"Of the ones that you see from Kia/Hyundai, are those problems the company could have taken care of but didn't or are they problems that dealers didn't want to make correct to the customer's requirements? I.e., could the dealers have fixed the problems?"
In many cases, yes, the dealer could have done a much better job of properly diagnosing and correcting the problem(s).
It's irrelevant, though. The manufacturer, not the dealer, is ultimately reponsibvle to the vehicle owner in every statute - state lemon law, Mag-Moss Warranty Improvement Act (breach of warranty) and Uniform Commercial Code (UCC) (Implied Warranty of Merchantibility).
The manufacturer is responsible for training and certifying the technicians in each of its dealerships - the dealer are off the hook, unless gross negligence can be proven. Tough to prove, and the only difference is that the owner can recover treble damages.
My thinking is that dealers can really make the difference in satisfactor for a customer when a car has some problems (Honda Accord Problems part II thread shows an example). If the dealer really makes the effort to repair what _can_ be repaired, the customers have a much better attitude toward the brand. If the dealers don't get supported or don't go that mile, the customer has a much lower opinion of the brand.
I've bought 8 Buicks from a multiline dealer in a small town in Ohio. Have always had good satisfaction about level of care. You'd think the service manager was one of three brothers who own it. The brothers are there everyday and they work to make it as right as they can. Other dealers in this area don't do that. I'm as satisfied with Buicks I've had as Toyo and Honda customers are with their product.
Of course there are some problems that just "ain't fixable" in some cars.
that just aren't fixable, thats true, but they're usually not fixable because someone in the dealership doesn't have the communication skills, education, training, leadership ability, equipment or information to get the job done.
There's two sides to the coin - while the Mom and Pop stores are hands-down the place to go to get treated well, their technicians don't always get the bestest, most current training because the dealer can't afford the copays involved.
Mega-stores get their technicians to more schools and keep them more current because they have the funds to do so.
Glad to see you complete ignored my advice. Well - thats ok. Its your money and you can spend it how you want. Still - you asked so I'll give you my opinion again on your questions.
1) Do you think I paid too much?
Yes. No question. You can pick up an LX Civic brand new for just over 15,000 and get 1.9 or 2.9% for 60 months. (I'm not sure which) So in my opinion it makes no sense to pay over 11,000 for a 99. A 99 is better than a new one if you're into racing due to suspension differences but since you're not I see no reason to buy a 99. The other part of the question is 11K and change too much money for a 99 Honda "Certified" Civic. That I don't know. You'll have to ask Terry as I'm not an expert on the Civic market. Sounds really high to me for an LX but ... what do I know.
2) I noticed on Edmunds that there was an ignition switch recall on this type of car in 2002- will the dealer know if it was replaced?
Yes - they can pull up the history via vin at the service department.
3) What the heck is a Honda Care Service contract? I did the unthinkable and bought it without understanding it 100% - chalk it up to exhaustion and malnutrition when I was there. I have 60 days to cancel - if you were me, would you keep it?
If I were you I would cancel the entire deal. Until you pick up the car and drive it over the curb the contract means nothing. (at least in California) Since you're obviously hellbent on getting a Civic I would look at a new one if I were you.
But seriously, I can't understand why somebody would pay so much for a 4+ year old Civic either -- new ones are quite literally going to cost you no more if a) you have reasonably good credit b) you factor in maintence costs.
And NO, a Honda Care "extended warranty" is not something that makes the maintence less -- it is specificly NOT for maintence items...
You asked for advice, here's two folks that you probably won't listen too...
We see stuff like this everyday...buyers seem to be so convinced they are right they do goofy things...Here is a great example. This one happens two or three times per month.
A person is here buying a new Protege that has a Rebate of $2500 or 0% financing. This particular Protege was $16,800 and the consumer had a trade valued at $3000 and $5000 cash downpayment...so we explained we could offer them the rebate and a rate of $4.5% and the payment would be $26 per month less than taking the zero percent because she wasnt financing very much... well, you know where this is going....she insisted on taking the zero percent and a paying alot more for the car.....oh well. She wasnt going to be folled into paying interest....haha... The dealership made the same profit either way, so it didnt matter to us which way shw went.
..... Did you pay too much .? (this being a 4dr Auto, deep rubber and clean) Most dealers would have around $8 in it, ad the BS warranty and a this and a that, pack, then it would be around $9ish .. what jacks up the price here is the cpo junk, that's about $600ish on a Civic.
Did you pay too much, perhaps by about $600/$800, But, if that warranty makes you sleep better at night, then it's a push ... I don't know if I agree with the others as far as buying the new version, you can get around 5/5.50% at a Credit union on the 99, if you purchase a new one for let's say $15,0 plus the extra TTL, then drive it over the curb it's worth $12,0, so you are financing $3 grand of negative equity right from Jump Street .. if you need to sell either one in 15 minutes due to kids, job, health, divorce, marriage, prison, etc, you can sell the 99 a lot faster than a 03 with a Kazillion sisters being sold around it ...
Not to question your math but lemme see if I got u right here. Rough numbers...
