Purchasing Used Vehicles

icedog97

First, thank you to all that responded to my earlier post about an older foreign car vs a newer domestic...

Someone mentioned that I did not have an apples to apples comparison with a couple of choices (accord and sunbird)...well here's one that's even less similar...

2000 Ford Focus SE with 61k miles for $6000 (orange with a few paint blemishes), power windows, locks, cd, spoiler, alloy wheels etc

1994 Volvo 850 Turbo with 69k miles for $6000 (black) - leather, roof, power everything, alloy wheels, etc...

I know Volvos are supposed to run forever but are expensive to fix if something goes wrong...I figure this engine has 150K miles left in it, if not more...

I have not seen the Volvo personally, but let's assume for the sake of argument it's clean and has been garaged(which is what the guy tells me)...

Which of the two would you choose?

danf1

You could probably keep either one running if you maintained them well. It will cost you a lot more to keep the Volvo going over the same amount of time. If you are planning on keeping the car for an extended time, go with the ford. Parts are cheap and finding a reasonably priced quality mechanic should be easier.

asafonov

I am not in the car business, but 6k seems a bit high for a 5-year old Focus (6 years according to Terry). I liked a rental Focus I had, but for 6k, there are better deals out there - 00-01 Protege or Sentra, 01-02 Prizm, Tauri and oldsmobiles.

danf1

I was ignoring price and just looking at cars. I agree that 6k is a bit much for a high mile Focus though.

jlawrence01

I would pass on both.

The Volvo is 12 years old. While the miles are low, the car is subject to deterioration due to age (think rubber). They are fairly expensive to maintain.

The Focus may or may not work ... but $6k is a lot to pay for that model. Besides, I believe that was the first year of the model and that is something that I personally avoid. It generally takes Ford (and most other manufacturers) a couple of years to work out the bugs of a model.

Personally, I would look at one of Ford Escorts of the same era. Pretty boring cars that were reliable and pretty inexpensive to maintain. We bought a couple for the nieces and have had pretty good luck with them. Avoid the Topaz/Tempo as they were expensive to maintain.

I see a lot of deals on Ford Tauruses. They are fine as long as you avoid the pre 1998 models with the biodegradable transmissions. I bought a 2002 SE model last year for $5500.

kyfdx

That Volvo is likely to make you cry... I'm betting you could lease a new Accord, and spend less over three years than you will owning that Volvo...

Between the two cars, I'd pick the Focus at about $4K-$4500...

Kirstie_H

Additionally, once the word "turbo" is added, so are the likely maintenance $$.

dbauer

another thought...

nissan has a lease special going right now:

$1699 due at signing, $199/mo. for 24 months.

that comes out to be $6499 plus taxes to drive a brand new car for 2 years. check it out.

you can also do a pre-paid lease, making all payments upfront.

jlawrence01

For that matter, there are a number of vehicles - Toyota Camry, Chevy Cobalt, etc. that are pretty much $0-$1500 with payments of $159-199 a month.

Do realize that before you sign the lease, you are on the hook for the payments until the end of the lease no matter what (loss of job, big medical bills, etc.).

However, do realize that if you are leasing, the cost per mile of ownership is significantly higher than buying a used car.

kyfdx

Well... not higher than that Volvo.. I'm betting...

icedog97

Thanks again for the feedback...

I'm in a bit of a cash crunch right now so I am trying in the short term (12-24 months) to eliminate a car payment. Which kind of kills the lease idea unless I can get a very good deal.

The Focus dealer was actually offering me 9.7k (his last ditch effort yesterday - needed to get appproval yet, so who knows) on my 2001 Altima SE (kbb at about 8.5k) and 6988 on the Focus. So really he is selling me the focus for ~5.8k. It has a kbb of about 3.8k so I agree with what people were saying that if he showed me 10.7k on the Altima, I would be about where I should be with the Focus (around ~4.8k). We were working the situation exclusively from the Altima side of the deal because of my cashflow situation...so I would be looking to get cash/check for the difference of the trade-in minus what I owe on the Altima (so at best case 10.7k-6.7k = 4k) and then finance the Focus, using the 4k to pay the monthly payments (well, that's the plan!). I'm not even sure the dealer would ever show me 10.7 on the Altima, my guess is they would get to around 9 and then try working from the other end (Focus).

