WWYD? Buying a car.

[Night Elf]

I'm buying a car today. My ds is buying my 2008 Hyundai Sonata and I love that car. I had no mechanical problems, only driver mistakes. So I'm thinking I'd like to have another Sonata. It happens to be the end of the year, when supposedly it's easy to make a deal on the year ending vehicles because they want them off their lot. Is there truth in that? The dealership has both used and new 2018 Sonatas. The new ones have some kind of discount, doesn't say what it's for but even the used cars have the discounts, and the new ones have a rebate and a final price. So that's a discount off MSRP and a rebate. What are the chances of bringing them down even more? They have two that are $20K that we'd consider for $18K. The used ones I see online are $15,500 and $17,800. Both are 2015 models. 

So... would you try to make a deal on the 2018 and drive off the lot in a brand new car, or stick to a used vehicle? If new, how do I know what is a reasonable offer they would accept? I have $5K for a down payment and we'd take whatever financing they can find. Both DH and I have excellent credit so that's not a problem. 

[Night Elf]

Just adding I looked at Kelly Blue Book and their fair price is $22K so the dealership is already $2K below that.

[DawnM]

Check the interest rates and run some numbers.  Usually the used vehicles. have higher interest rates.  We found that the "bottom line" of what we will pay in 5 years (or however long it is) was MORE with a used vehicle.  If you are paying cash, which we have also been able to do on a couple of occasions, then you may be better off with used, although those used prices sound high.

[Night Elf]

4 minutes ago, DawnM said:

Check the interest rates and run some numbers.  Usually the used vehicles. have higher interest rates.  We found that the "bottom line" of what we will pay in 5 years (or however long it is) was MORE with a used vehicle.  If you are paying cash, which we have also been able to do on a couple of occasions, then you may be better off with used, although those used prices sound high.

I can get a reasonable rate with my credit union. We're not pre-approved but that's not a problem. Once, DH bought a car and then refinanced with our credit union for a lower interest rate. We can't pay cash outright. We only have $5K for a down payment. We tend to drive cars until they absolutely need to be replaced. This is a special circumstance because ds22 just got his drivers license and he needs a car. We figure he'd do better buying my car that has a known history record then to buy a cheap used car. We originally bought my 2005 Sonata in 2006 with less than 20K miles on it and it's been a great car.

[DawnM]

3 minutes ago, Night Elf said:

I can get a reasonable rate with my credit union. We're not pre-approved but that's not a problem. Once, DH bought a car and then refinanced with our credit union for a lower interest rate. We can't pay cash outright. We only have $5K for a down payment. We tend to drive cars until they absolutely need to be replaced. This is a special circumstance because ds22 just got his drivers license and he needs a car. We figure he'd do better buying my car that has a known history record then to buy a cheap used car. We originally bought my 2005 Sonata in 2006 with less than 20K miles on it and it's been a great car.

 

Have you actually looked at your loan interest rates?  I am part of the teachers' credit union and a new car is at 2.75%.  Used cars are at 5.25%.  

Based on that, a used car, 18K car is $2,500 in interest, making the car $20,500

A new car, $20K, is $1400 in interest, making the car $21,400.  

A 900 difference total, but you get a NEW car with almost no miles.  

[Night Elf]

My credit union website says new and used cars have same low interest rate, 3.74 percent for 48 months. The dealership suggested 4.18 for a 48 month purchase. 

The car I'm looking at has a discount rate off MSRP and a rebate but when I try to calculate payment, it doesn't show the discount off MSRP. It shows $1000 bonus cash added to the $3250 rebate. Add that $4250 to our $5000 down payment, and the total to be financed is $16,554. They say the monthly payment would be $375. 

The used car I like the best is a 2015 for $15,500. Same interest rates as above for 48 months. It says no offers, just my down payment. So the finance amount is $11,299 and the monthly payments would be $256. It only has $13K miles on it though, so it must be a former fleet car and may be in rough condition so we may look at one that is higher cost.

Thankfully DH knows about this stuff but I'm trying to figure it out so I can have an idea of what to expect. DH is the kind of guy to get up and walk away if they won't offer him the deal he wants. So we'll end up another dealership, which wouldn't be awful but I might end up with a different car than the Sonata I want.

