Buying a brand new vehicle. Never done it. Need advice.

[Ark]

I sure did benefit from Deb&Al's post about whether or not to pay off the debt, or keep the money in savings....

We NEED a full size pick up to pull the trailer, haul goats, etc. We've been doing without while we save our money.
After we get our tax refund next year DH wants to buy a BRAND NEW TRUCK! (A Chevrolet Colorado) He's never in all his 40 something years had a new vehicle and he wants one. I want him to have one too, but the interest rates and jacked up prices on new vehicles really scare me. Seems like a big rip off.
I vote for getting a slightly used "like new" one that will cost considerably less.
However, I cant talk him into it. We'll be able to put about $6000 down.

I suggested that we use what we have saved right now and buy "any old truck" that runs and will pull the trailer. Then, we can save for a year, and sell that truck and buy something better, etc. etc. etc. Now, we really do need a truck that will seat 4 people, so if we bought a truck that was not extended cab, it would only be a temporary fix. BUT, just think of how much we would save in interest!

I'm really TERRIBLE at math, but I need some help showing him in numbers how much we could save.

Thanks for any help or advice.
ARK

[AngieM2]

You need to check out the interest rates on the new truck, opposed to the interest rates on a used vehicle. Sometimes makes a difference.

And if you do this, better on the end of the month, end of vehicle year when the newest ones are about to come out. Will get a better deal.

And it's fun to have two places to get the same vehicle, and let both know that you are looking at the other - they will be more willing to make a deal.

And know your vehicle, sometimes I've known more about the specs than the salesman I was working with.

As to your particular situation, others here have more dealing math experience and how to describe it to you.

Angie

[cfabe]

Well, a Colorado is not a full-size pickup first off. Might be adequate for your needs, though, check the tow ratings and the trailer weight.

With the vehicle market like it is, there are some good deals to be had on new vehicles. With the domestics they are still doing 0% financing, and if you are not picky about the vehicle and don't need unusual options, if you buy out of dealer stock at the end of the model year, you can find some good deals.

Of course along with the weak new vehicle market is a weak used vehicle market. Shop around and see what you can get, but on a used vehicle you're going to be paying 5-8% interest or more if your credit is not great. So if you are financing the vehicle, a more expensive new truck at 0% might be the better deal in the long run. Do a google search for a loan calculator, you can calculate what the payments on a loan will be given the interest rate, and then you can add up the total of the payments to see what the loan "costs" you.

For example:
$20,000 new truck at 0%, 5 years, payment is $333, total cost $20,000
$16,000 used truck at 8%, 5 years, payment is $324, total cost $19,440

The finance cost of the used truck loan is $3440. Total cost is almost the same as new. So in this case, why not get the new one and have a newer vehicle with a warranty that will be trouble free for longer.

Now of course if you want to consider a truck that's more like 4-5 years old instead of "almost new" then you'll save more money. But there will be more maintainence and repairs. If you're handy and don't need a totally reliable vehicle, this can be okay. But for some people a new car makes more sense.

If the vehicle is for occasional local use, and repairs can be done yourself, a 'beater' truck might be a viable option too. But don't buy a $2000 truck fooling yourself thinknig it won't have problems and will never leave you stranded.

[agmantoo]

Ark, you are IMO absolutely correct with your thinking in NOT buying a new truck. There are plenty of formally owned trucks for sale at significant discount that will be "new to you". Take the savings in the price difference and invest the money is something that will generate a return. Wealth is generated by creating a return whereas the vehicle for personal use is just an outgo! Are you familiar with the rule of 72? If not I suggest you Goolge that and read. Read it to hubby too.

[tyusclan]

I agree on buying used. I've only bought one brand-new vehicle when I was very young, and I'll never do it again. cfabe's illustration is correct if you only consider the financing. If you factor in depreciation the new vehicle will still cost you a lot more. If you buy a new vehicle at 0% that depreciates 15% the first year, you've paid 15% interest on that vehicle. If you buy a used at 5% and it depreciates 5%, you've only paid 10%. I've found that the ideal age to buy a vehicle is about 5 years old. At that point you have at least half the life left in the vehicle, and they're about a fourth of new price.

[1GandJ1]

Good luck with your decision on your purchase. I have had the greatest experience in the last 3 years with buying all my vehiles used through the GSA government sales. Anyone can buy you don't have to be a dealer. Here's a link for the July auctions. There should be one near you. The last vehicle I got was a 4 year old Ford F350 Super Duty 4 door extended with 60,000 miles $ 8,000. Haven't spent a cent on it and it runs great. The government department maintain their vehicles very well. Better then 90% of private users. Hope your next vehicle is great either way!
http://www.autoauctions.gsa.gov/cali...n=showcalendar

[clovis]

I am all for buying used when possible. Sometimes, however, it is nearly impossible to find a QUALITY used vehicle at a FAIR price.

