So you're in the market to buy a car. You've done your research and decided you want a small sedan with automatic that gets 30mpg in mixed driving and won't cost you more than $350 a month for 5 years. After checking out all the reviews and specifications and prices on various websites like Edmund's and Vehix and MSN Cars, you've decided on a brand new Toyota Corolla LE sedan.
WHOA! Why are you spending so much money that you haven't even MADE yet? What if you get laid off in a few months? What if you take a pay cut, or have hospital expenses for some reason? Your nice shiny new car will get repossessed from you and you won't be able to go anywhere!
Let's break this down. The new 2009 Corolla and the 2003-2008 Corolla are VERY similar. You could buy a used 2003 Corolla LE with the same ABS, airbags, power windows and locks, cruise control, CD stereo, and everything else, for a THIRD of the cost of a new one! $18000 car or $6000 car. The 2009 model might cost more than $350 a month at FIVE years, and you might have to go SIX years to stay in budget. You could have the 2003 model paid off in TWO years at $350 a month even if you put very little down! And you'll still have the same reliable Toyota. Change the headlights and taillights if you want something different. Warranty? Who needs a warranty on a Corolla? Aren't you supposed to weld the hood shut on those and have the oil sucked out the bottom and refilled by a tube? Like in the commercials?
Showing posts with label saving money. Show all posts
Showing posts with label saving money. Show all posts
Saturday, November 22, 2008
Sunday, November 9, 2008
When you HAVE to have a nice car
If you're in sales, visit clients, or have to transport important people around, you can't exactly show up in a 1993 Plymouth Acclaim with peeling paint and a dented right fender. No one wants to see that (which is why we park our beaters far away from the front door where we work), so there are times when a nice car is needed. You might have different expectations of what is a "nice" car. Some of you might want what looks like a newer car. Some of you want a prestigious nameplate or brand. And some of you just feel bigger is better. I have solutions for all of you without spending many thousands of dollars, the typical down payment on a flashy new or newer car.
If you want a specific new car but don't want to spend $25,000 to get it, start looking at used models of the same car. You can save more than half of the cost of a new one by looking at a 2 to 3 year old version of it. Take for example a new Dodge Charger sedan. If you were to buy one new, let's say it's the SXT with the 3.5 engine, leather, and 18" wheels, you'd spend about $26,000 plus taxes, fees, and interest. You can start looking at used 2006 Charger SXT's. A used 2006 model can be had for about HALF price. Many are listed here in the Dallas area with 20-40K miles for $12,995 and $13,995. I found one on CL for $9,995 with 82,000 miles. Save by buying used, works every time!
Let's say you want a newer looking car but can't afford more than a few thousand, you can go with lesser known cars. You may have your eye on a nice Lincoln MKZ which is over $30,000 new, but you have your champagne taste conflicting with your beer budget. Look for a 1998-2002 Lincoln Continental. They are smooth, silky, comfortable, and offer a lot of luxury for a low price. 1998 models are easily under $5,000 while the final 2002 models don't often sell for more than about $8,000. If foreign models are more your taste, try out a 2000-2003 Nissan Maxima, a 1997-2003 BMW 5-Series, or a 1998-2003 Jaguar XJ. All for the most part under $10,000 and all look remarkable similar to other new cars.
Need a beautiful name but can't afford a beautiful (to the salesman) price? Again, you'll want to look at used models of the ones you want. A 2003-2008 Navigator will cost you much less than a new one. Modern looking S-Class Mercedes W220 sedans came out in 1999 and will cost a fraction of the new W221 model. There are so many luxury models that came out years ago but are still viable transportation today. Just because you want a luxury name doesn't mean you have to spend as much as you would on a house to get a nice car.
And then there is my favorite category, classic cars. Your neighbor may have done a full frame-off restoration of his '57 Chevy Bel Air 2-door hardtop and spent $68,000 getting all the bits together. You can still make him feel silly by picking up an older, worn, amateur restoration of a similar model. A 2-door hardtop Bel Air in decent daily driver condition can be bought for less than $20,000 easily. I found one in Colorado, was restored in the 90s and looks showroom new from 20 feet away, for $16,000. A 4-door sedan or a wagon would be even more useful for a daily commute and can be had for less than half of that. Even better, spend $3,000 and restore it yourself on the cheap, making it beautiful and functional with a newer 350 TBI engine and overdrive automatic from a 90s pickup, and you'll enjoy a classic ride and 20-25mpg!
There are lots of ways to get something nice without spending a nice amount of money. Stay tuned and I'll show you more ways to save on cars whether you want them to look nice or not!
If you want a specific new car but don't want to spend $25,000 to get it, start looking at used models of the same car. You can save more than half of the cost of a new one by looking at a 2 to 3 year old version of it. Take for example a new Dodge Charger sedan. If you were to buy one new, let's say it's the SXT with the 3.5 engine, leather, and 18" wheels, you'd spend about $26,000 plus taxes, fees, and interest. You can start looking at used 2006 Charger SXT's. A used 2006 model can be had for about HALF price. Many are listed here in the Dallas area with 20-40K miles for $12,995 and $13,995. I found one on CL for $9,995 with 82,000 miles. Save by buying used, works every time!
