Car sales and finance Questions GALORE

I'm gearing up to purchace a "new" car. It will be my first time doing it (my dad bought my current car for me from a friend while I was in college).

I'm a little scared of the process. (I feel like a spaz who is scared of everything lately)
Anyway,
Are there sales at certain times of year, every year?
I would like to get 0% financing (I'm pretty sure our credit is good enough)- is there a time of year to expect that sort of offer?
If that doesn't happen; does a bigger down payment make for a lower interest rate?

How do I estimate how much I can afford (realistically)? I have never had a car payment before. Right now our income exceeds ALL our expenses by $400-$600 a month. How big of a payment is Ok for us?


I'm going into this with a relativly short list of acceptable cars (based on safety info alone) and I want to really check each of them out in person to see if they would meet our needs as a growing family (right now we have one kid going on two, with plans in 5ish years to add numbers 3 and 4).
What should I take into consideration when looking at features and such? Is leather worth the extra cost?


ANY tips whatsoever are appreciated.

Synchro246 said:

I'm gearing up to purchace a "new" car. It will be my first time doing it (my dad bought my current car for me from a friend while I was in college).

I'm a little scared of the process. (I feel like a spaz who is scared of everything lately)
Anyway,
Are there sales at certain times of year, every year?
I would like to get 0% financing (I'm pretty sure our credit is good enough)- is there a time of year to expect that sort of offer?
If that doesn't happen; does a bigger down payment make for a lower interest rate?

How do I estimate how much I can afford (realistically)? I have never had a car payment before. Right now our income exceeds ALL our expenses by $400-$600 a month. How big of a payment is Ok for us?


I'm going into this with a relativly short list of acceptable cars (based on safety info alone) and I want to really check each of them out in person to see if they would meet our needs as a growing family (right now we have one kid going on two, with plans in 5ish years to add numbers 3 and 4).
What should I take into consideration when looking at features and such? Is leather worth the extra cost?


ANY tips whatsoever are appreciated.

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It is such a personal process that it is hard to give advice, but I can tell you what I did. I purchased my first new car last February.

I went to the dealership knowing that I could put down a certain amount of money. I chose the car I wanted and the features I wanted, then sat down with the finance person. He told me if I financed my particular car for 66 months instead of 60, I could get a lower interest rate that would actually turn out costing me less overall. So, I financed for 66 months.

When I get my tax return back, I am planning on applying all of it towards the principal so that I will hopefully have the car paid off in about 4-4.5 years instead of the 5.5 years it would normally take.

I would sit with a calculator and crunch numbers. Sometimes there are great deals out there!

That would be great if you could get 0% financing! My credit is good, but I wan't able to do that. That would be fantastic!!

Good luck and congratulations!!

The 0% deals often require a top tier credit score and a certain length loan (like 36 months instead of 60 months) to qualify for the 0% rate. A lot of the financing sections of car manufacturer's web sites have finance calculators you can experiment with a bit, and there probably are some calculators on other sites like cars.com, edmunds.com or carsdirect.com. Car manufacturer's and auto research/shopping sites can also be useful to find out about current incentives or financing specials in your area.

The 0% financing deals sprung up after Sept. 11 and were almost a constant offering among the domestic brands for a while, but now aren't such a continual thing. It's often easier to get a better deal or find the lower financing rates/incentives on some models toward the end of a model year when dealers are anxious to move out their existing inventories in the summer and fall, or when a major redesign is about to launch for a particular model and the manufacturer wants to clear out the previous design's inventory. I also associate the 0% deals/red tag sales with winter weather in my area, where the auto sales tend be generally slower.

Happy shopping.

People used to say that the best times were in the last couple days of the month, quarter, year or all three. That's when some salesperson and dealer incentives expire and supposedly you might get a better deal if they are motivated to hit a quota.

I always tell people to start at www.carsdirect.com. It has a great configurator that lets you select the exact model, options and packages you want. When you are done, it gives you an actual price for which you can purchase the vehicle and tells you what incentives are in effect. This price isn't usually the best price you will see, often far from it. On the other hand, you should NEVER pay more than this number. Otherwise, you just buy from carsdirect.com and they will deliver it to you through a local dealer- perhaps the same one who claimed they couldn't match that price lol.

You can also try buying services through banks, clubs, wholesale stores (Costco, Sam's) and online. They will also give you a similar price that isn't great, but also isn't bad if you just want to be done with the haggling process.

As for financing, always do the calculators yourself and go in with another pre-approved loan from your bank, credit union or maybe an online financer like eloan. If the dealer can beat it, great. If not, you don't have to accept whatever deal they offer. Keep in mind that not all loans are created equal. You want a "Simple Interest" loan, the type usually offered by banks. Many auto financers like GM use a different method that loads up the interest payments at the start. If you get a 0% deal or take the whole term of the loan to pay of the car, then you could care less about all this. On the other hand, if you have the going interest rate and pay off the car halfway through the loan, you could save a lot of money with the simple interest loan.

As for leather, it's nice, but I don't find it as great as many say it is. I was just as happy with the cloth seats in our last vehicle. We had spills and food on them plenty of times and they looked fine when we sold it.

We just bought a new car a few weeks ago. We got a very low interest rate through our credit union - 1/2 the interest rate of what the dealerships wanted to charge. If you are eligible for a credit union, join one and then turn around and apply for a car loan. That's what we did. Most folks are eligible for credit unions and don't even realize it - where we live, there are ones for living/working in certain jurisdictions, etc, then others for areas that are "underserved" regarding credit unions.

