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Just what is a good deal?

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  • qbrozenqbrozen Posts: 16,894
    but you are talking about old or just revamped models with no public love. the veracruz seems to be a bit of a media darling and a new face on the block, to boot. i dunno. guess i was just thiking hyundai might actually have a winner for once. oh well. not that it matters much to me.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '08 Town&Country

  • darrvao777darrvao777 Posts: 8
    So I wanted to come here looking for some financial advice to get a good deal on car buying

    My background: Just recently graduated from college, salary is a tad under 50K annually. Looking for a car to last me 2 years (or longer). In roughly 2 years, will see a significant jump in salary (2-3x current income)

    1. Would it be in my best interest to buy a new, cheap car to string me along for 2-5 years and then purchase a new one?

    2. Would it be in my best interest to lease an affordable car for 24 months and then purchase a new car once I have more disposable income?

    3. Would a certified pre-owned vehicle be the smarter way to proceed?

    Thanks!
  • Kirstie@EdmundsKirstie@Edmunds Posts: 10,676
    You're almost certain to get a majority of votes for option #1. If you can do it, it is almost always best to buy what you can easily afford NOW without stretching your budget. Oh wait, you said NEW, cheap car? Oh no. Not new.

    Pay as much cash down as you can for a cheap, used vehicle. Finance what you must. In the interim, save a bit of money every month for a nice downpayment on that new vehicle. Even when your income does go up, you will avoid the trap of being upside-down in the new vehicle you purchase.

    Need help navigating? kirstie_h@edmunds.com - or send a private message by clicking on my name.

  • mac24mac24 Posts: 3,910
    edited May 2011
    Pay as much cash down as you can for a cheap, used vehicle. Finance what you must.

    Kirstie nailed it, but try and make it a fairly new (2 or 3 years old) model.
    The previous owner will have taken the depreciation hit, it should be reliable, and in case it's not it still has some warranty left.
  • Kirstie@EdmundsKirstie@Edmunds Posts: 10,676
    Yes - but not a Honda or Toyota. They initially depreciate so slowly (in general) that a good deal on a late-model year vehicle is very hard to find.

    Need help navigating? kirstie_h@edmunds.com - or send a private message by clicking on my name.

  • mac24mac24 Posts: 3,910
    Yes - but not a Honda or Toyota.

    She's right, but don't hesitate if you do find a good deal on one.
  • qbrozenqbrozen Posts: 16,894
    of course, kirstie is right. But an inexpensive but reliable used car.

    At this point, you should be more concerned saving up what you can to buy your first home.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '08 Town&Country

  • stickguystickguy Posts: 13,584
    I will go a different way.

    If you are light on cash now, but are confident in you job, I would look for a great deal on a ST lease. Subaru has some now in the paper, and I am sure there are plenty of others.

    you should be able to get an imprezza for low $200 range, with very little due at signing. This way, your payments are low, and you can start saving as much money as possible (build a nest egg, and put some toward your next car).

    Knowing that you will want something nicer in 2-3 years, a 3 year lease (that Sube one is 39 months) times out well.

    plus, it should help keep you from doing something radical in the next year or two!

    also, you should have fixed (as in next to no) variable costs on this. Gas, insurance, payment, pretty much it.

    if you buy well used (as in cheap), it will be a whole different experience.

    2013 Acura RDX (wife's), 2007 Volvo S40 (when daughter lets me see it), 2000 Acura TL (formerly son's, now mine again), and new Jetta SE (son's first new car on his own dime!)

  • qbrozenqbrozen Posts: 16,894
    fresh out of school and a new job is a bad time to lease. You never know what is going to happen. I had a lease too early myself .... then me the right woman, got married, and bought a house. Wound up with a 100-mile per day commute. Yup.... bad time to be in a lease.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '08 Town&Country

  • sterlingdogsterlingdog North CarolinaPosts: 6,750
    I would suggest a one or two year old car. You would still have some warranty but save a ton of bucks. Don't get over your head this early in the game. You may have college loans and/or wish to purchase your first home. Also, don't buy the cheapest brand automobile available. Get a nice car at a good price. You'll have something that you can enjoy but still afford. Good luck to you.