Let's say you want a newer looking car but can't afford more than a few thousand, you can go with lesser known cars. You may have your eye on a nice Lincoln MKZ which is over $30,000 new, but you have your champagne taste conflicting with your beer budget. Look for a 1998-2002 Lincoln Continental. They are smooth, silky, comfortable, and offer a lot of luxury for a low price. 1998 models are easily under $5,000 while the final 2002 models don't often sell for more than about $8,000. If foreign models are more your taste, try out a 2000-2003 Nissan Maxima, a 1997-2003 BMW 5-Series, or a 1998-2003 Jaguar XJ. All for the most part under $10,000 and all look remarkable similar to other new cars.
Need a beautiful name but can't afford a beautiful (to the salesman) price? Again, you'll want to look at used models of the ones you want. A 2003-2008 Navigator will cost you much less than a new one. Modern looking S-Class Mercedes W220 sedans came out in 1999 and will cost a fraction of the new W221 model. There are so many luxury models that came out years ago but are still viable transportation today. Just because you want a luxury name doesn't mean you have to spend as much as you would on a house to get a nice car.
And then there is my favorite category, classic cars. Your neighbor may have done a full frame-off restoration of his '57 Chevy Bel Air 2-door hardtop and spent $68,000 getting all the bits together. You can still make him feel silly by picking up an older, worn, amateur restoration of a similar model. A 2-door hardtop Bel Air in decent daily driver condition can be bought for less than $20,000 easily. I found one in Colorado, was restored in the 90s and looks showroom new from 20 feet away, for $16,000. A 4-door sedan or a wagon would be even more useful for a daily commute and can be had for less than half of that. Even better, spend $3,000 and restore it yourself on the cheap, making it beautiful and functional with a newer 350 TBI engine and overdrive automatic from a 90s pickup, and you'll enjoy a classic ride and 20-25mpg!
There are lots of ways to get something nice without spending a nice amount of money. Stay tuned and I'll show you more ways to save on cars whether you want them to look nice or not!
Beaters...what is a beater?
A beater is the car you drive when you no longer care what people think about your car. A beater is what the perennial Dad drives. A beater is function over form. A beater is not bling. A beater is what your parents drove when you were a kid. A beater is what you buy when you are unable to afford anything you actually want. A beater is what you should drive if Dave Ramsey told you to get rid of your Navigator.
Some cars will always be known as beaters. I will get into profiles of individual beaters in later posts. In fact I would like to profile at least one "Beater" a week so when you see it, you will understand. Some cars are only beaters after they have been beat on. 1980's model Cadillacs and Lincolns and even BMW's and Mercedes-Benzes fall into this category once the leather seams are splitting, the paint is oxidizing, and the odometer rolls past 200,000 miles.
Many people these days have decided that it is no longer time to keep up with the Joneses and spend their hard earned discretionary income on their car. With the cheapest new car sticker prices up over $12,000 and most common and most wanted cars costing $20,000 to $30,000 or more, it can be difficult to keep up with the finance payments. If you have fair, poor, or bad credit for whatever reason, you may end up paying 15% to 25% per year in interest on top of that.
Now step back a minute. You are looking at a new sedan with a $20,000 sticker price. After the rebates and dealer discounts come off your price is down to $16,750, and after taxes, title fees, license plates, and other costs are added, you might be looking at a $18,000 car. You already did your homework, right?. You know you want to put some money down so you decide on $3,000. Now you need to finance $15,000 but your credit score is in the low 600 range and you get slapped with a 15% interest rate. You budgeted $350 a month for payments. The salesman comes back from the manager's desk and says for a 4-year term, your payments would be $418 a month. OUCH! So you tell him about the $350 a month you'd like to pay. Salesman comes and goes and says, I got a GREAT deal for you (watch yourself here), I can get your payments down to $317 a month! You think, that must be for 5 years, sounds good! That's for 6 years. 5 years would be $356 a month. But you thought about the extra monthly cost of getting full coverage insurance and go with the 6-year note. You sign the paperwork and have a brand new car for only $317 a month!
I have some bad news for you. You just spent almost $26,000 on a car that stickers for $20,000. You got a great deal after discounts and rebates. You even got your financing in order. But now six years of your disposable income is going to be sucked away. There is a better way. Do you remember the $3,000 you put down on this new car? Did you know you could spend that $3,000 and buy a perfectly good used car for that? You could probably even get a decent enough car for $2,000 or even $1,500! If all you do is drive 15 miles each way to work, visit friends and family on the weekends, and take that trip to Florida each summer, there is not much sense in spending $26,000 over 6 years when you can spend a couple thousand now and get years of use out of the car!