Purchase a 99 LX for 11
Purchase a 03 LX for 15
Drive off the lot - 99 is worth 8
Drive off the lot - 03 is worth 12
Aside from the extra 250 for added tax you're flipped 3 K either way.
Besides - if the queen had gentials she would be king...you're still driving a brand new car for another 30-50 a month - and with 1.9% you'll get out of negative equity land faster than on the used. Come trade time would you rather have a 4 year newer car? Come on now...
I really DO appreciate all the advice and opinions from all of you... even if I don't seem to be following all of them (it was a common complaint from my dad!) Just to explain why I decided to pay 11 grand for a 4 year old car as opposed to buying new: 1) I priced a new Honda Civic LX - automatic with car alarm and keyless entry - it came to about $17,000 (including the destination charge). And as you may have guessed, my haggling skills with the car dealers are lacking so I probably wouldn't have gotten them to take much off. 2) I priced the insurance on a new Civic - it would have been about $800 more per year (I haven't had auto coverage since I was 19 years old so my premiums are scary). 3) the registration would have been higher. 4) I'm trying to get the car paid off in 2 years because I will be quitting work to go back to college (so I'll also need to sock a lot of money away for that too).
So basically, in the next 2 years, I would have spent over $8000 more for the new Honda. That may not be much for some, but it'll be a huge amount in 2 years when I will be eating nothing but Top Ramen and macaroni and cheese while I'm going to school. Anyway... I'm not sure if anyone is really interested in my reasoning... but I thought I should explain so that you don't all think I'm a ditze :-)
I WILL be following your advice about the extra service agreement though... I will definately drop that. I'll be looking forward to seeing what others on this site think about my original question too, so please keep the comments coming.
but I agree with these guys daphnesanfran. The used car will cost you more in the long term for the following reasons:
1) Repairs - Doesn't it make sense that repairs will come sooner on the '99 than on the '03? It is a Honda but its still equipment that will eventually need a few repairs. With the new, your first years are under warranty. I don't recall what warranty you are getting with the used one or what you are paying for it?
2) Interest - interest rates are lower on new cars than on used.
3) Purchasing Frequency - You will have to buy another car quicker if you buy the '99 than if you buy the '03.
4) Resale value - The resale value will be higher when you go to sell on the '03 than on the '99.
Calculate it all out and divide it across the total # of miles you would drive each. Remember that you will drive the '99 for less miles than you would the '03.
Your reasoning makes sense to me. I checked TCO's and your '99 comes out better than a new LX. (Your CPO warranty cost oughta be offset by avoiding the cost of repairs that Edmunds figures into TCO.) Again going by TCO's, you could save yourself some money by going with a '99 Saturn, to the tune of $450 a year assuming 15K miles a year. FWIW, I think your negotiating skills are costing you bucks. FWIW - II, in your shoes (3 decades ago) I went with a new stripper (no AC, etc.) rather than a used, better optioned car. That worked best for me, in that repair costs were zip and reliability was sky high. If the thought of no AC, even no auto tranny, doesn't distress you excessively, you could meet your financial goals with a new Civic DX or a Yoda Echo.
Whatever you decide, I'm impressed with your financial prep for school and hope it all goes very well.
If you're gonna buy used and money's an issue, don't buy Honda or Toyota; they retain value too darned well. Instead, look at Chevy Prizm, Ford Escort, Mazda Protege, or Saturn S-Series. The way Edmunds measures total cost, the Saturn works out best; and all 4 sell for $2K+ less than the Civic.
Reading her first post, I don't think she bought the extended warranty.. I think she got the Hondacare maintenance contract for 3yr/36K. I might be wrong, but it looks like maybe they were padding her deal with crap all the way around.
And, no...I'm not going to get into the used Honda thing either... Lets just say I agree with afk_x on that account.
But Used is the way to go hands down if you wan to save money. Terry's example holds water, because he's saying that the new car is worth 3K less in the open market when you drive it off the lot, not trade in, which would be less.
So, Drive off the lot, 15K becomes 12K Used car 11K becomes whatever the private party value is. Probably like 9-10K. And on a honda, the maintenance is not going to be significantyl worse than a new car. I speak from experience having had 4 acura/honda products, ALL bought used.
"And on a honda, the maintenance is not going to be significantyl worse than a new car"
I realize that she was talking about an '03 but she should probably look at an '04. 10 years down the road, there will be a difference in repairs required for a 10 year old car vs. a 15 year old car even on a honda. At some point on any car the repair bills start to escalate. On a honda, it will take longer but nevertheless will come. You will have 5 more years before that starts happening with an '04 than a '99.
You haven't accounted for the fact that you have to buy cars more often when you buy used than when you buy new.
Depending on mileage I think you can expect 6-7 years of trouble free service from a Honda or Toyota. If you buy a 4 year old car you can expect to start spending money on it in only 2-3 years, about when the poster intends to re-enter the education system. Not the best plan in my opinion either.
I think a slightly used Chevy Prizm (which is a Toyota Corolla with a whole lot more depreciation) or a Mazda Protege are the bargains of the car world. Good cars that someone else took the initial depreciation hit on.
I don't think you will "go broke" with either car.
If you REALLY wanted to leave EVERY PENNY you could in your pocket the Prizm would probably do that ( 'course it wouldn't leave you with much equity after the 4+ years you will be in school, but that might be as much of a concern...)
