For brand new cars you have:
MSRP - Manufacturers Suggested Retail Price. The MSRP is listed on the window sticker ("sticker price"), and details any dealer-installed options, preparation fees, destination charge...
Invoice price refers to what the dealer paid the manufacturer for the car. However, auto manufactures sometimes supply a discount off the invoice price (factory incentives) - often depending on supply and demand, oversupply restructuring, etc...
Then you have the market price, which refers to what others are actually paying for that car in your area.
I don't know where TDI Volkswagens stand for "market price", I assume they are fairly popular. Sounds like yours is fully loaded.
Generally speaking invoice price, excluding manufacture discounts, is approx. $1,000 less than MSRP. Ohhh, though I could be wrong.
Then you have tax, title - and with such an expensive car, that adds up.
Yes, you are approved for $36,000, but as you realize the LTV will play a huge factor. I think you will have a hard time with the blank check considering the unpaidoff trade-in. Can you exclude the trade-in, and continue to pay it off?
@dnbluprints wrote:Hello myfico forum peoples!
I've lurked these forums for quite a while and it has been really helpful in increasing my own FICO score. So for that thank you! Now for my question.
My girlfriend and me are looking at purchasing a new vehicle, specifically a 2013 VW Jetta TDI. She was promoted at her job and needs to travel an hour and a half for a few months. Our current car is adequate but needs a lot of work to maintain these miles and has overall been a nightmare so we would really like to get into something else. We applied for the Capone Blank Check and were approved for 36,000 for 4.5% apr. Since this has come at us quickly, our savings has been dedicated to our move to a rental closer to her job so in our budget we haven't planned a down payment although its not like we couldn't adjust a few things if we had to. I'm a little confused regarding the LTV that I'm seeing. I get that a used car some states use the NADA or some the Kelley Blue Book value to determine the cost Capone will finance over with dealer markup if you get 110% but what exactly should we expect at the VW dealership for a new vehicle? We have to be prepared because the dealership is around 4 hours away. We are looking to trade our current car which does have a buyout of around 3k left on the loan. I get that a LTV limit will be in place which dictates % over and the car is valued around 28k via Kelley and the dealer is asking around 28k, but what is considered "dealer invoice"? I guess I'm nervous we are going to get amped up and get to the dealer and find out we need 2-3k down plus tax, tags etc. which will really hamper our savings.
We haven't been to the dealer yet but any help in preparing would be great. Thanks.
I've used the blank check before and it's a pretty painless process. The limit is 110% regardless of new or used. If there is a dealer markup your going to pay it, and don't do it. Paying a dealership markup on a popular model is one of the most hurtful financial decisions you can make. It's going to put you upside down for almost the entiriety of the loan. Are you $3k in the whole on the trade in or is that just what's left? If the latter do you know how you standing is with owed to value? If you are in the hole and their is a mark-up you are going to have to come up with some cash. What I've found to work well is figure out exactly what you want and email that info to the internet department of several dealers getting their bottom price. Let each one know you are doing that so they will give their best deal. I've found it a good way to do away with haggling. Also take a look at Edument TMV to get an idea of what is a fair price for your area.(They also give you invoice pricing, even for options and most dealer accessories) For instance the Nav model in my area is going for $25k.
All that said, let the dealer run your credit. 4.5% with capone is a good rate for them. You will likely qualify for captive offers. If not they have a lot of other lenders they have access to you don't. If you are a member of a credit union try with them. If not, consider joining one. I believe DCU is at 1.99% and open to anyone.
Have you considered hybrids? With her driving that far fuel costs are going to be substantial. The TDI gets good mileage but the higher diesel costs really take a huge chunk out of that savings. Have you considered a hybrid? You could pick up a Fusion Hybrid in that price range and get a lot better mileage. Go with a lower spec model and a Jetta Hybrid is doable. They will give 13 and 11 MPG better respectively with a lower cost of fuel using gasoline rather than diesel. With the advent of hybrids desiels have really missed their time, until they do diesel hybrids. Of course their are the Prius's but I just can't stand the look of them, and at only 3MPG better than the Ford I'll take it's good looks. Captive offers in my area are .9% for 60 months of VW Diesel and 0% for the hybrid up to 60 months. Ford is doing 0% for 60 months or 1.9% for 72 months.
Keep up updated and let us know what you end up with. Good luck!
@dnbluprints wrote:Thanks a lot for the quick replys.
The amount owed on our old car loan is about 3k on our loan and it's a 2005 Subaru Baja Sport in "ok" condition. We are in the middle of nowhere and the town she works in is also in the middle of nowhere lol. The drive is basically an hour to the nearest town then another 30 minutes to the town she works. We live in Wyoming =D so I don't think a hybrid would work very well, not sure anyone here knows what that is unless it's something they can haul on their pickup trucks lol..I'm prepared to pay for taxes etc. but I wasn't sure about a downpayment with the Capone check. I'll talk to the dealers and explain what our situation is. I'll report back with what happens, thanks for the feedback.
EDIT: as far as the trade-in, we could pay it off but as much trouble as it's been and all the changes we are facing, I think it is better to let it go. It needs about 2-3k in repairs to private sell without taking a big hit. There are like three auto repair shops close by and they all love to overcharge.
A hybrid isn't an electric car. A hybrid is a gas car like any other car out there. It just has electrical motors and batteries as well. The motor charges the batteries as well as some other technology that recovers energy during break. The gas motor is shut off at stop lights and other tech that improves gas mileage. You put gas in it like anything else. It just gets really really good gas milage. Take the Fusion vs. the Jetta TDI. You cost is pretty much a wash. The Ford gets 13MPG average better and uses significantly cheaper fuel.
