Hi everyone,
I'm a first time new vehicle buyer. I've been driving around a POS for the past 10 years and have continuously invested money into with small repairs, essentially running the vehicle into the ground. I'm at the point now where 1) My current vehicle is unsafe to drive (2 door coupe with no child seat hookup in the back, which I'll need in a few months) and 2) It is at the point where I cannot rely on the vehicle - it's in the shop almost every month for small annoying fixes, which limits me with my work since I need a reliable vehicle for work. I'm currently performing final small fixes on it and putting it out to sale privately to get some more cash to add onto my down payment.
I've been saving a considerable down payment for a new vehicle (~$7K so far sans worth of privately selling current vehicle with KBB value of $4K), researching, test driving, and talking with dealerships, and have narrowed down my selection to which family friendly vehicle I would like to purchase.
I've been negotiating with dealerships. These conversations usually go like this (D=Dealership, M=Me):
M: "I'm interested in this vehicle"
D: "Excellent! Sticker price is (let's say) $32K+, but since you looked on the internet, the price has dropped to $30K!"
M: "Why? Why is it cheaper if I look online?"
D: "Oh that's because the higher price is what we use if someone comes in off the street"
M: "Ok..."
D: "Do you want to lease, finance, or pay cash?"
M: "I'd likely finance the vehicle. Would you be able to provide me some numbers for a 3 year, 4 year, and 5 year loan? Could you also include APR%?""
D: "Of course! Be right back" *They talk to their boss who crunches some numbers*
D: "Here you go! With your $7K down payment, and with no trade in, you're looking at the following numbers for monthly payments"
M: "Does this include APR? What is the APR for each of these?"
D: "Oh, I'm not sure, but generally we have an APR of 3-4%"
M: "OK, any way that would lower considering credit? If I have excellent credit, would that lower the APR?"
D: "Oh let me check" *Talks to boss again*
D: "So we were offering this deal last month, but we are also offering it this month - wanted to check before putting my foot in my mouth - 0% APR for a 3 year loan, 1.9% for 4 year loan and above"
M: "Wow that's great! Could you show me a revised monthly payment?"
D: "Sure, let me check" *Checks with boss again"
D: "Here you go!" *Numbers lower slightly, about $30 difference in monthly payments
M: "Thanks, I'll take these numbers and mull everything over the next few days and will get back to you"
D: "Absolutely! Keep in mind that the low APR deal may end come start of next month"
It boils down to this - how good of a deal is 0% APR on an auto loan? Is it better to save for a few more months to potentially double my down payment to take out a smaller loan, or is it smarter to take the 0% APR loan? With one I'll have to take out a smaller loan, but will need to pay interest. On the other, a larger loan with no interest....
I'll be following up with additional dealerships in the area this week to see what they have to offer for the same vehicle. I saw that other dealerships were offering the same exact deal on this same exact vehicle for similar prices. I'm hopeful I can find better pricing and then run those numbers by opposing dealerships to see who will go the lowest. I also plan to wait until the end of the month to make a final decision as this is typically the best time to purchase from a dealership (I believe - please correct me if I'm wrong).
Thanks everyone, and apologies if I sound like a total newbie - it's because I am!
Submitted April 10, 2019 at 08:16AM by RealFlyForARyGuy http://bit.ly/2uW6UvY