Either Civic will still have some decent trade-in value in 4+ years, provided you can a) KEEP IT SHINY & RUST FREE b) maintain it REASONABLY well. I suppose that is part of your equation. Also the Honda image is quite a bit better than a Prizm, and I suspect tbat means something to you to.
The "shiny part" is usually not too hard if you have an OK parking spot & access to a car wash. The MAINTENANCE part is ALWAYS A PITA!!! That is the main reason I think that the NEW one is smarter in YOUR SITUATUON -- short of FINDING a Jiffy LUBE 4 TIMES over the next year there is NOTHING ELSE to do for a FULL YEAR in normal driving. Then, at 15K or whatever you need a pretty easy to get done transmission service. Another four oil changes, time for brakes. Another four oil changes. Get the tranny serviced again. Another four oil changes ...
Compare that to the 99: Right off the bat: How are the Brakes? The tires? The tranny? Even if the Tires are NEW & the brakes (pads & rotors both) still have the "fresh from the shop" look to 'em there is NO guarantee that you won't have SOMETHING about 'em that needs work. Yes, you will still have to get the oil changed four times a year, but what about the PREVIOUS owner? Is there something ticking away "down there"? How about the service that DOES need to be done at 50K-60K-75K-100K miles? Those are ALL on you WHILE you are in school...
I know from MY experience it is MUCH harder to get these things scheduled/paid for than the MINOR service that a new car needs. In fact when I've had used cars it is TOO EASY to "put-off" needed maintenance -- I think "hey maybe I'll be dumping this thing soon I don't want to sink money into it"... In contrast my NEW cars I love to get the MINOR stuff services, as I feel like I know that will help this thing "be like new" forever... YES, I know this is psychological BUT I think it almost UNIVERSAL -- its why regular folks & dealers CAN and DO get more for "one owner" used cars...
Anyhow, I do NOT consider myself I "skilled negotiator" and I got a pretty good sized chunk off a pretty much "in demand" vehicle (an Acura MDX) mostly by using the info from Edmunds and the fine folks (like rroyce) and others who post here...
If the car "hasn't crossed the curb" you really ought to see if you can't get a better quote on a 03 Civic (especially with the 04s right around the corner)... Heck you can LEASE a Civic LX sedan w/ Auto fo $159/month after $999 down for 48 months. Again, not the best in terms of equity, but certainly a low out of pocket cost...
Jim....In the Philly-Collingswood area for a few days ! If ya wanna hook up and have a beer or a steak sand. "wit" drop me a E mail ! If your over on Haddon ave. area...Stop by Pats Pub on the corner of crystal lake & haddon ave. Look for a newer black Chevy xcab truck with NY plates parked close by. Flying solo so the boss has the Caddy!...................geo
I'll be in Atlantic city for the annual Cash Blast get together with my fellow Toyota Car Guys. Will be my last year due to my new position. : ) Mackabee
So new Civic LX - $14.2 (carsdirect.com), 4 year old - $11K. Those Civics must be very popular or the $17K price for a new Civic LX came from the same source that sells 99s for $11K. Hondas should be cars to avoid when shopping for a used car. You can get 3-4year BMW or Jag for a less than 50% of the original price.
I think that in the long run, you spend a lot less buying a used car than a new car IF YOUR PROPERLY MAINTAIN IT. (emphasis intended)
However, if you have to pay much more than 50% of the original acquisition price to get said vehicle, you may be better off buying a new car and spending all of the money you should be spending on an education.
Personally, if I was going back to school and I did not have a rediculously long commute, I would do the "beater shuffle." That is, buy a 7-8 year old car with 100k miles and drive it until a major (engine/transmission) problem occurs and then pick up another beater and repeat process. Heaven knows with the 0% financing and everyone'e "NEED" to drive a new car every year or two, there are a TON of cars out there that could be had for a song.
I would never buy a New domestic. I'd get a late model maybe 1 or 2 years old with low miles. In those cases you can buy those for 2/3 what they cost new and still get a decent car. On an Import(honda or toyota anyway) The used one will be a good car for a long time anyway. granted you might get cought with the 60k service or a timing belt swap. But OTOH, they hold their value so well you can get a new one for not much more than the late model retail's for.
EDIT: I'd go with the older civic. Great car, Not much maint. required anyway.
BTW Yes, the make/model of the car/truck DOES matter quite a bit. You gonna get an alignment with that too? If the strut mount is not 'perfect' you _w_i_l_l_ need one...
You are right. For some reason 3-series holds its value much better that other BMW models. Anyway as jlawrence01 said 50% is a rule of thumb. If 3-4 year old car cost more that 50% of a comparable new car price, you buy new otherwise - get used.
I recently heard a radio ad for a dealership in my area. It got me thinking.
The ad went something like this: they were advertising used cars. They gave a few examples and gave prices like 10K, 5K, etc. They also talked about $49 down and some cars as low as $99/month. Near the end of the ad they gave the ole bring in your trade and we will pay it off no matter what you owe. At the very end of the ad they gave the speed reading where they listed the details on the cars they had talked about, how the loans were structured to get $99/month and finally that any negative equity on the trade would be rolled over. Standard stuff.