My wife and I were in the car market last fall. I really consider myself to be a savvy car shopper. We were looking to buy used, with low miles, at a fair price. I literally couldn't find anything that was a good deal to us. I talked with several folks about the same time, and they agreed that the market for great used was very tight!

We eventually bought a new 2006 Chevy HHR, and I am pleased with the decision. EXCELLENT gas mileage, new car warranty, five star crash rating, no repairs, new tires, etc. It has also been fun to own a new car, which was a first for me.

We were able to get .09% financing on a 3 year loan, due to a GM incentive.
The used cars we looked at was 9.9% and up, depending on the banks we talked to, and we have excellent credit. Compare this savings if you can.

Also, remember that you can get a full sized Chevy for less than the new Colorado trucks, depending upon the dealer and options on the truck. In the Indy area, one dealer is advertising full size Chevy trucks for $11,500, plus frieght and sales tax, with a total about $14000. This is a real deal, because we almost bought one. Had over 75 at this price on the lot.

Get lots of quotes from any dealer you can AFTER YOU HAVE CHOSEN WHICH CAR YOU WANT TO BUY....colors, options, etc......then call around.

clove

[crystalniche]

When buying a truck/van it makes a very big difference if you go for one with the tow package. Even tho we tow nothing my DH always does this because you get a better truck for less money than you would if you bought it plain. Our ex-boss's father was very high up in the Ford Motors company and we learned this from him. Even the transmission lasts longer before you have to do anything to it. We bought 2 vans this way and used them really hard fully loaded with magazines in delivery. One got 495,000 miles and the other got 325,000 before the transmission needed anything. When I say fully loaded I mean from floor to ceiling in bundles from back doors to the back of the seats. We had to beef up the springs some to do this. While we wouldn't do that job again it was fun because we got to travel all over NY & New England dropping them off to the store drivers.

[TexasArtist]

you may also think about what will you pay in insurance each month or for the year.

[Ark]

Originally Posted by cfabe

Well, a Colorado is not a full-size pickup first off. Might be adequate for your needs, though, check the tow ratings and the trailer weight.

You are right! I meant we need a bigger one than the tiny little Nissan truck we have which cant pull much more than our EMPTY trailer. It doesn't actually have to be FULL size, just bigger. LOL. DH feels that a Colorado would do the job.

Thanks everyone for all the replies - I am still reading through them.

[Ark]

Originally Posted by cfabe

if you buy out of dealer stock at the end of the model year, you can find some good deals.


For example:
$20,000 new truck at 0%, 5 years, payment is $333, total cost $20,000
$16,000 used truck at 8%, 5 years, payment is $324, total cost $19,440

.

Thanks for putting those examples in there!

When the heck IS the end of the model year??

DH is very good at fixing mechanical problems.... but he has his heart SET on a new vehicle. IF I can possible dissuade him, it will only be by showing him the numbers.

[Ark]

TexasArtist - good thought about the insurance! VERY important as we really have to watch it on our monthly payments.

crystalniche - I didnt know that about the towing package. That's good to know, tho. Thanks!

clovis - thanks for pointing that out, and for sharing your experience. We will definitely do some shopping around. I vote for leaving the kids with a grandparent so we dont have to hurry up to the tune of "I'm hungry" and "I'm tired!" LOL Maybe I can compare local prices on the full size vs. the Colorado. thanks!

1GandJ1 - thanks for the link, but I couldnt get it to work!

tyusclan and agmantoo - thank you both for your input. I'm going to have to print all this out for hubby. heh heh!

[Gideon]

We will never buy new again-EVER. First year the depreciation is @25% of value. That plus collision and taxes on new is terrible. We buy @5 yrs old and pay cash. No collision and the depreciation is only @ 5%. Sell in 2-3 yrs and only lose 10% of what you paid plus driving very economiclly. For my work trks, they are all over twenty yrs old and we just keep them serviced-engines-trannys-brakes-etc. and get along just fine. Paying the bank big interest and the insurance co.s big bucks just goes "against the grain". If one just has to "keep up with the Joneses" then buying new/big is just for them.