[DawnM]

6 minutes ago, Night Elf said:

My credit union website says new and used cars have same low interest rate, 3.74 percent for 48 months. The dealership suggested 4.18 for a 48 month purchase. 

The car I'm looking at has a discount rate off MSRP and a rebate but when I try to calculate payment, it doesn't show the discount off MSRP. It shows $1000 bonus cash added to the $3250 rebate. Add that $4250 to our $5000 down payment, and the total to be financed is $16,554. They say the monthly payment would be $375. 

The used car I like the best is a 2015 for $15,500. Same interest rates as above for 48 months. It says no offers, just my down payment. So the finance amount is $11,299 and the monthly payments would be $256. It only has $13K miles on it though, so it must be a former fleet car and may be in rough condition so we may look at one that is higher cost.

Thankfully DH knows about this stuff but I'm trying to figure it out so I can have an idea of what to expect. DH is the kind of guy to get up and walk away if they won't offer him the deal he wants. So we'll end up another dealership, which wouldn't be awful but I might end up with a different car than the Sonata I want.

 

Sounds like you have made up your mind.  Enjoy

[Night Elf]

3 minutes ago, DawnM said:

 

Sounds like you have made up your mind.  Enjoy

Not really. I still don't know if it's best to buy the new car or the used car. We can afford the payments for the new car but is that  a wise use of our money? That's what is bothering me. If the used car for $15,500 doesn't work out, the next car I'm interested in is just over $17K. It also has higher mileage but has more bells and whistles which doesn't impress me. I just want a fair buy.

[DawnM]

1 minute ago, Night Elf said:

Not really. I still don't know if it's best to buy the new car or the used car. We can afford the payments for the new car but is that  a wise use of our money? That's what is bothering me. If the used car for $15,500 doesn't work out, the next car I'm interested in is just over $17K. It also has higher mileage but has more bells and whistles which doesn't impress me. I just want a fair buy.

 

Pretty much only you can answer that.  We have bought new and used based on various criteria.  It just depends.  We often would rather buy new, because, like you, we drive them forever, and knowing the history is important.  Some of those used cars on the lots are actually prior rental cars, and we don't want to deal with that.  I just got a car this summer, a Mini Cooper, with 85K miles on it, but it was my cousin's and we knew the history.  It is a 2010 but still runs very well and no issues.

[Carrie12345]

IME, the end of the year is still the best time to buy (mine is 4yo today!) but there isn't as much wheeling and dealing these days as there was when my ex was selling cars 20 years ago. I got a decent price, but nowhere near a steal like I got in 2003. I had dealerships competing for my sale back then. 

Dh bought his car last year. I was in charge of negotiating b/c I love it.  I bombed at 3 used dealerships and we finally chose to go new at almost sticker price (with the advertised incentives.)

[Night Elf]

2 minutes ago, Carrie12345 said:

IME, the end of the year is still the best time to buy (mine is 4yo today!) but there isn't as much wheeling and dealing these days as there was when my ex was selling cars 20 years ago. I got a decent price, but nowhere near a steal like I got in 2003. I had dealerships competing for my sale back then. 

Dh bought his car last year. I was in charge of negotiating b/c I love it.  I bombed at 3 used dealerships and we finally chose to go new at almost sticker price (with the advertised incentives.)

Yeah, the first thing I'm going to do is pull up their website on my phone and show them the discount price off the MSRP and ask if that's still valid, in addition to the rebate. The first page giving you the prices list both the discount and rebate. It's when you go to their pre-purchase page that the discount drops down to $1000 from $4,300. That's a huge difference. 

Is using Kelly Blue Book fair? They suggest the same car is $22K and that's $2K above what their sticker price says.

[Carrie12345]

3 minutes ago, Night Elf said:

Yeah, the first thing I'm going to do is pull up their website on my phone and show them the discount price off the MSRP and ask if that's still valid, in addition to the rebate. The first page giving you the prices list both the discount and rebate. It's when you go to their pre-purchase page that the discount drops down to $1000 from $4,300. That's a huge difference. 

Is using Kelly Blue Book fair? They suggest the same car is $22K and that's $2K above what their sticker price says.

