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Stick to discussing the total price of the car, and not the monthly payment. Salesmen like talking about getting you a "lower payment", but they'll end up sticking you with a 7 year loan if you don't watch them. Often the first thing a salesman will ask is "what kind of payment do you want?".
Don't even discuss a trade in until you have settled on the price of the new car. Know what your trade is worth before going to the dealer.
Refuse all of those dealer add on services, like extended warranties and tire replacement plans. Most are a rip off.
Stick to discussing the total price of the car, and not the monthly payment. Salesmen like talking about getting you a "lower payment", but they'll end up sticking you with a 7 year loan if you don't watch them. Often the first thing a salesman will ask is "what kind of payment do you want?". .
Yes.
That tactic makes me so angry.
And they will persist with it. Even when you're like, "That's irrelevant. Let's just talk about the price of the car."
God...those people cheeze me off so much.
The last dealership I was at told me the other offer another dealer gave me was 'a lie.'
I mean, what is WRONG with these people?
The more money at stake, the more lies are told. See Wall street.
What's interesting about that is that when I get into the high end cars (I have high end cars and I have 'regular' cars - they serve different purposes for me), I get less muckity muck bullsh*t than when I go to buy a lower end car.
The total reeedonkulous rigamarole I got from the Toyota dealership...it was so stupid! But then over at Porsche, they are totally real with you and just give you the bottom line and meet better offers and aren't posing like a bunch of ****tards. Same with Lexus. Same with Caddy. Same with the Maserati/Ferrari guys. The only high end car people I met that were also ****tards were the BMW guys.
Sorry for the language. Reliving it in my mind is getting me hot under the collar again. Lol...
What's interesting about that is that when I get into the high end cars (I have high end cars and I have 'regular' cars - they serve different purposes for me), I get less muckity muck bullsh*t than when I go to buy a lower end car.
The total reeedonkulous rigamarole I got from the Toyota dealership...it was so stupid! But then over at Porsche, they are totally real with you and just give you the bottom line and meet better offers and aren't posing like a bunch of ****tards. Same with Lexus. Same with Caddy. Same with the Maserati/Ferrari guys. The only high end car people I met that were also ****tards were the BMW guys.
Sorry for the language. Reliving it in my mind is getting me hot under the collar again. Lol...
yes, but that makes sense.
Lets Generalize for a minute, What type of buyer buys a Porsche or a Lexus, or a Caddy? Someone who is well off making a pretty good living. What can we generalize about that, they most likely have a higher education level, work in a professional environment and generally are "smarter" people. Well educated people can see through a bunch of the tricks, have decent credit and have a better understanding of finances. On top of that, they're generally more willing to stand up and say, "I'm not dealing with this crap" They're more used a business relationship and professional etiquette and not a sleezeball lying salesman who plays games with payments etc.
more used a business relationship and professional etiquitte
Don't even discuss a trade in until you have settled on the price of the new car. Know what your trade is worth before going to the dealer.
This doesn't make any difference whatsoever.
On the first point, dealers have a certain amount of fluff built into the list price of their cars so that they can put a higher value on the trade. When you negotiate an outright deal the dealer usually gives all of this up to make it look like they're giving you and even better deal than they actually are. If you introduce the trade after you've negotiated the price you are going to get less for it, simple as that. The difference you pay will be the same either way.
On the second point, the dealer doesn't give a whit what the NADA or KBB value of your trade in is. They're going to make their offer based on what they think they can sell the car for.
20% of monthly salary is a lot to spend on a vehicle. Consider that qualifying for mortgages usually works on debt to income ratios such as 28/36% where 28% of gross pay = the cost of principle+interest+taxes+insurance. Almost no one would spend 2/3 as much of their mortgage on a vehicle.
Over the last twenty years I have not purchased a vehicle whose purchase price was more than 25% of my annual pre-tax pay. On a monthly basis I cannot fathom spending more than 5% of my monthly pay on a vehicle.
When I was young, fresh out of college, I bought a car that cost about 55% of my annual salary. I financed for 48 months. I was single, renting, and my salary was rising. It was no big deal to make those payments at the time, but I would not recommend that today.
You are very lucky to live by such a rule! Most people obviously cannot.
I am in exactly the same position as you were when you were young. I am 24 and purchased a car for 21.8K when I was 23 making 52K a year. Now I am making A LOT more money and my car loan is less than 1/3 of what I bring home annually.
So to the OP. It really does depend on where you are in life, what you are comfortable with. There is no general rule to follow. After all, if you can avoid owning a car, that is ALWAYS the smarter option.
I think the general rule is buy what you can afford. If you plan to finance, look for 0% deals. Otherwise, if you have a home and an equity line available, write a check and make the equity payments... which the interest is tax-deductible.
Paying cash for a vehicle more than $30k is a waste in my opinion. The depreciation will wash away all the time and effort made to save that amount. I can think of many more fun things to do with $30k then give it all up to "save" a thousand or so in interest over the next 5 years. It's not like the dealer is going to be impressed, you'll be a distant memory 2 hours after you drive off.
Stick to discussing the total price of the car, and not the monthly payment. Salesmen like talking about getting you a "lower payment", but they'll end up sticking you with a 7 year loan if you don't watch them. Often the first thing a salesman will ask is "what kind of payment do you want?".
Absolutely right.
The average person puts 20k miles per year on a car. You really want to be making payments on a car with 140K miles on it?
The first rule is to do enough research to know which model you want before you think about methods to pay for it. A "deal" on a car that is ranked very poorly by consumers will not seem like a deal when it requires serious engine repairs at 40k or worse. Find your model THEN shop prices.. Take a few minutes and google up the model and "owner complaints" before you look at cars.
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