Buying a used car

[pylon]

Originally Posted by Frequitude

Is that the case for all auto loans? Can I just pay off the balance whenever I want? My compensation is pretty lumpy, so I'd be in a position to put a good chunk down early next year (the plan was originally to buy a car then...though I have been saying that for 5 years!). If so does that lower your payment or just shorten the term?

Any loan sourced through anything classified as a bank is considered a 'conditional sales contract'. In Canada it is illegal to charge a discharge fee or charge unearned interest on the payout. If get your payout from them, it is principal only on the remaining balance. At worst you'll be charged a $35 discharge fee. Scotia is the only bank doing this, and most credit unions charge $10. It's just to cover the lien release process. You can challenge it successfully almost every time though.

Where it can get muddy, is leasing, and some of the subprime lenders that are labeled as 'finance companies' or even in house plans. Sometimes the language in their loan agreements is very vague. And some subprime lenders do leases with tiny residuals on them, like $200, so they can charge you a penalty to buy them out. But try and sell them as loans. Which they are not.

But if you are taking a conventional loan, it will be labeled as 'loan agreement or 'conditional sales contract'. In either scenario, you cannot be penalized or charged interest to pay it off at any time.

[Dion]

Originally Posted by pylon

Not everyone has 30 g's burning a hole in their pocket.

And contrary to popular conception, dealers want you to finance, and will be more flexible knowing you are. Having cash in hand never gets you a better price. Maybe 20 years ago, but not anymore. Yes you pay interest, but there is nothing stopping you from taking a loan, and paying it off in 6 months. And in a scenario like that, the interest is only a few hundred dollars in many cases, yet you saved another 800-1000 on the car by doing so.

Can you explain further why cash doesn't get you a better price.

[pylon]

Originally Posted by Dion

Can you explain further why cash doesn't get you a better price.

I already did. Loans = more revenue for the dealer 9/10. Even if your taking 0%, most people are more likely to add a warranty or some accessories... Whatever it is, if they can spread it out.

[bc-chris]

Originally Posted by pylon

Then finance. The only big advantage to leasing if you know you're gonna own it long term, is the fact you can walk away if you're in a huge wreck the first 2-4 years. But now, there are a ton of products you can buy from either your insurance company, or the dealer, that will compensate you if you have a huge claim and diminished value. So that benefit is essentially moot now. Plus leasing usually carries higher interest rates anyway.

And one thing. Especially if you're financing. If the perfect car comes along, and it's no more than 5-10% over your budget, just buy it. If you are financing you are talking 1500-3000 spread out over 5-7 years, it makes little or no impact on your monthly budget.

I have seen so many people walk away from the perfect car, only to come back a week later saying "I shopped all around, and your car is still the one I want." "Sorry sir, we sold it 3 days ago."

And then the cycle of insanity starts again. And now your time is costing you money. When I was on the sales floor, and I had that perfect car but it was just out of range after all the haggling, I'd say "Look, I don't have a used car factory I can call to order you up a <40,000 km, silver, 2009 Civic SI with a power sunroof, red interior stitching, and a faux carbon fiber hood."

If you do not exceed your budget by more than 10%, you are doing better than 90% of shoppers.

i've been looking for a used truck for a little while now that my youngest is approaching a year i need to be able to take both kids in my vehicle. my current truck is a two seater. we were able to make it work when i'd only take out our oldest, but that is no longer the case.

i knew exactly what truck and options i wanted to get and was having no luck. i found one in ladner bc and one i calgary.... both of those are quite a drive from kelowna to see/test drive a vehicle.

two weekends ago i was going by the local chev dealership and went in to pretty much give the guy my name and number and tell him what i was looking for and to give me a call if anything came in (i regularly check their used inventory and they did not have what i wanted). i actually think i started off our conversation with, "i'm not driving out of here today with a truck."

so i tell him exactly what i want and he motions to a truck in the parking lot and asks, 'what about that one?' .....aaaahhhhh crap! apparently it came in on the friday and they hadn't added it to their webpage yet. it was 99% perfect. it was missing one feature that was not a deal breaker. i drove the truck home 3 days later on tuesday (the dealership needed a couple days to get the windshield replaced and the box sprayed with a bed liner).

the price was definitely fair - i had done my homework and knew what price range the truck should be in and it was actually on the lower side which was nice.

but yea - all that to agree with pylon - if you find the vehicle you want then get it, becuz it will likely be gone. the salesman showed me a different truck on the saturday that came in that he wanted to buy and some guy was buying it when i picked up my truck - it was pretty funny, the salesman was choked! ha!
**i do want to add that i'm not encouraging you to spend waaaay beyond what you can afford to get your dream vehicle. i knew what i wanted and what i could afford and what to expect the price of the truck to be.


and with the financing... we dipped into our line of credit to cover what we didn't have in our savings. the dealership offered us financing but their rate was substantially higher than our line of credit (i think 2% more than our LOC)

[I_H8_Crawford]

Originally Posted by Delgar

There is always a cost to taking a loan -- or as its called in this thread, financing.

While a financing package might be best for your own needs, paying cash you will end up ahead 10 times out of 10.

Normally I agree that cash is king, however if I have $30K to spend on a car, and the dealership has say a 1% financing deal... I would be better off financing that car and investing my $30K... I would come out well ahead in that scenario, so financing CAN be advantageous, not to mention the fact Pylon mentioned RE: better deals for finance.