But then I got thinking. In this particular case I was thinking about the low cost of the used cars, but I guess it can happen even with an expensive new car. If I as the buyer go in and negotiate a deal on one of these used cars, say the 5K one. I would negotiate on that car and not say anything about any trade (not really any negotiation if they advertised it at a good price already). At that low price I just want to pay cash for the used car. If the dealer agrees to a deal on the used car first and then I say I want to trade a negative equity car because of the ad saying they will pay it off, how would the dealer back out of such a deal?
The ads do not say, "We'll pay off your old car no matter what you owe and get you out of debt". IOW, they don't say *how* they'll pay off your old loan and what the result is, they just say they will.
By negotiating the deal first then springing a trade on them, you'll effectively kill the deal as there may not be room to fit in the negative equity into the new loan. Banks will finance only so much on a used car loan so unless you have a big down payment to bail yourself out, you've just wasted everybody's time.
Yet another example where a buyer should be upfront and honest about his intentions at the beginning of negotiations.
I'm just up the street from Camden a few miles (thankfully)...Zues knows what I mean ! I will be in AC mon-wed....Must play blackjack !Then back to NY to a doc appt. thurs.! Have a blast and make some bonus $$$$. Your last is gotta be your best!..............geo
I understand what you two are saying. I have been around the block and edmunds long enough to understand the dealer is not going to cover the negative equity out of his own pocket.
But in effect the ad is saying 2 things, buy my car for 5K. Then the ad says we will pay your old car off no matter what you owe. At least I paid attention to the speed reading, most people probably would not. I view this as two different transactions. I will buy the dealers car for 5K cash. Then I want to trade and have him pay off all of my trade car's balance. If the dealer does not do this, at the least it is a deceptive ad and at the worst illegal for false advertising. In this situation there is no where to "roll" any negative equity because the car I am buying from the dealer will be paid for, no loan.
My question was, that given that situation, what would the dealer "say" to back out of the deal. Assuming we have already agreed to the dealer car ad price and I have told him I am paying cash for the dealer car. Then I would say " and your ad also said that you would pay off my trade, no matter what I owe. Well it is worth about 4K but I owe 6K. So according to your ad I want to trade that in and have you pay it off." He will either have to refuse the trade (false advertising) or try to up the price on his car, but we have already agreed to the price of the dealer car that I am buying from him.
I know that this type of ad is a sales gimmick to get people in, especially those that do not understand how the rolling over of the negative equity works. I was just wondering how the saleman or dealer would react to the situation and what they would say to the customer to try and save face or work a deal out of such a mess.
It's really amazing how little many (most?) people know about personal finance. Why don't they teach this stuff in High School instead of spending so much time on disecting frogs and quadratic equations?
My guess is they will state that your car is no longer considered a "trade-in" because the "deal" you struck to buy their car was cash only. To consider taking your car in after the fact would be a straight purchase from you, a separate transaction, and not a trade-in as the ad specifies.
I had kinda thought of it the way you guys said too and had come to that conclusion, but I was really thinking of it in terms of what tboner said above.
I was just dissecting it out here to try to better explain my reasoning. In actually it would go very close to what tboner described. It would be presented as one transaction to the dealer. I buy your new car for $x,xxx and here is my trade that I owe $x,xxx on and I want you to pay the full balance. In fact in this case the trade would not even have to be appraised because the ad said they will pay it off no matter what the buyer owes, so the pay off is the important number.
tboner..well the ad did say "we" will pay off your trade no matter what you owe. Of course you could construe "we" as the dealer and the buyer together...LOL
Maybe it is slow because it is the weekend, but would really like to hear from royce or audi on this since they run dealerships.
larry..not sure if your post was in response to my post, but I definately understand the real deal about this kind of ad. There is no free lunch and the dealer is going to bury the negative equity somewhere that it will cost the buyer. I was just curious how a dealer would respond to being called on the carpet for this type of deceptive ad. I did have a personal finance course in HS and you would be amazed how many 14 and 15 year olds did not know what a check was or how to fill one out. I agree with you that the US does a very poor job in this area. It is my belief that it is kept this way to keep the lower and middle classes dumb about finances. If everyone understood finances better, it would be harder to rope them into 12% interest car loans for 84 months, or have them understand that paying the minimums on CC debt will never get the debt paid off, you are only paying interest. Or they may be more reluctant to pay 100% or more mark up on items that they buy. Remember knowledge is power. It has always been horded throughout history by those that wanted to control others.
I just think that personal finance should be an integral part of math courses from first grade, where they could use pennies in their math problems, through high school. Spread it out over twelve years and it really won't take too much away from the quadratic equations and geometric proofs but you'll end up with students who understand investing, interest, and even check books.
>I did have a personal finance course in HS and you would be amazed how many 14 and 15 >year olds did not know what a check was or how to fill one out. I agree with you that the US >does a very poor job in this area. It is my belief that it is kept this way to keep the lower and >middle classes dumb about finances. If everyone understood finances better, it would be >harder to rope them into 12% interest car loans for 84 months, or have them understand >that paying the minimums on CC debt will never get the debt paid off, you are only paying >interest. Or they may be more reluctant to pay 100% or more mark up on items that they buy. >Remember knowledge is power. It has always been horded throughout history by those that >wanted to control others.
