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Old 09-07-2010, 05:49 AM
 
13 posts, read 178,648 times
Reputation: 65

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I'm planning to buy my first car ever,
and honestly, I am very nervous and don't know how to buy, deal with dealers and etc...
But first of all, I need to decide whether I should buy a car with cash or finance and pay off next couple of years.

What would be a smart choice if I have NO credit yet?

Thank you in advance!
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Old 09-07-2010, 07:23 AM
 
268 posts, read 381,376 times
Reputation: 165
Pay cash any time you're able to. A loan, particularly with no credit, will just cost you extra money for interest unnecessarily.

It's a no brainer. If you're looking to build credit, don't start with an auto loan, apply for a credit card instead.
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Old 09-07-2010, 08:06 AM
 
13 posts, read 178,648 times
Reputation: 65
Quote:
Originally Posted by Jeezy is BACK View Post
It's a no brainer. If you're looking to build credit, don't start with an auto loan, apply for a credit card instead.
Why is that? Could you explain a little more?
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Old 09-07-2010, 09:21 AM
 
Location: Say-Town! Texas
968 posts, read 2,104,186 times
Reputation: 565
I disagree with Jeezy, a credit card is not a safe way to build credit, however a 0% auto loan is. Since you have no credit, the loan will be around 20% and is going to be a waste of money.

If its your first car, pay cash. When you're ready for an auto loan, use your cash car as a down payment and that will show your serious about your credit, getting you a better approval from banks and get you a lower cost on your next car.

STAY AWAY FROM CREDIT CARDS, an auto loan or mortgage is a much smarter use of credit.
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Old 09-07-2010, 09:37 AM
 
9,807 posts, read 12,934,951 times
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You folks think a 0% auto loan is a " gimmick" ?

I sure do.

Many that offer 0% in HUGE,BOLD, PRINT have in small print at the botton------" or $1,000 cash back "

Kinda makes that 0% financing a little misleading.

Pay cash !
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Old 09-07-2010, 09:49 AM
 
1,345 posts, read 2,220,097 times
Reputation: 999
JM2C First being nervous is normal, cause if you want a good deal your fixing to go to war. Remember, don't take anythang that goes on or is said personal, it's just business. Car salesman train and train to take as much money out of your pocket as is humanily possible, this is how they make a living. Enjoy the competition, don't be intimidated and let them know that you know they are full of shi!, there are many good articles on AOL about the tricks of the trade and if you study the articles you can watch them employ many of these tactics. Explain that you know what there doing, laugh in there face, that will shake them up and remember cash is king and when you have cash you are truely the king. Now get out there and make a good deal with a bunch of lying scum sucking cheating thugs, hey it's business. DON'T TAKE IT PERSONAL, BUT DON'T GIVE AWAT THOUSANDS OF DOLLARS OVER A STUPID CAR.
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Old 09-07-2010, 09:57 AM
 
Location: Woodland Park, CO
3,133 posts, read 9,125,633 times
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Buying a car is fun. What's your budget? Where do you live? If you live where it snows or go up to the mountains a lot, I'd get a new Subaru. Fun cars, excellent resale, and the dealers are great in my experience. I'd get a WRX for about $25k if it were me

I think paying for cash for a car is stupid. There are better places for that cash to be than in a depreciating asset. The only time it's good to pay in cash is if you have a LOT cash sitting around and it won't put a dent in your bank account. The art of using someone elses money is the key to being successful in life You can get 1.9% financing on 2010 Subarus, I think up to 36 months or 2.9% for 63/72.

Septembmer is a great month to buy a 2010 model. Most other manufactures are offering 0% financing and cash back. Just depends on what you want!

Last edited by PokerMunkee; 09-07-2010 at 10:11 AM..
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Old 09-07-2010, 10:12 AM
 
Location: Victoria TX
42,668 posts, read 71,716,726 times
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Why would you put $10K in a bank which pays you 1% interest ($100) and then borrow it back from the same bank and pay them 10% interest ($1,000)?

The ONLY time it makes sense to finance a car purchase (if you have the cash) is if your money is invested in some manner that is and will continue to earn more for the length of the car loan than the interest you are paying on the car loan.

And don't forget, as someone else pointed out, that if you do NOT take the 0% financing, they will give you cash back, in the thousands of dollars.

A car is no different from anything else. If you have the cash for a $150 vacuum cleaner, why put it on a 29% charge card and pay $50 in interest?
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Old 09-07-2010, 10:12 AM
 
Location: Say-Town! Texas
968 posts, read 2,104,186 times
Reputation: 565
our OP sounds like a first time buyer seeing as he has NO CREDIT. and if he is paying cash i'm assuming he has around 2000 dollars saved up. advising him to buy a new 25,000 dollar car is a bit outrageous.

OP, make your money work for you. if you can find an auto loan that has a lower interest rate than what you can make on a CD or high interest bearing account, then what i would suggest is financing the car and putting the money you have saved into that interest bearing account. if you cannot find an account that will pay you more interest than the interest you're paying out, then you'll want to break even by paying cash for the car.

even if the money made is only 1 DOLLAR difference, you pay out 324 dollars in interest but the interest bearing account pays you 325, then you have made your money work for you because you are now a dollar richer. thats how warrent buffet works and its an excellent way to keep your money.
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Old 09-07-2010, 10:16 AM
 
Location: Say-Town! Texas
968 posts, read 2,104,186 times
Reputation: 565
Quote:
Originally Posted by jtur88 View Post

And don't forget, as someone else pointed out, that if you do NOT take the 0% financing, they will give you cash back, in the thousands of dollars.

please remember to check how much your total interest payout is. if its more than what they are giving you, then they are making money off of you.

when it says 0% for the life of the loan, they make 0 dollars off you.
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