Best Way to Finance a new car?

[85 Cutlass Brougham]

Well, it has been 10 years since I bought a new car, and the present gas prices and my 3k miles a month of driving have me thinking of doing it again. The thing is, I am unsure as to the best way to finance it. I am thinking of getting pre-qualified at the bank so that I do not have numerous credit pulls which would drop my rating. What is the best way to go about it, for someone with somewhat wounded credit? Is the bank the best bet, or is there somewhere else I need to try? Thanks for the opinions.

[srercrcr]

Credit Unions are pretty cheap. There may be a good rate available through the dealer. Theyre desperate for business.

[85 Cutlass Brougham]

Well, my short list of cars is selling quite well, so it's hard to find a good deal. It includes: The Hyundai Accent/Kia Rio twins, Honda Fit, Nissan Versa, Chevy (Daewoo) Aveo, and the hideous Toyota Yaris. I like the Accent hatchback the best, as it has the best combination of price, features, warranty and fuel economy. Before the EPA once again changed it's rating system, it was rated at 32 city. Now it's 27 city, but it's still a class leader ( and the new system is a bit too conservative) All I want is light weight, a 1.6 liter or smaller engine, manual transmission and A/C. I am doing my research now because in a month, when my Cutlass is painted and assembled, I want to sell my truck and use the money as a down payment on a new car. $4 a gallon is very hard when you deliver pizza for a living, and are going back to college.

BTW, what is the difference between a credit union and a bank? I know there is one, just don't know what it is. Would I have to be a member to get a loan?

[Coveted]

buying a new car to save money on fuel is not a wise choice, theres plenty of cars that are cheap to maintain that get better gas mileage than any hybrid/

[Tony_SS]

buying a new car to save money on fuel is not a wise choice, theres plenty of cars that are cheap to maintain that get better gas mileage than any hybrid/

I agree... buying a new car is throwing money out the window in terms of depreciation, taxes and interest. I would look for a used car and put the money in that. Banks will even give a small personal loan for that if the car is too old to lend money on.

[Geesie]

Out of three non-1984 Regal cars I have bought, I have only financed one. The others, I saved up so I could pay cash.

Also, none of them were new so the cost ranged from $7000 - $14000.

The one I financed, I put down a 50% down payment.

If you have good credit, you can probably get a good loan from your bank. Do NOT get a loan from the dealer. The majority are slimy and will try to talk you into thinking 15% APR is a good deal.

[HFX]

Only finance through the dealer if you know you can qualify for one of the manufacturer special interest rates. Otherwise I'd say look at credit unions.

[regalman4925]

i just bought a 05 impala for my other half because she drives a ton and the blazer was starting to have issues. keeping in mind that my daily driver is a 355 cutlass and it uses some gas, after fiancing, plateing the thing and paying full coverage on it, i am spending more money every month on it then i would be to deal with fuel costs. on the other hand i got a car that still has a warantee and is grat for road trips, which was my justification to buy it. now if something breaks she is instucted to take it to the dealer and not even tell me about it, thats why i got a warantee! all i can say is think twice! best car in the world is a paid off car!

[78mali350]

some good points have been brought up. loans can lead to trouble. pay for a car you can afford. but yet full coverage factory warrenty sounds like a plus to me. and if your trucks just gonna take a dive anyway why not get rid of it while you still can?

[85 Cutlass Brougham]

It's not just to save money on gas. I want something I don't have to worry about while commuting 50+ miles round trip every day to university, and delivering pizza. I drive 3k miles a month now, and will do more when I transfer to the local state university. For me, it is not worth spending $5,000+ to get a used car that has little or no warranty, and whose previous owner may not have kept up the maintenance on. I just had a minor break down last night, and even though the repair cost me under $10, the loss of income exceeded $100. Now, if someone has my preferred small car, the 1991-99 Nissan Sentra with a 1.6 and a 5 speed manual trans, with factory air ( need not work) for under $1,000 I will go and buy it. Otherwise, I would rather not spend good money on a car of dubious history in hopes that it will not break down and I will save some cash. I just don't have the time for everything mechanical in my life to be an ongoing project. As it is, my Cutlass consumes 20-30 hours a week, I work 30-40 hours a week, and in the fall, will be doing 10 credit hours in college with 2 "easy" courses-Introduction to chemistry with lab and Calculus with Analytical Geometry I. Add another 10-20 hours in to that for homework as well. I had to take the summer off to get the body and interior finished in my Cutlass, as well as demo the roof on my back porch and put up a new one. I would like to once again have a car that I do not have to worry about. If I don't buy new, I will try to push the Frontier to 400k ( 2.5 more years). At least I know what I have as I am the original owner. I will just have to invest $600 to get it back to 100% ( $153 per side for LCA's, $135 for a new Catalyst, $100 for a used steering box, an alignment, and a few other things I can't recall.) I don't care about depreciation for an appliance I will run until it dies, as I tend to keep most of my cars for over 10 years.

Another thing about new is that I can pay for it with the money saved in gas. I spend $550-600 a month right now getting 18-19 mpg. At 30 MPG, I will save more than the monthly payment. If gas continues to go up, I will "save" even more over what I would have spent on driving the truck, even though I will actually spend more money. So, it is a bit of a hedge against rising fuel prices.

:EDIT: Just found my all time favorite subcompact for sale for $1,000. I gotta see if I can find the money to buy it. It's a 1994 Sentra SE-R 5 speed. Not the 1.6 I wanted, ( SR20DE instead) but man, what a car! It's even my favorite color for those cars- code QM1 cloud white, so it matches the Frontier. I wouldn't have to get rid of my truck to afford the insurance, so it's the best of both worlds. I have been looking for this exact car at this price point for 4-5 years as it is one of my dream cars. Now if only my family will lend me the cash...

[Tony_SS]

The only way I would ever buy a new car again is if the interest rate was 0 or 2.9% AND with a few thousand off the sticker. Used car deals are out there, even on a newer car with less than 10k miles, there's still warranty left and cost is a lot less than new, but the kicker is the high interest rate on the used car loan.

[regalman4925]

i bought our 05 impala ls with 32,000 miles for below trade in value and 4.9% interest with a gmac loan, certified and still under warantee from the original purchase. thats pretty much the only reason i got it besides the fact that it gets 31 mpg on the hyway

[Tony_SS]

i bought our 05 impala ls with 32,000 miles for below trade in value and 4.9% interest with a gmac loan, certified and still under warantee from the original purchase. thats pretty much the only reason i got it besides the fact that it gets 31 mpg on the hyway

I got a few good rates from gmac as well... but that's a great rate for a used car!

[hujass]

I'd second the credit union reply if you are looking to buy something older like that Sentra. Over the years I've financed a few cars that way at much lower rates than traditional banks. And most credit unions will finance 15 and 20 year old "neo-classic" cars where banks won't.

Certified pre-owned GM is a great way to go for late model stuff. If you use GMAC you can get stupid low rates and extended warranties if you need it. 2005 and 2006 Impalas, Montes and Malibus are very reasonable, selling at less than half of new and you get more car for the money. With deals like that I would never waste the money on new.

[78mali350]

you should look into hyundai. don't they have transferable 100k warrantys?