It's nice to add things that someone else should do to teach our children to all the things that have already been added; each business has its own ideas of what should be a part of 1-12 education for its own benefit and then each kid is also to be prepared to excel in college in case they get an all important athletic scholarship!!!
But aren't parents supposed to be the first teachers for their children. I am for my child. At 11 he already knows about savings not at your local bank, car buying and understanding the dealer's markups and hidden items, saving then paying to buy rather than buying on credit, and I'll teach him to write a check.
I don't think knowledge is hoarded in any kind of plot by schools; it's freely given at my son's schools! Unless there's some hidden plot I'm not aware of.....
What I'm saying is that by replacing a little bit of time spent on items that are of only acedemic interest, to most of the students, with something that will be of practical use to everyone you will have improved the practical eduction of most of the students.
Do you participate in any financial forums? The ignorance that exists on financial matters is incredible.
"There's no such thing as a bad child, only bad parents."
In our younger stages, we're just like a puppy. If we're not taught discipline and control, we piddle on the carpet. If control and discipline and learned, we walk on a leash, potty where we're supposed to and don't chew up anything important.
You can't blame a child for poor behavior or lack of knowledge any more than you can blame a puppy for piddling on the kitchen floor when he hasn't been housebroken.
Lack of parenting, all this goofy "self-esteem" and "sharing our feelings" and having the child "choose" good choices and behaviors makes me ill. Where did all these fruity pcychologists figure that if we don't discipline our children, they'll somehow "choose" to pick it up on their own? Ain't happening, bud.
Two things I dislike the most are undisciplined pets and undisciplined children. If your little spawn of satan are wreaking havoc at the Super Wal-Mart in Allentown, PA (Rt 222) on Thursday nights (my once a week trip) and you don't control them, I'll embarrass you, I promise.
Back to financial responsibility - back in "home economics", where girls learned to sew and cook, they often taught about the family budget. That was great, but why not have a math teacher show you accounting skills - taking care of your checkbook, credit file, bill paying, loans, etc?
That class, reinforced by the parents, or started by the parents, would help many folks.
Comments
In many cases, yes, the dealer could have done a much better job of properly diagnosing and correcting the problem(s).
It's irrelevant, though. The manufacturer, not the dealer, is ultimately reponsibvle to the vehicle owner in every statute - state lemon law, Mag-Moss Warranty Improvement Act (breach of warranty) and Uniform Commercial Code (UCC) (Implied Warranty of Merchantibility).
The manufacturer is responsible for training and certifying the technicians in each of its dealerships - the dealer are off the hook, unless gross negligence can be proven. Tough to prove, and the only difference is that the owner can recover treble damages.
I've bought 8 Buicks from a multiline dealer in a small town in Ohio. Have always had good satisfaction about level of care. You'd think the service manager was one of three brothers who own it. The brothers are there everyday and they work to make it as right as they can. Other dealers in this area don't do that. I'm as satisfied with Buicks I've had as Toyo and Honda customers are with their product.
Of course there are some problems that just "ain't fixable" in some cars.
2014 Malibu 2LT, 2015 Cruze 2LT,
There's two sides to the coin - while the Mom and Pop stores are hands-down the place to go to get treated well, their technicians don't always get the bestest, most current training because the dealer can't afford the copays involved.
Mega-stores get their technicians to more schools and keep them more current because they have the funds to do so.
1) Do you think I paid too much?
Yes. No question. You can pick up an LX Civic brand new for just over 15,000 and get 1.9 or 2.9% for 60 months. (I'm not sure which) So in my opinion it makes no sense to pay over 11,000 for a 99. A 99 is better than a new one if you're into racing due to suspension differences but since you're not I see no reason to buy a 99. The other part of the question is 11K and change too much money for a 99 Honda "Certified" Civic. That I don't know. You'll have to ask Terry as I'm not an expert on the Civic market. Sounds really high to me for an LX but ... what do I know.
2) I noticed on Edmunds that there was an ignition switch recall on this type of car in 2002- will the dealer know if it was replaced?
Yes - they can pull up the history via vin at the service department.
3) What the heck is a Honda Care Service contract? I did the unthinkable and bought it without understanding it 100% - chalk it up to exhaustion and malnutrition when I was there. I have 60 days to cancel - if you were me, would you keep it?
If I were you I would cancel the entire deal. Until you pick up the car and drive it over the curb the contract means nothing. (at least in California) Since you're obviously hellbent on getting a Civic I would look at a new one if I were you.
Goodluck - and thanks for keeping us updated.
But seriously, I can't understand why somebody would pay so much for a 4+ year old Civic either -- new ones are quite literally going to cost you no more if a) you have reasonably good credit b) you factor in maintence costs.
And NO, a Honda Care "extended warranty" is not something that makes the maintence less -- it is specificly NOT for maintence items...
You asked for advice, here's two folks that you probably won't listen too...
