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New Member
SoFLGuy
Posts: 8
Registered: ‎02-05-2009

New or Used Car? Advice please!?

I was approved for an auto loan with not so great credit (barely any at all) but I was approved (and relieved)!  Although it's slightly higher than 10% I'll take what I can get and I can afford it for the car in which I am in the market.

 

Here's the 'catch' - it is on a tiered APR, with the lowest rate if I purchase a 2008 - 2009.  If I purchase a 2007 the APR jumps 3.5%.  If I purchase a 2006 -2005 it jumps another 1% and a 2004 - 2002 another 1%.

 

I'd prefer to get a brand new car (2009) however I realize the decpreciation of a new car.  I am in the market for a small compact car (preferably a Honda, Hyundai, Mazda, Nissan or Toyota).  I think my best bet would get an after market 2008 or one with low miles.

 

I'd greatly appreciate some thoughts on this.  

 

Thanks! 

 

Any thoughts?

Established Member
paydownin09
Posts: 22
Registered: ‎01-27-2009

Re: New or Used Car? Advice please!?

I'm inclined to say stick with the 08-09 models.  You do not want to be paying 14-16%, its a lot of wasted money in my opinion.  If possible try to get an Certified Pre-Owned 08 (if that doesnt come with the 3.5% increase of course) because it will probably be cheaper than a brand new 08.  These days people are getting rid of those cars because they cant afford the payments, not because they are defective.  I've had Hondas for the better part of the last 8 years (had a BMW for 6 months before I couldnt afford the gas - then went back to a Honda) Had my first Honda till it hit 177k miles then sold it still running mint, my current Accord has 83k (30 k of my own in the past 11 months)

 

A thing to remember when going in though: The price haggling does not stop with the salesman - I dropped 3.5% of my financing rate with the Finance Rep.  They are as eager to sell as you are to buy, and theres more dealers then buyers in this economy....

Valued Contributor
clocktick
Posts: 1,603
Registered: ‎12-07-2008

Re: New or Used Car? Advice please!?

I would calculate the difference between a brand new '09 versus the actual older year you may want (before interest).  Then add the associated interest rates to both and see if the higher interest rate surpasses that difference.  I would start from there.  I'd also consider paying the car off earlier and looking into other dealership options.
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New Member
SoFLGuy
Posts: 8
Registered: ‎02-05-2009

Re: New or Used Car? Advice please!?

Ok, thanks that helps!
New Contributor
kbella
Posts: 63
Registered: ‎11-17-2008

Re: New or Used Car? Advice please!?

If you don't mind my asking, who did you get approved for the loan with?  I'm going tomorrow to the credit union, and I'm so nervous we won't get approved.  Our salaries are good, but debt to income and scores aren't great.
TU-579 EX-551 EQ-562 as of 1/14/09 (ouch)
New Member
SoFLGuy
Posts: 8
Registered: ‎02-05-2009

Re: New or Used Car? Advice please!?

I went to the local credit union myself and they approved me but the interest rate was outrageous and for less $.  I got my loan from Capital One (auto loans).  You can apply on their website, they approved me the same day.  I sent in the necessary paperwork by fax the next day and they had the blank check in the mail the next day.

 

My credit score is about 626 or right around there.

 

Best of luck!

New Contributor
Zahnrosen
Posts: 67
Registered: ‎12-11-2008

Re: New or Used Car? Advice please!?

For what its worth, the depreciation on the type of vehicle your talking about is fairly low. They tend to hold their value and if you plan on driving it for more than a year or two, then depreciation becomes a smaller factor. I buy new, there's just less problems that way. And I'm willing to trade a small amount of money for less problems.

 

Just my two cents, I'm sure there are those here who would disagree strongly. 

New Member
SoFLGuy
Posts: 8
Registered: ‎02-05-2009

Re: New or Used Car? Advice please!?

kbella, how did you make out with the credit union?
New Member
SoFLGuy
Posts: 8
Registered: ‎02-05-2009

Re: New or Used Car? Advice please!?

Thanks Zahn,

 

I agree with you after shopping online for new and used.  I ended up buying new over the weekend.  Bought the 2009 Hyundai Accent GS 3 Door Hatchback.  Got a pretty darn good deal. I paid $11.7k out the door.  They gave me $500 cash back - the total cost includes tax, title, tags and dealer fees. 

 

I did my homework, and with the warranty: 5 year/60k bumper to bumper, 10 year/100k engine/transmission, 5 year roadside assistance (unlimited mileage) it was just too good of a deal and with the loan going for 48 months, it'll still be under warranty and paid for!  The six air bags also made it a great choice.  I am a huge fan now of XM radio (I'll never go back to FM, lol).

 

It's a 5 speed manual and totally fun to drive.  I know Honda, Nissan or Toyota are generally the chic pic.  I had an 08 Civic that I 'lost in a divorce' a few months back but it costed $8k more than this car.

 

The Hyundai is totally underrated and the best bang for your buck (especially in this economy) in my opinion.

New Contributor
kbella
Posts: 63
Registered: ‎11-17-2008

Re: New or Used Car? Advice please!?

SoFLGuy - went to credit union my husband was a member at through work and they quoted 19.75%!  Was shocked, our scores are bad, but still.  Ended up going through Kia and got 10.99 through Wachovia.  Not great, but what I expected and hope to refinance within the next year or so.
TU-579 EX-551 EQ-562 as of 1/14/09 (ouch)

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