I really want a 2000-01 Protege but they are hard to find in Pittsburgh. I did find a 2000 ES with 84k miles, pw, pl, roof etc for 4.9k. I did not have a chance to look at it yet. It's probably a safer bet given reliability, cost to maintenance fuel costs, etc...

jlawrence01

***Well... not higher than that Volvo.. I'm betting... ***

I guess I should have said "the right used car".

I find it *very* difficult to recommend leases as great deals in general. To me it is sort of like buying a car at Carmax - a more expensive way of buying a vehicle.

Again, I am one of the few on this board that view vehicles as just a means of transportation.

icedog97

Well, there really shouldn't be any sales tax if the vehicle I am trading in is worth more than the one I buy. As far as I know, in PA, you don't have to pay sales tax in that situation...

I'm not really looking to save money, I am looking to eliminate a payment for say 24 months. The Altima is only 144 a month, but I'd like to be able to spend that 144 on the other short term expenses that I must contend with.

I know it's not the way to buy a car...granted, but it is what it is...

btw...the Altima is going into the autotrader tomorrow...so if you know of anyone that's interested and lives out this way...it will be listed at 11,250...but we all know that's a negotiable amount!!!!

danf1

You are correct about the sales tax. I'm in PA and can verify that for you.

dbauer

my point with the suggestion of the altima was to pay cash for the 2 year lease ~ $6500 or so. then there are no payments and its under warranty the whole time. $6500 for 2 years of driveing a brand new car would be worth it to me...oh wait...it IS worth it...lol.

jlawrence01

$6500 for what, 24k miles works out to 0.27 cents per mile. Add in higher insurance, sales tax, etc. ... and that looks pretty enpensive to me. Sure, you do know that $6500 is all you'll pay but ... WOW!

My costs including higher maintenance costs and $1.50 gas has always been under 0.25 cents a mile on my last six midsized sedans.

That's why I said that I could not recommend it.

driftracer

old Prism/Altima/whatever, and own it as long as you want? You'll spend the same $6,000-7,000, and won't have to turn it in two years from now, or pay higher insurance premiums...

Can you tell I'm not selling new cars anymore?

dbauer

why do people think that insurance is more on a lease???

it used to be, when leasing companies didnt include GAP, but all manufacturer's leasing arms include it, therefore, leasing requires the exact same coverage that financing does.

now if you are talking about liability only compared to full coverage, then thats a different story. the choice to drop to liability is a personal one.

danf1

Insurance is higher on a lease in most cases because you have to carry higher coverages than most people ordinarilly do. Full coverage with a 25,000 maximum may work for a purchase, but most lease banks that I know of require a minimum of 100,000 to protect themselves.

driftracer

I'm referring to, nothing to do with GAP. My standard state-mandated limits are 25/50/25, but on a lease, they're 100/300/100. I have the higher limits on my policy, simply because we live in a very litigious society, and I see the bad side of people and companies on a daily basis.

kyfdx

That might be higher than what you carry, but any person with any assets at all should consider what is required by leasing companies the MINIMUM they should carry..

100/300/100 at minimum.. and, even then.. that isn't enough..

What the state requires you to carry is a joke..

jlawrence01

**why do people think that insurance is more on a lease??? **

Generally, the insurance on a *NEW* car (even on a lease) is greater than the insurance on a **4-5 year old** car. At least that has been my experience when doing my "new vs. used" analysis on my last purchase.

bvigna

I'm thinking about purchasing a 2003 Honda Civic Hybrid. It's got about 22000 miles on it. The sticker is 21,000. The internet price is 17,460. I've been allowed to take the car home overnight and I drove it into work this morning. It seems like a fine car. I'd say it's in good to excellent condition (couple of chips in the bumper...otherwise fine). First of all, I've never really done this before. So I don't even know how to start. But I'm also wondering how much I should start with, and what you all think is a good purchase price. KBB says I should expect to pay $17,855. The trade in value (which I believe that it was) is between 12-13K. According to CarFax, everything is clean.

I look forward to any advice at all.

Thank you in advance,
Bill

kyfdx

A brand new '05 Civic Hybrid is only $20,500... Even if you pay MSRP. I would never buy a 2 year old car to save only 15%.