A person is here buying a new Protege that has a Rebate of $2500 or 0% financing. This particular Protege was $16,800 and the consumer had a trade valued at $3000 and $5000 cash downpayment...so we explained we could offer them the rebate and a rate of $4.5% and the payment would be $26 per month less than taking the zero percent because she wasnt financing very much...
well, you know where this is going....she insisted on taking the zero percent and a paying alot more for the car.....oh well. She wasnt going to be folled into paying interest....haha... The dealership made the same profit either way, so it didnt matter to us which way shw went.
Did you pay too much, perhaps by about $600/$800, But, if that warranty makes you sleep better at night, then it's a push ... I don't know if I agree with the others as far as buying the new version, you can get around 5/5.50% at a Credit union on the 99, if you purchase a new one for let's say $15,0 plus the extra TTL, then drive it over the curb it's worth $12,0, so you are financing $3 grand of negative equity right from Jump Street .. if you need to sell either one in 15 minutes due to kids, job, health, divorce, marriage, prison, etc, you can sell the 99 a lot faster than a 03 with a Kazillion sisters being sold around it ...
Terry.
Purchase a 99 LX for 11
Purchase a 03 LX for 15
Drive off the lot - 99 is worth 8
Drive off the lot - 03 is worth 12
Aside from the extra 250 for added tax you're flipped 3 K either way.
Besides - if the queen had gentials she would be king...you're still driving a brand new car for another 30-50 a month - and with 1.9% you'll get out of negative equity land faster than on the used. Come trade time would you rather have a 4 year newer car? Come on now...
1) I priced a new Honda Civic LX - automatic with car alarm and keyless entry - it came to about $17,000 (including the destination charge). And as you may have guessed, my haggling skills with the car dealers are lacking so I probably wouldn't have gotten them to take much off.
2) I priced the insurance on a new Civic - it would have been about $800 more per year (I haven't had auto coverage since I was 19 years old so my premiums are scary).
3) the registration would have been higher.
4) I'm trying to get the car paid off in 2 years because I will be quitting work to go back to college (so I'll also need to sock a lot of money away for that too).
So basically, in the next 2 years, I would have spent over $8000 more for the new Honda. That may not be much for some, but it'll be a huge amount in 2 years when I will be eating nothing but Top Ramen and macaroni and cheese while I'm going to school.
Anyway... I'm not sure if anyone is really interested in my reasoning... but I thought I should explain so that you don't all think I'm a ditze :-)
I WILL be following your advice about the extra service agreement though... I will definately drop that.
I'll be looking forward to seeing what others on this site think about my original question too, so please keep the comments coming.
Thanks again everyone!
1) Repairs - Doesn't it make sense that repairs will come sooner on the '99 than on the '03? It is a Honda but its still equipment that will eventually need a few repairs. With the new, your first years are under warranty. I don't recall what warranty you are getting with the used one or what you are paying for it?
2) Interest - interest rates are lower on new cars than on used.
3) Purchasing Frequency - You will have to buy another car quicker if you buy the '99 than if you buy the '03.
4) Resale value - The resale value will be higher when you go to sell on the '03 than on the '99.
Calculate it all out and divide it across the total # of miles you would drive each. Remember that you will drive the '99 for less miles than you would the '03.
Again going by TCO's, you could save yourself some money by going with a '99 Saturn, to the tune of $450 a year assuming 15K miles a year.
FWIW, I think your negotiating skills are costing you bucks.
FWIW - II, in your shoes (3 decades ago) I went with a new stripper (no AC, etc.) rather than a used, better optioned car. That worked best for me, in that repair costs were zip and reliability was sky high. If the thought of no AC, even no auto tranny, doesn't distress you excessively, you could meet your financial goals with a new Civic DX or a Yoda Echo.
Whatever you decide, I'm impressed with your financial prep for school and hope it all goes very well.
Instead, look at Chevy Prizm, Ford Escort, Mazda Protege, or Saturn S-Series. The way Edmunds measures total cost, the Saturn works out best; and all 4 sell for $2K+ less than the Civic.
And, no...I'm not going to get into the used Honda thing either... Lets just say I agree with afk_x on that account.
regards,
kyfdx
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So, Drive off the lot, 15K becomes 12K
Used car 11K becomes whatever the private party value is. Probably like 9-10K. And on a honda, the maintenance is not going to be significantyl worse than a new car. I speak from experience having had 4 acura/honda products, ALL bought used.
I realize that she was talking about an '03 but she should probably look at an '04. 10 years down the road, there will be a difference in repairs required for a 10 year old car vs. a 15 year old car even on a honda. At some point on any car the repair bills start to escalate. On a honda, it will take longer but nevertheless will come. You will have 5 more years before that starts happening with an '04 than a '99.
You haven't accounted for the fact that you have to buy cars more often when you buy used than when you buy new.
If you REALLY wanted to leave EVERY PENNY you could in your pocket the Prizm would probably do that ( 'course it wouldn't leave you with much equity after the 4+ years you will be in school, but that might be as much of a concern...)
Either Civic will still have some decent trade-in value in 4+ years, provided you can a) KEEP IT SHINY & RUST FREE b) maintain it REASONABLY well. I suppose that is part of your equation. Also the Honda image is quite a bit better than a Prizm, and I suspect tbat means something to you to.
