing you paid the best price you could choke out of them. Even after all that, know that they still made money off of you or they would not have accepted the deal. So don't feel bad.

Getting a great interest rate can be done at the dealer as well, and going through their financing might help with price negotiating believe it or not, since they will get a small kickback from the finance company. You could always refinance with your CU for no extra fee after the fact. 5.5 is a good rate, 4.5 is hard to get on a used ride. Sometimes a credit union may throw down like a 3.5% offer, but usually that's only available for a 2 year refinance or something promotional, or maybe only for new cars.

Getting the right car is important. Low mileage, some remaining warrantee, even if it's drivetrain only. The 07-08 max has a 10 year 120000 mile warrantee on the CVT transmission. The 04-06 has seen many failed transmissions. For a few thousand more you might find an 07 at a good price, knowing you're covered for at least the CVT. That can also work to your benefit when negotiating an extended warrantee price...tell them hey, if the CVT is covered by the manufacture, why am I paying this when I should be paying that for the extended coverage?

Remember, calculating the payment is an after-thought. Get the best bang for buck, that's what you need to be focusing on right now....

gabex

iTrader: (2)

I'm looking to put $1-2k down regardless of whichever option I take

gabex

iTrader: (2)

I think you have a point.. find the best car for the value, and then figure out how it can work into my budget.

I guess my thought process was kind of along the lines that I can afford X per month, so I can afford these scenarios, and to choose, I have to say
1) car with fewer miles, more expensive, pay longer, less maintenance, would last longer
2) car with more miles, less expensive, pay shorter term, possibly more maintenance

MadMax07SL

That exact mentality is what the dealer salesmen prey on. They start by talking about budget, what you can afford...all the while they're masking how much money they're profiting while appearing to be your best friend. Remember, it's a business transaction, these guys aren't your friend, and you'll do just fine.

SteveB123

iTrader: (2)

Of course they don't!

The more $ financed, the higher the profit.

phatboislim

iTrader: (27)

i'm aware of that

MadMax07SL

I missed this earlier.

You don't need to put a single dollar down. However, some finance companies will offer the better interest rate if you put money down...example, 100% financed, they'll offer you 7.9. Put 10% down, finance 90%, they'll knock off a percent to 6.9, make you feel like you're getting something.

Some of that is out of the salesman's control, but he can always find you another company to finance with that will give you the 6.9 on 100%. Play hardball, and NEVER put money down on a car unless you have plenty of money in the bank. That $2000 won't change your payment much, but what if you come up short one month, and you really needed that $2000 sitting in the bank...

mitrals

iTrader: (1)

Based on what you have told us, it seems like you still cannot afford a newer car. Bash me for my thinking but car payments are not the only thing that you spend on a car. You only have $1-2K to put down, do you have money for emergencies? What about the 6 month emergency funds?
Insurance/gas/maintainence all play a major part in owning a car. Here are somethings that you must consider:
1. Check your credit score. If it is low, expect to get shafted in interest.
2. A car is a depreciating asset, it will be worth lower tomorrow
3. Maintainence on the Max is high (Tires cost north of $600 a set, premium fuel is recommended, tune up at 100K miles that includes spark plugs will cost about $200-250)

I know you dont want an econobox but consider my above points before you decide to buy a newer Max

phatboislim

iTrader: (27)

how do you know that $1-$2k is all that he's putting down and he doesnt have more saved? thats a far fetched assumption

gabex

iTrader: (2)

$250/mo is all I WANT to spend on a CAR PAYMENT. Yes, I have already figured my insurance, gas, maintenance, etc. I still put 93 octane in my 95 Maxima. I understand tires will be an expense, and spark the OEM plugs are about $8/piece (if I remember correctly from when I did mine last).

I still will have some cushioning in my monthly budget, which would go to savings. I don't have many other expenses
1) rent
2) food
3) cell phone
4) cable, electric, water, trash, etc
5) gym membership

EDIT: not including my health insurance and 401k as they are auto dededucted pretax

I have no kids, and I'm single.

gabex

iTrader: (2)

But I do understand your response. When I wanted to do this 3 yrs ago everyone told me I wasn't ready and not to finance a car, so I rode mine out. I feel like I am at the point where I can finance one though.

MadMax07SL

This guy's got a beater, he needs to get out of it. He's making good money, time for a prestigious ride without paying brand new prices...he's gone this far with the financial considerations, I think he's pretty certain he knows what he can afford, and when the time comes to pull the trigger he'll make the wise decision.

I had quite a bit of liquid cash in the bank when I purchased my max. I didn't put a dollar down, financed 100% after trade-in was removed. As you put it, it's a depreciating asset, using liquid cash on the initial purchase isn't always wise, doesn't mean I was broke with no down payment.

That said, I've consistently paid $70 to $100 more for every payment for the first 2 years. Now I'm paying double payments plus $200. I'm planning on taking a 5 year loan to a 3 year payoff at 5.5% interest. Reason for the early payments, besides the obvious, it's perfectly clear that this car has maintained a considerable value compared to what I spent on it. If it should total out in a wreck, I'll be in great shape. This was my main concern since I had two Lincolns total and I lost big money on both because of their dramatic depreciation.

Since money in the bank right now isn't making money, time to eliminate debt, and save on the interest charges. That's the plan I had from the day I bought the car, but I didn't put it into play until I knew it was the wise decision financially.

mitrals

iTrader: (1)

gabex: I was just posting based on the information you provided us. If you are comfortable with the expenses, sure go ahead and buy the new max

MadMax07: Not turning this into a finance thread but money sitting in the bank does not make 5.5% in interest, so paying interest while I have money sitting in the bank doesnt make sense to me. How much the car depreciates has nothing to do with payments, so if you even total it, you would get the same amount if you paid cash or have payments. If you have payments, the car totals and you get less than what you owe, you are on the hook for the rest.

MadMax07SL

You're 100% right, thought I alluded to that in my post. Loan interest costs more they you will typically earn in savings. That's why I'm eliminating debt aggressively right now...but I'm not emptying my liquid cash just to save a few hundred, I'm doing it strategically.

The key principle to my strategy, Cash is King. If you've got it when it's needed, you never struggle. If you always spend it, never leveraging credit to some advantage, then you risk living paycheck to paycheck. People in financial trouble typically make one of two mistakes. Leverage TOO much credit, or don't use it enough, deplete all cash assets. You gotta find that happy place in the middle and you won't end up homeless one day.

thealliance43

iTrader: (4)

If your looking to get a maxima... my 2005 mint condition one will be for sale within a week or two. Either way good luck with your situation man

MullerSTR

as for me I would better save some money and buy a new car

AnnieCos990

Why wait until you can get a really profitable loan and buy a car right now. Saving money is too boring and can take too long. Instead, you can find someone to lend you some money at good prices and enjoy the car as soon as possible. Okay, a loan is always a risk, and you really can't be sure if you'll be able to repay it, but if you count all the risks you'll be safe. This site can be useful if you need: moneyexpert.com. I used to take some advice from here when I wanted to take out a loan