A quick classifieds search near me shows a new Impala for sale for $22,888 after discounts. I can buy a 2007 model Impala with 20,000 miles for $12,995 through a Certified Pre-Owned program. I can buy a 2006 model Impala (same bodystyle, same model, same motor, same options, same color) with 50,000 miles on it for $8,995. I already saved nearly $14,000 just by buying an older model of the same new car! If I go to an older generation of Impala, I can buy a 2004 model with 100,000 miles on it for $4,500. Just cut that in half! And if I'm willing to put up with some issues like faded paint, windows that chatter when they roll up and down, and a missing hubcap, I can buy the 2002 model of that car with 150,000 miles for $2,250! Cut in half AGAIN!
Maybe I am a little different from other car buyers. I am willing to put up with noises, cosmetic deficiencies, and broken trim pieces. Of the 60 cars I have owned in the last 15 years, only a small handful of them cost me more than $1,000. I would rather buy a $500 car, drive it for a few months, and sell it for about the same price to buy another. I rarely have a car payment, I never have full coverage insurance, and I always get to drive something different. But then you have my wife-she likes nice things-and she is always paying a car payment on whatever she drives because she wants it to be nice and clean and look new and shiny. I will profile her last car purchase sometime in the next few days.
If you would like to learn more about buying cars, please stay tuned. Comment here, send me a message, I will be happy to help you. My friends always come to me to find them a great cheap deal, I love helping them, and I would love to help you, no matter where you are located. No charge, I do this for fun.
Some cars will always be known as beaters. I will get into profiles of individual beaters in later posts. In fact I would like to profile at least one "Beater" a week so when you see it, you will understand. Some cars are only beaters after they have been beat on. 1980's model Cadillacs and Lincolns and even BMW's and Mercedes-Benzes fall into this category once the leather seams are splitting, the paint is oxidizing, and the odometer rolls past 200,000 miles.
Many people these days have decided that it is no longer time to keep up with the Joneses and spend their hard earned discretionary income on their car. With the cheapest new car sticker prices up over $12,000 and most common and most wanted cars costing $20,000 to $30,000 or more, it can be difficult to keep up with the finance payments. If you have fair, poor, or bad credit for whatever reason, you may end up paying 15% to 25% per year in interest on top of that.
Now step back a minute. You are looking at a new sedan with a $20,000 sticker price. After the rebates and dealer discounts come off your price is down to $16,750, and after taxes, title fees, license plates, and other costs are added, you might be looking at a $18,000 car. You already did your homework, right?. You know you want to put some money down so you decide on $3,000. Now you need to finance $15,000 but your credit score is in the low 600 range and you get slapped with a 15% interest rate. You budgeted $350 a month for payments. The salesman comes back from the manager's desk and says for a 4-year term, your payments would be $418 a month. OUCH! So you tell him about the $350 a month you'd like to pay. Salesman comes and goes and says, I got a GREAT deal for you (watch yourself here), I can get your payments down to $317 a month! You think, that must be for 5 years, sounds good! That's for 6 years. 5 years would be $356 a month. But you thought about the extra monthly cost of getting full coverage insurance and go with the 6-year note. You sign the paperwork and have a brand new car for only $317 a month!
I have some bad news for you. You just spent almost $26,000 on a car that stickers for $20,000. You got a great deal after discounts and rebates. You even got your financing in order. But now six years of your disposable income is going to be sucked away. There is a better way. Do you remember the $3,000 you put down on this new car? Did you know you could spend that $3,000 and buy a perfectly good used car for that? You could probably even get a decent enough car for $2,000 or even $1,500! If all you do is drive 15 miles each way to work, visit friends and family on the weekends, and take that trip to Florida each summer, there is not much sense in spending $26,000 over 6 years when you can spend a couple thousand now and get years of use out of the car!
A quick classifieds search near me shows a new Impala for sale for $22,888 after discounts. I can buy a 2007 model Impala with 20,000 miles for $12,995 through a Certified Pre-Owned program. I can buy a 2006 model Impala (same bodystyle, same model, same motor, same options, same color) with 50,000 miles on it for $8,995. I already saved nearly $14,000 just by buying an older model of the same new car! If I go to an older generation of Impala, I can buy a 2004 model with 100,000 miles on it for $4,500. Just cut that in half! And if I'm willing to put up with some issues like faded paint, windows that chatter when they roll up and down, and a missing hubcap, I can buy the 2002 model of that car with 150,000 miles for $2,250! Cut in half AGAIN!
Maybe I am a little different from other car buyers. I am willing to put up with noises, cosmetic deficiencies, and broken trim pieces. Of the 60 cars I have owned in the last 15 years, only a small handful of them cost me more than $1,000. I would rather buy a $500 car, drive it for a few months, and sell it for about the same price to buy another. I rarely have a car payment, I never have full coverage insurance, and I always get to drive something different. But then you have my wife-she likes nice things-and she is always paying a car payment on whatever she drives because she wants it to be nice and clean and look new and shiny. I will profile her last car purchase sometime in the next few days.
If you would like to learn more about buying cars, please stay tuned. Comment here, send me a message, I will be happy to help you. My friends always come to me to find them a great cheap deal, I love helping them, and I would love to help you, no matter where you are located. No charge, I do this for fun.
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