The "shiny part" is usually not too hard if you have an OK parking spot & access to a car wash. The MAINTENANCE part is ALWAYS A PITA!!! That is the main reason I think that the NEW one is smarter in YOUR SITUATUON -- short of FINDING a Jiffy LUBE 4 TIMES over the next year there is NOTHING ELSE to do for a FULL YEAR in normal driving. Then, at 15K or whatever you need a pretty easy to get done transmission service. Another four oil changes, time for brakes. Another four oil changes. Get the tranny serviced again. Another four oil changes ...
Compare that to the 99: Right off the bat: How are the Brakes? The tires? The tranny? Even if the Tires are NEW & the brakes (pads & rotors both) still have the "fresh from the shop" look to 'em there is NO guarantee that you won't have SOMETHING about 'em that needs work. Yes, you will still have to get the oil changed four times a year, but what about the PREVIOUS owner? Is there something ticking away "down there"? How about the service that DOES need to be done at 50K-60K-75K-100K miles? Those are ALL on you WHILE you are in school...
I know from MY experience it is MUCH harder to get these things scheduled/paid for than the MINOR service that a new car needs. In fact when I've had used cars it is TOO EASY to "put-off" needed maintenance -- I think "hey maybe I'll be dumping this thing soon I don't want to sink money into it"... In contrast my NEW cars I love to get the MINOR stuff services, as I feel like I know that will help this thing "be like new" forever... YES, I know this is psychological BUT I think it almost UNIVERSAL -- its why regular folks & dealers CAN and DO get more for "one owner" used cars...
Anyhow, I do NOT consider myself I "skilled negotiator" and I got a pretty good sized chunk off a pretty much "in demand" vehicle (an Acura MDX) mostly by using the info from Edmunds and the fine folks (like rroyce) and others who post here...
If the car "hasn't crossed the curb" you really ought to see if you can't get a better quote on a 03 Civic (especially with the 04s right around the corner)... Heck you can LEASE a Civic LX sedan w/ Auto fo $159/month after $999 down for 48 months. Again, not the best in terms of equity, but certainly a low out of pocket cost...
If your over on Haddon ave. area...Stop by Pats Pub on the corner of crystal lake & haddon ave.
Look for a newer black Chevy xcab truck with NY plates parked close by. Flying solo so the boss has the Caddy!...................geo
Not headed to NJ today, but I'll get in touch with you.
: )
Mackabee
: )
Mackabee
However, if you have to pay much more than 50% of the original acquisition price to get said vehicle, you may be better off buying a new car and spending all of the money you should be spending on an education.
Personally, if I was going back to school and I did not have a rediculously long commute, I would do the "beater shuffle." That is, buy a 7-8 year old car with 100k miles and drive it until a major (engine/transmission) problem occurs and then pick up another beater and repeat process. Heaven knows with the 0% financing and everyone'e "NEED" to drive a new car every year or two, there are a TON of cars out there that could be had for a song.
EDIT: I'd go with the older civic. Great car, Not much maint. required anyway.
Throw out the high quote, average the rest...
BTW Yes, the make/model of the car/truck DOES matter quite a bit. You gonna get an alignment with that too? If the strut mount is not 'perfect' you _w_i_l_l_ need one...
The ad went something like this: they were advertising used cars. They gave a few examples and gave prices like 10K, 5K, etc. They also talked about $49 down and some cars as low as $99/month. Near the end of the ad they gave the ole bring in your trade and we will pay it off no matter what you owe. At the very end of the ad they gave the speed reading where they listed the details on the cars they had talked about, how the loans were structured to get $99/month and finally that any negative equity on the trade would be rolled over. Standard stuff.
But then I got thinking. In this particular case I was thinking about the low cost of the used cars, but I guess it can happen even with an expensive new car. If I as the buyer go in and negotiate a deal on one of these used cars, say the 5K one. I would negotiate on that car and not say anything about any trade (not really any negotiation if they advertised it at a good price already). At that low price I just want to pay cash for the used car. If the dealer agrees to a deal on the used car first and then I say I want to trade a negative equity car because of the ad saying they will pay it off, how would the dealer back out of such a deal?
By negotiating the deal first then springing a trade on them, you'll effectively kill the deal as there may not be room to fit in the negative equity into the new loan. Banks will finance only so much on a used car loan so unless you have a big down payment to bail yourself out, you've just wasted everybody's time.
Yet another example where a buyer should be upfront and honest about his intentions at the beginning of negotiations.
That money has to go somewhere...if it's not covered by cash downpayment or a rebate, it's still there.
I've had people tell me "I know I'm upside down, but I want EVERYTHING from this car to go away"..."I don't want the negative equity to follow me".
Man, if it were only that easy, I'd have a new car every 3 months.
I will be in AC mon-wed....Must play blackjack !Then back to NY to a doc appt. thurs.!
Have a blast and make some bonus $$$$. Your last is gotta be your best!..............geo
But in effect the ad is saying 2 things, buy my car for 5K. Then the ad says we will pay your old car off no matter what you owe. At least I paid attention to the speed reading, most people probably would not. I view this as two different transactions. I will buy the dealers car for 5K cash. Then I want to trade and have him pay off all of my trade car's balance. If the dealer does not do this, at the least it is a deceptive ad and at the worst illegal for false advertising.