[quietstar]

You have receved some good advice. When I buy new, I gather enough information to know exactly what I want. A visit to Edmunds.com provided accurate dealer costs to include options. Discount and incentive amounts can be factored in. I have found it effective to fax a written proposal to buy, detailing the vehicle you want, offering to deposit $1,000.00 if they agree and letting them know that you have purchase money arranged and are not in any hurry. Car salesmen hate it which confirms that I'm on the right track. I do well dealing with the "fleet sales manager" as they seem to have more latitude than most salesmen. Remember that the more time and trouble they invest in negotations, the more likely they are to move your way just to get the deal done. Good luck...Glen

[Hoop]

Another thing to crunch numbers on is vehicular insurance. When I purchased my toyota tundra new in 2001, the insurance premium was close to $500 every 6 months. Now that it is 5 years old, my premiums have dropped to $323 every 6 months.

If your hubby's heart is set on a purchasing a new vehicle, he probably won't be happy with anything BUT a new truck.

Here is how to buy a NEW vehicle.
DO NOT visit a dealership in person. Nowadays, you can buy a vehicle over the Internet from the comfort of your home, without all the BS that some dealerships put their customers through.

First of all, know exactly what make/model/trim/options/color/etc you want. Visit KBB.com autobytel.com edmunds.com or a plethora of similar websites. These will let you know almost exactly what the dealership pays for the vehicle, what incentives are available, dealer profit, and what one might expect to pay for it.
Do extensive homework on the vehicle you wish to buy. Take the time to educate yourself. One of the most informative articles I've ever read about dealerships was written by a journalist that went "undercover" and became a car salesperson for 6 months at 2 different dealerships (US vehicles/Japanese vehicles).
You can also use these websites to see what, if any, problems particular vehicles are cursed with. Knowledge is power.

Then check financing terms. If your credit is great, you may be able to get 0% or some low rate financing. If your credit is not so great, shop around. Car dealerships are notorious for using financing of vehicles as profit centers. Again, check financing from the comfort of your home rather than being lambasted in a dealership office.

Now that you're fully knowledgeable and ready to buy a specific vehicle. You can easily "put yourself into play" as a ready buyer. KBB.com Edmunds.com or autobytel.com all have links to your local dealers and will request a price quote from all local dealers within, say a 200 mile radius, for the vehicle you seek.
Being the well informed buyer you are, you now choose which dealership offers you the best price. You simply notify the dealership that you would like to purchase the vehicle. You walk in with check in hand from your finanancing source and should be in & out of the dealership within an hour.

[Ark]

Originally Posted by Hoop

Nowadays, you can buy a vehicle over the Internet from the comfort of your home, without all the BS that some dealerships put their customers through.

Now, THAT is the best news I've had all day!!! It makes sense, but I had never thought of it, or known anyone who bought a car that way.
Thank you!!!!

[TSYORK]

FYI

Chevrolet is supposed to be offering sometime in July "Zero Percent for 72 months" so hold off a few days if you can...

[comfortablynumb]

the only benifit I can see from buying a new,is that you can be unreasonably anal about maintenence [like me] and make it last forever, plus its under warranty for X number of yrs.

however...

a 2 or 3 yr old truck with super low miles that checks out as being super duper clean and taken care of will be much cheaper.... and if it looks and smells new, whats 20, 30, or 40k miles? its just broken in for you.
and.... most factory bloopers show up in the first 30k miles so think of it as it being "thoroughly tested".

since gas has gone up ive seen alot [I mean, alot] of big trucks only a few yrs new sitting with for sale signs in them.

personally i think it saves far more to maintain an old one than to pay monthly for a new one.

but if he wants a brand new one, there is that "I can keep it maintained in pristien condition forever" idea.

if you get a new one, switch to high grade full synthetic oil AFTER youve broken in the engine with regular oil. the thing will last alot longer, and it will prevent the engine from ever getting "gunked up" with sludges and varnish.

[clovis]

I will say that we tried the internet route when we bought new. I am pretty skeptical....out of the twenty emails we sent, only five of the salesmen ever called us back, and four of those were just courtesy calls. None of them really wanted to deal!!!!!!!!!

Can I make a suggestion???? Call Bob Poynter's GM in Seymour, Indiana. Ask for Bob....he is a super nice guy. You will need to know what Model, color and options you want BEFORE you call. In my experience, this is the best way to deal with Bob. The best part is that they don't play games!!!!!!!!!

Example (all made up, but you will get the point): Colorado, midnight blue, gray interior, four door extended cab, package A (includes power windows and remote locks.), two wheel drive with V6 and tow package.

Let him find the vehicle, and give you a quote. I bet $10 no one else will be his price, or even match it. They can ship the car to you, or find one in your area.

Let me know if you want his 800 number.
clove

[comfortablynumb]

btw I bought a NEW car ONCE.... in 12 yrs the engine ripped itself apart, the unibody core rotted, [screw you, rusty jones rustproofing] and it ended up chopped for parts.
12 yrs.

it lasted a whole 12 yrs.... wow.