So check out that route before going to a dealership...

BTW, here is a link to search for a credit union, if you're interested:

http://www.ncua.gov/indexdata.html

I've bought 3 new cars. . .done well, done not so well. I'm embarrassed to admit that COLOR was a deciding factor in my last purchase (and even one of the primary reasons I was shopping for a new car).

I hate to bring up the name, but Consumer Reports DOES have good advice for purchasing a car.

Usually, the new model year vehicles come out in July/August. Some say that August/September is a good time to buy the current model as the dealers are trying to "make room" for the new models.

Basically, know what you want and how much you are willing to/can pay (maximum) before you go to the dealer to talk purchase.

With that in mind:

Decide the features you MUST have vs. optional (side curtain airbags, antilock brakes, etc. vs. DVD player, power seats). Learn what packages are what/the price difference is between them. . .LX/EX,XLT etc. so you can "talk the talk" with the sales staff. (All the car makers have this on their web sites.)

Find out the dealer price (think dealer COST - what they paid for the car) from online car buying sites. Negotiate your cost from there. ALL retailers use their cost as the bases for pricing. When buying a car, you're trying to limit the profit they make on you (any of the car buying car sites will tell you what is a 'reasonable' profit for a specific vehicle).

Ask about car loans at your bank or credit union.

Call your insurance agent. Ask for a quote on the cars you're interested in. (My new car actually costs LESS per year than my previous one because of the safety features and the make.)

Take your time (Despite what the dealer may tell you, you have plenty of time).

Get any deal in writing and "sleep on it."

If the salesperson makes you uncomfortable, LEAVE. Come back another time and hopefully someone else will help you. Conversely, if you find a salesperson you are comfortable with, get their name/card so you can ask for them again.

Test drive the 2-3 cars you are interested in. Make sure to get in and out of the various seating positions, open/close ALL windows and doors. [I had my heart set on an Accord but after I drove it, I wasn't nearly as enthusiastic.]

Bring your car seats and look for LATCH/tether anchors - are they where you want/prefer them - can you get a good install?

Establish PRICE, THEN talk financing. (They will try and put the two together. Just say you already have financing available.)

Establish PRICE, then talk trade in. (Tell them your neighbor, sister, cousin is interested.)



Happy Shopping. If you do your homework, it's not as 'scary.' You'll have already MADE the big decisions. Now you're just working on the details.

Thanks for all the great replies!

Is there anything specific I should do during a test drive? What should I "test"?

Another thing I'd recommend is to check if your local dealerships have internet sales capability. I've found it to be so much less hassle. The last car I bought, I emailed the dealership, because I found a used one. I had also emailed the other 3 VW dealers here, with the specs of a new model. They all replied within 2 days, and the one I finally bought from matched the lowest price quoted. Of course, the quote was under what Edmunds lists as TMV. I went with the dealer that I did because they gave me the least hassle with the test drives. I drove 5 cars, one after the other, without the sales guy tagging along. He also had them lined up for me, with the keys in the ignition. How nice.

I'd also recommend www.edmunds.com for research. They also have a calculator for what they call "true market value" for both new and used cars, though I won't vouch for its accuracy. There are adjustments for both color and location, but there are so many other factors involved. But it will certainly give you a ballpark.

Let me second the recommendation for the internet salespeople. They are often able to give you much better deals than the salespeople in the brick and mortar store. The downside is that once you've dealt with the real-life salesperson, you generally can't switch to the internet person at the same dealer. If you have only one dealer in the vicinity, that makes it tough. Obviously you can't do test drive over the internet, nor can you do a test drive without talking to a salesperson. If you live in a metro area with several dealers, do your test drive through one dealership, and then see what the internet people at the other dealers can do for you. Also, keep in mind that dealers can normally do trades with other dealers to get you the car you want. It's a minor inconvenience to them, but it's not normally that big of a deal. It does mean that your car will come with a few extra miles on it, since it has to be driven from the other dealership, and you may have to pay for a few small things you don't want (though you can try to negotiate these away). But often this is necessary if you don't want the fully loaded versions of cars that your dealer may have on the lot and want to sell you.

When we are buying cars, I first do research to figure out which cars interest me, and which options I want. I drive the various versions that are on the lot--sometimes features that look good on paper are not good in real life. (For instance, you may think you want a sport-tuned suspension until you drive it over a few potholes.) Once I figure out exactly what I want, I ask the dealer where I've done the test drive whether they can get the car I want (if it's not on their lot, which it's usually not) and for what price. I then email or call other dealers within a reasonable range to get their quotes on that vehicle. (This is where the internet salesperson comes in handy.) I then go back to the dealer where I test-drove the car and ask them to match the lowest price. If they can match, beat, or come pretty close, I buy the car there. If they can't or won't come close, I buy the car from the dealer with the lowest price. Because I live in a major metro area with lots of dealer options, this works well. It obviously won't work for everyone.

As for test driving, I would at least try to drive it both during the day and at night. Of course if you can manage to drive it in both dry and rainy/snowy conditions, that's helpful. By all means, drive it on many different kinds of roads, and try to park it into a fairly tight spot. Things like turning radius can make a big difference in your daily life. You want to know what it will be like to drive this car in your ordinary life. And bring carseats to see how easy it is to install them, and how easy it is to get kids in and out of them. We all know how much *that* affects ordinary driving.