    Richard
  • kyfdx%40Edmundskyfdx%40Edmunds Posts: 25,879
    ...are always good for a laugh, later...

    Get something cheap... then, see what happens..

    Moderator - Prices Paid, Lease Questions, SUVs

  • darrvao777darrvao777 Posts: 8
    Wow thanks for the spate of useful and quick replies!!

    So I've narrowed it down to a short term lease (24-36 months) versus financing a used vehicle.

    I'm having trouble getting the monthly payments on the used car to match that of the leased vehicles.

    So would it not be in my best interest to lease a car for 24-36 months to bridge me to a time period when I would have more cash? (because of the cheaper monthly payments?)

    Or it makes more financial sense to make payments toward I car that I would ultimately own? (even if it means higher monthly payments?) I'm not quite convinced I would want to keep that vehicle in 2-3 years time but I guess for frugality's sake, I could certainly make do with it for a little while longer.
  • mac24mac24 Posts: 3,910
    So I've narrowed it down to a short term lease (24-36 months) versus financing a used vehicle.

    A lease buys you the use of the vehicle as opposed to ownership.
    A lease can have tax advantages, but for someone starting out I doubt that would apply.

    Personally I'd buy with as large a down payment as I could scrape together, then I'd overpay the balance each month until it hurt, so as to get it paid off as soon as possible.
    When it's paid off, you own it; when the lease finishes you have nothing.
  • qbrozenqbrozen Posts: 16,894
    edited May 2011
    If you can't get the purchase number to look good, you may be using the wrong numbers. Are you comparing a 3yr lease to 3yr loan? Cause that will be misleading. On a 3yr lease, you are only paying about 45% of the car. So, to compare fairly, it should be looked at vs a 6yr loan. Not that you should get a 6yr loan.... Just pointing out that this is a more accurate comparison of the two.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '08 Town&Country

  • explorerx4explorerx4 Central CTPosts: 9,446
    How many miles a year to you expect to drive?
    That can make a difference when considering leasing.
  • darrvao777darrvao777 Posts: 8
    I have a limited travel routine and could probably get away with <10000 miles per year so I would think the usual lease allowance of 12000-13000 miles would be enough.

    I guess financing a used vehicle does provide me with more flexibility in case I wanted to use the car for recreational trips instead of solely for commuting.

    I tried extending out the financing term to ~72 months to match up with a 36 month lease, I've been looking at leasing a Camry or Subaru for ~$200 a month and haven't been able to find a similarly competitive used vehicle for $200 a month even over 72 months.
  • tallman1tallman1 Posts: 1,874
    But remember, as others have pointed out: if you lease, you are renting and will have nothing after 3 years. If you buy, you will own a car. Even though there will be some depreciation, it certainly won't be zero.
  • qbrozenqbrozen Posts: 16,894
    I seriously doubt the lease on a Camry REALLY comes out to ~200/mo. Usually that involves a cap reduction, plus your bank fee and security deposit up front. Then add taxes.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '08 Town&Country

  • darrvao777darrvao777 Posts: 8
    Wanted to say thanks again for being so helpful and providing such quick replies!

    Gonna start my used car search in earnest this week with the goal of purchasing a car by the end of June/July

    (The lease is still an option but I've relegated it really as a backup option at this point)

    Thanks again for all the help!

    I'm sure I will be back with more questions along the car search :)
  • Kirstie@EdmundsKirstie@Edmunds Posts: 10,676
    Good choice!

    The thing is, if you purchase a used vehicle at a good price and pay as much as you can each month (meaning, as much OVER the required monthly payment as you can), in a couple of years your trade-in should act as a decent downpayment on your next vehicle.

    Need help navigating? kirstie_h@edmunds.com - or send a private message by clicking on my name.

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