I think you HAVE to use KBB.   But you need to be sure you're using all the same bells and whistles. I think the only "real" deal I got for my minivan was getting the higher trim for about the lower trim price. Of course, in the last days of the year, it was "leftover" inventory. They didn't have a lower trim available for me.

[Splash1]

If you have a Costco membership using their buying program can save you several thousand dollars.  We have done this several times, very easy.

[gardenmom5]

it's been years since dh was in banking - and in dealer loan files so being very familiar with just how much mark up there is on a car (and there is A LOT more than most people think!) - you can do research and find out what different options should cost. - or even do kbb/edmunds for the car that you want in the 2018.

 

but the biggest piece of advice - KNOW what you WANT, and KNOW how much you are *willing* to pay - and be prepared to walk away. 

remember, unless you have the title in your hot little hands, it's not your car.  (I"m saying this because I was listening to a woman complain the dealer wouldn't let her "have her car" - honey, you don't have signed papers for it yet, it's not your car)  - however, dealers don't want people to walk out.   and if they know they have a potential sale and will buy at your price , they will hmmm, and haw and try not to drop.   But if you are willing to walk away from them, they will drop to keep you.

dh took mom to negotiate a car for her.  they wouldn't drop his last $60 (after dropping several thousand).  so - he headed for the door.  they dropped.

 

oh - I just want to add - I despise the costco auto buying program.  people think it's a deal - it's a great deal for the dealer.   (my last new car was considerably less than the 'costco' price.)

if you can find an auto merchant, they can offer better deals on new cars than you're likely to get from a dealer.   if you want a dealer, -look for one with a very large stock of the car you want.  they will be much more willing to move to move the car.

[unsinkable]

Ive always heard with a new car purchase, you find out how much the dealer paid and then offer $500 to $1500 over their price, depending upon the value of the car.

Also, the worst things you can do is be committed to any particular car and let the salesperson know that. And, don't get into a monthly payment discussion. The discussion/negotiation is the price, prior to any trade-ins or down payments.

[Storygirl]

DH does the car negotiations for our family. He's found that going through the dealer's online program has worked well for him. He's been able to get a better deal online than in person.

I don't mean buying it online. He still goes in to the dealer to purchase it. But all of the negotiating is done online instead of in person. He finds that the sales people who handle the online inquiries cut to the chase and drop to the best deal faster than the in-person sales staff.

ETA: This works well for new car sales, where he already knows what he wants to buy and has already visited a dealer to test drive. He walks away after the test drive, then looks for the best deal online by contacting all of the nearby dealers to see who will offer him the best price for the car he wants.

Edited December 30, 2018 by Storygirl

[unsinkable]

Also factor what adding your DS to insurance is costing you.

Unexperienced male driver under 25 is expensive. And in my state, he'd be the primary driver on a car...since you will now have 3 cars. It is usually more to add a primary than it is to add a secondary. I'm not sure if that is true in all locales and with all companies.

[DawnM]

33 minutes ago, Storygirl said:

DH does the car negotiations for our family. He's found that going through the dealer's online program has worked well for him. He's been able to get a better deal online than in person.

I don't mean buying it online. He still goes in to the dealer to purchase it. But all of the negotiating is done online instead of in person. He finds that the sales people who handle the online inquiries cut to the chase and drop to the best deal faster than the in-person sales staff.

ETA: This works well for new car sales, where he already knows what he wants to buy and has already visited a dealer to test drive. He walks away after the test drive, then looks for the best deal online by contacting all of the nearby dealers to see who will offer him the best price for the car he wants.

 

My husband does this too, and looks up fleet pricing?  I really know nothing about it.  He negotiates all of it.

 

[mommyoffive]

Maybe not the best, but we go with new.   You get a car with no miles, hopefully farther away from any service issues, new tires, we don't have to worry about the background.  If it came from a flood or something like that. 

[history-fan]

I went through this process this past summer. I watched different sites like :cars, car fax, and car max to learn about different prices etc. Several dealers I went to said sticker price is final price no negotiation, and I drove to nearby smaller towns when I saw their prices were lower. It was a learning experience- now when I’m driving I see cars and have an idea of the cost.