[Frequitude]

Thanks so much for all the advice in this thread. Based on my driving tendencies (don't drive much, will own it til it dies), it sounds like buying and financing is the way to go (sorry Delgar). I'll probably go with used, unless there really is some amazing financing alternative for a new vehicle. Will report back after I go this weekend.

I imagine the following step will be looking for some advice on how the buying process and how the heck to actually negotiate over a car. Not "OMG tell me what to say to get the best price". Just general strategies, things to watch out for, warranty packages, rebates, upgrades, etc.

[Sliver]

Piggy-backing on this thread - what are your guys' thoughts on my below plan? The lease on my work truck (F-150) is up in a couple of months. I was planning to email a Dodge, Ford and GM salesman with a list of all the crap I want and just tell them to email me back with their best price.

I kind of prefer the GMC right now as I'm just getting out of four years with an F-150 and it would be nice to have something different, but I'll take any of those three brands that will give me the most bells and whistles for the money. I know Chryslers suck balls, but I think they can last four years so on a lease it doesn't matter. Resale is irrelevant and the warranty will cover any problems the entire time I'm driving it.

Is that a reasonable way to negotiate given I'm not loyal to any one brand?

[Lubicon]

Originally Posted by Sliver

Piggy-backing on this thread - what are your guys' thoughts on my below plan? The lease on my work truck (F-150) is up in a couple of months. I was planning to email a Dodge, Ford and GM salesman with a list of all the crap I want and just tell them to email me back with their best price.

I kind of prefer the GMC right now as I'm just getting out of four years with an F-150 and it would be nice to have something different, but I'll take any of those three brands that will give me the most bells and whistles for the money. I know Chryslers suck balls, but I think they can last four years so on a lease it doesn't matter. Resale is irrelevant and the warranty will cover any problems the entire time I'm driving it.

Is that a reasonable way to negotiate given I'm not loyal to any one brand?

My experience with the past two vehicles I have purchased is that dealerships are not at all interested in negotiating or even talking to you via email, they want you to come in person. I've sent the same emails and probably 75% of them did not even bother to respond. The others took their sweet time getting back to me and most of the time tried to get me to come down in person to talk. Zero times did they actually give me a price on a vehicle I was interested in even if I asked them about one in particular. Hope you have better luck with it than I did.

[Sliver]

Damn. I guess the cheap-skate alarms will be going off with that email, eh. I wouldn't think it could hurt to just fire me back a price. I might just try it anyway, but we'll see. Definitely not worried about negotiating in person, but thought this could be a good way to get a smokin' deal.

[Fuzz]

You could try that email, but throw in that you would like to schedule an appointment and want them to have all the details figured out before you show up. Shows you are serious, and they might make a quick sale.

[GreatWhiteEbola]

Found a pre-owned SUV for ya!

2011 CADILLAC ESCALADE 700 HP LUXURY EDITION

[ken0042]

I think email would be better after you have been to the dealership. I can't see anybody taking it seriously when the initial contact is over email.

[Sliver]

Originally Posted by ken0042

I think email would be better after you have been to the dealership. I can't see anybody taking it seriously when the initial contact is over email.

Yeah, good call. I'll do exactly that.

[Canehdianman]

I've bought my last 3 vehicles exclusively through email. walked in, signed docs and walked out.

I always made sure to be clear on what I was looking for (I had the exact model/trim/everything I wanted set out). You will need to 'convince' them that you are serious and aren't just wasting their time.

I was also armed with invoice cost, and told them what I expected my price to be. When I started out, I was asking for invoice +$500. Depending on the responses I got (I usually email every dealer in Southern Alberta), i would adjust accordingly.

Every dealership nowadays seems to have an Internet Sales Manager to handle these deals, so they are definitely becoming more popular.

[CarlLester]

Me too. Last two vehicles purchased solely through email.

[burn_this_city]

Email works fine from my experience. Helps avoid the bull#### full court press some of the guys like to put on.

[heep223]

Originally Posted by Frequitude

Old faithful is a 98 Cherokee Sport, so Pylon if you're out there let me know if you want a second project! Heck, I might not even trade it in. I might just say **** it and get my mechanic to put a couple grand in it and make it awesome for beating around in if needed.

Erm...uhh...is your cherokee auto or manual?

This was my first vehicle which I have a soft spot for, and I've been looking for one forever to work on myself and fix up...

[Frequitude]

Originally Posted by heep223

Erm...uhh...is your cherokee auto or manual?

This was my first vehicle which I have a soft spot for, and I've been looking for one forever to work on myself and fix up...

Automatic. Not a lot of rust. Fire me a PM.

[heep223]

Ack. Looking for stick. My search continues...

As to the topic at hand, buying a used vehicle is up there with getting a root canal or a colonoscopy. I can't stand dealerships. I can't stand dealing with kijiji/autotrader bs. Actually maybe it's just people I can't stand.

[pylon]

Originally Posted by Frequitude

Old faithful is a 98 Cherokee Sport, so Pylon if you're out there let me know if you want a second project! Heck, I might not even trade it in. I might just say **** it and get my mechanic to put a couple grand in it and make it awesome for beating around in if needed.

I'm frikkin Jeeped out for the time being, but there is oodles of cool XJ stuff out there. And some of it is ridiculously cheap. You can find piles of stuff even on kijiji. I've learned rattle can bedliner can make any used part look awesome with a bit of grinding and sanding. Make your own project out of it, and build yourself a couple day a month off road rig. Or a bad ass winter beater.

Those things are as bullet proof as they come, especially if it's a 4.0L inline 6. Once you militarize it, it feels like a totally new car. lol