In this situation there is no where to "roll" any negative equity because the car I am buying from the dealer will be paid for, no loan.
My question was, that given that situation, what would the dealer "say" to back out of the deal. Assuming we have already agreed to the dealer car ad price and I have told him I am paying cash for the dealer car. Then I would say " and your ad also said that you would pay off my trade, no matter what I owe. Well it is worth about 4K but I owe 6K. So according to your ad I want to trade that in and have you pay it off." He will either have to refuse the trade (false advertising) or try to up the price on his car, but we have already agreed to the price of the dealer car that I am buying from him.
I know that this type of ad is a sales gimmick to get people in, especially those that do not understand how the rolling over of the negative equity works. I was just wondering how the saleman or dealer would react to the situation and what they would say to the customer to try and save face or work a deal out of such a mess.
I think what he is trying to say is agree on the price of the "new" car, and then expect the trade allowance to cover the payoff of the trade-in.
Then he pays cash for the agreed upon price of the car. Which the ad leads him to believe that is all he would owe.
I'm sure it wouldn't work. The ads say they will pay off the trade, they don't say whose money is used 8^)
TB
I was just dissecting it out here to try to better explain my reasoning. In actually it would go very close to what tboner described. It would be presented as one transaction to the dealer. I buy your new car for $x,xxx and here is my trade that I owe $x,xxx on and I want you to pay the full balance. In fact in this case the trade would not even have to be appraised because the ad said they will pay it off no matter what the buyer owes, so the pay off is the important number.
tboner..well the ad did say "we" will pay off your trade no matter what you owe. Of course you could construe "we" as the dealer and the buyer together...LOL
Maybe it is slow because it is the weekend, but would really like to hear from royce or audi on this since they run dealerships.
larry..not sure if your post was in response to my post, but I definately understand the real deal about this kind of ad. There is no free lunch and the dealer is going to bury the negative equity somewhere that it will cost the buyer. I was just curious how a dealer would respond to being called on the carpet for this type of deceptive ad. I did have a personal finance course in HS and you would be amazed how many 14 and 15 year olds did not know what a check was or how to fill one out. I agree with you that the US does a very poor job in this area. It is my belief that it is kept this way to keep the lower and middle classes dumb about finances. If everyone understood finances better, it would be harder to rope them into 12% interest car loans for 84 months, or have them understand that paying the minimums on CC debt will never get the debt paid off, you are only paying interest. Or they may be more reluctant to pay 100% or more mark up on items that they buy. Remember knowledge is power. It has always been horded throughout history by those that wanted to control others.
>that paying the minimums on CC debt will never get the debt paid off, you are only paying >interest. Or they may be more reluctant to pay 100% or more mark up on items that they buy. >Remember knowledge is power. It has always been horded throughout history by those that >wanted to control others.
It's nice to add things that someone else should do to teach our children to all the things that have already been added; each business has its own ideas of what should be a part of 1-12 education for its own benefit and then each kid is also to be prepared to excel in college in case they get an all important athletic scholarship!!!
But aren't parents supposed to be the first teachers for their children. I am for my child. At 11 he already knows about savings not at your local bank, car buying and understanding the dealer's markups and hidden items, saving then paying to buy rather than buying on credit, and I'll teach him to write a check.
I don't think knowledge is hoarded in any kind of plot by schools; it's freely given at my son's schools! Unless there's some hidden plot I'm not aware of.....
2014 Malibu 2LT, 2015 Cruze 2LT,
What I'm saying is that by replacing a little bit of time spent on items that are of only acedemic interest, to most of the students, with something that will be of practical use to everyone you will have improved the practical eduction of most of the students.
Do you participate in any financial forums? The ignorance that exists on financial matters is incredible.
Problem is there's no time to do so, what with all the meetings with the divorce lawyer, the bankruptcy lawyer, the shrink, etc.
Ya gotta have priorities, right?
In our younger stages, we're just like a puppy. If we're not taught discipline and control, we piddle on the carpet. If control and discipline and learned, we walk on a leash, potty where we're supposed to and don't chew up anything important.
You can't blame a child for poor behavior or lack of knowledge any more than you can blame a puppy for piddling on the kitchen floor when he hasn't been housebroken.
Lack of parenting, all this goofy "self-esteem" and "sharing our feelings" and having the child "choose" good choices and behaviors makes me ill. Where did all these fruity pcychologists figure that if we don't discipline our children, they'll somehow "choose" to pick it up on their own? Ain't happening, bud.
Two things I dislike the most are undisciplined pets and undisciplined children. If your little spawn of satan are wreaking havoc at the Super Wal-Mart in Allentown, PA (Rt 222) on Thursday nights (my once a week trip) and you don't control them, I'll embarrass you, I promise.
Back to financial responsibility - back in "home economics", where girls learned to sew and cook, they often taught about the family budget. That was great, but why not have a math teacher show you accounting skills - taking care of your checkbook, credit file, bill paying, loans, etc?
That class, reinforced by the parents, or started by the parents, would help many folks.