 

[Catwoman]

Buy the new car. It’s worth the relatively small difference in price to get the full manufacturer’s warranty.

[Night Elf]

I went for the used car. I got a 2015 Sonata SE with only 13,200 miles for $14,500. We got the dealer to come down $1,000. After the dealer agreed to $14,500, DH tried to get another $500 but the dealer said no. It's a certified pre-owned vehicle with low mileage so we decided we had a good deal. The only downside is it's white and I'm worried it will look dirty all the time. I do not wash my car on a regular basis. But the interior is nice. No damage, not even dings on the body. The carfax was clean. And it's got Sirius XM radio which was one of the most important features I wanted. I would have dealt without the XM but I'm very glad I got it.

We settled on the price before they even asked if we had a trade-in or what our down payment would be. When financing, they gave us exactly what our credit union would have which kind of made me mad that they didn't even try for better but oh well. The monthly payment is lower than we budgeted for, so we're all good.

As for adding ds22 onto our insurance policy, our monthly payment only went up $80. DH was expecting it to be higher so he's okay with that. He'll call the insurance company tomorrow to add my car onto the policy.

[Angie in VA]

I hate it when I do this (but totally understand when others do it, really!) but I haven't read the responses. I just wanted to say to check w/ your insurance company how much it will cost to insure this vehicle. We always have to factor that into our being able to afford a car, even though the last several we have bought were used. 

 

[Liz CA]

I would buy used due to the rapid depreciation. Especially since it sounds like you are not paying cash. Lower loan amount, lower interest rate, faster pay-off ,etc.

[AmandaVT]

1 hour ago, Night Elf said:

I went for the used car. I got a 2015 Sonata SE with only 13,200 miles for $14,500. We got the dealer to come down $1,000. After the dealer agreed to $14,500, DH tried to get another $500 but the dealer said no. It's a certified pre-owned vehicle with low mileage so we decided we had a good deal. The only downside is it's white and I'm worried it will look dirty all the time. I do not wash my car on a regular basis. But the interior is nice. No damage, not even dings on the body. The carfax was clean. And it's got Sirius XM radio which was one of the most important features I wanted. I would have dealt without the XM but I'm very glad I got it.

We settled on the price before they even asked if we had a trade-in or what our down payment would be. When financing, they gave us exactly what our credit union would have which kind of made me mad that they didn't even try for better but oh well. The monthly payment is lower than we budgeted for, so we're all good.

As for adding ds22 onto our insurance policy, our monthly payment only went up $80. DH was expecting it to be higher so he's okay with that. He'll call the insurance company tomorrow to add my car onto the policy.

 

Congratulations! My last two cars have been off-white and silver and they show much less dirt than my old navy blue car did. I hope you love it and it sounds like you got a great deal!

[mommyoffive]

Congrats on the new car.  Awesome job getting a deal. 

[Janeway]

14 hours ago, Night Elf said:

I'm buying a car today. My ds is buying my 2008 Hyundai Sonata and I love that car. I had no mechanical problems, only driver mistakes. So I'm thinking I'd like to have another Sonata. It happens to be the end of the year, when supposedly it's easy to make a deal on the year ending vehicles because they want them off their lot. Is there truth in that? The dealership has both used and new 2018 Sonatas. The new ones have some kind of discount, doesn't say what it's for but even the used cars have the discounts, and the new ones have a rebate and a final price. So that's a discount off MSRP and a rebate. What are the chances of bringing them down even more? They have two that are $20K that we'd consider for $18K. The used ones I see online are $15,500 and $17,800. Both are 2015 models. 

So... would you try to make a deal on the 2018 and drive off the lot in a brand new car, or stick to a used vehicle? If new, how do I know what is a reasonable offer they would accept? I have $5K for a down payment and we'd take whatever financing they can find. Both DH and I have excellent credit so that's not a problem. 

Congrats on the newest vehicle! 

Edited December 31, 2018 by Janeway

[Splash1]

Maybe the Costco buying program works better in some areas or with some cars more than others.  Dh tried to buy/negotiate price for Sienna at three dealerships in our area before we tried the Costco program.  They beat our best price by $2500.