I don't know what a good price on that used one is... but I'm pretty sure it is a lot lower than $17,500..

regards,
kyfdx

dbauer

my advice may or may not be accurate, but if it were my own deal, my offer would be $15500 + TLF. but depending on your location, be prepared to pay the "internet" price if you really want the car.

bvigna

I live in the Northern Virginia (Washington DC) area.

dbauer

if it were a regular civic, your resale value would be similar. in the DC area, eco-friendly vehicles are at a premium, so i would expect to pay a premium for this vehicle. offer less, and see what happens, but again, be prepared to pay the internet price.

kyfdx

Honda is offering 2.9% financing on Civics for up to 60 months... Hybrids included...

No way I would drop $17,500 on a used one...

guss

I believe there is still a tax deduction on NEW hybrids bought in 2005. Last year the deduction was $2,000.

You will not get that on a used model.

dbauer

the tax deduction was supposed to dwindle year-by-year. i think the deduction is only $500 now.

kyfdx

Actually, I think it is $1500 now.. dropping by 25% per year.. $2000 last year, $1500 this year, $1000 next year.. etc..

Unless it has changed since early last year..

dbauer

when i was selling hondas in 2002 and 2003, they said 2002 would be $2000, 2003 $1500, 2004 $1000, and 2005 $500.

since i left honda, i havent kept up with it, though. did they extend the $2000 deduction?

kyfdx

I am almost positive that they still had the $2K deduction for tax year '04... Which would work out to about a $500-$600 tax savings for most people...

kyfdx

Looking at the IRS website, it looks like they extended the full credit through 2005, with it dropping each year after that....

dbauer

cool...good selling point for my escape hybrid. ;-)

kyfdx

And.. one more thing... I don't think they have slowed down the phase-out.. If it isn't extended, the deduction goes right down to $500 in '06...

jlawrence01

Per IRS Publication 535, there is a tax CREDIT of $2000 for purchase of a qualifying vehicle.

A CREDIT means that you can deduct the amount of the credit off of the tax owed. Therefore, if you get a $2000 tax credit, you will pay $2000 less in taxes.

There is NO DEDUCTION for these vehicles as stated in post #295.

kyfdx

The credit for business use is different than the deduction for personal use...

You deduct the $2K for personal use on line 34.. A deduction, not a credit..

Publication 535 is confusing on this matter.. but, there ya go..

regards,
kyfdx

kyfdx

Clean-Fuel Vehicle Deduction Available for Certain Models

The original purchaser of a qualifying hybrid gas-electric car may deduct $2,000 for the year the vehicle is first used, if that year is before 2006. In 2006, the deduction is scheduled to drop to $500.

dbauer

another point...

"The original purchaser..."

kyfdx

Good catch.. yes.. you have to buy a new one..

cwh82

I am thinking about buying a used car on Yahoo Autos. It is a private seller. I have been contacting this seller via email, he says he is out of the country, but the transaction would be like this:
If you decide to buy the car this is how the transaction will be :
- you will have to make a down payment and send the details to Yahoo.
- as soon as they will check that the payment was made they will proceed with the delivery of the car at your address.
- you will have a 10 days inspection period to check and test drive the car.
- if you will decide to keep the car then you will notify Yahoo and they will release the funds to me.
- if you will decide not to buy the car then you will get your money back and the car will be returned on my expense

I have never bought a car on Yahoo before, does anyone know if this is the process?

Sorry for the long post

kyfdx

Gee... and the price is just unbelievable? Like $10K less than any comparable model?

This is the biggest scam going.. You send your money, and that is the last you will hear from them....

steine13

..but look on the bright side... it's only the down payment that's gone, not the entire sum.

Scam lite.

-Mathias

bolivar

The seller is 'out of the country'.

This is an internet transaction.

RUN AWAY! RUN AWAY! RUN AWAY!

Kirstie_H

To help with writing an online shopping article in a national magazine, a reporter would like to speak with anyone who bought a new or used car or truck off the internet. The reporter is especially interested in hearing from folks who got great deals. Please respond to jfallon@edmunds.com by Thursday, March 24, 2005.

cwh82

I think it is a scam too. It is sold through Yahoo though, so wouldn't Yahoo be able to do something about it.

icedog97

I'm the "apples and oranges" guy (see earlier posts). I ended up looking mostly at oranges (ford focus). I worked with a dealer over the past few days and I have been trying to make something happen but I'm at a sticking point.

If you care/dare to submit yourself to the pain, read on:

2001 Focus SE, dark blue with 69K miles (a bit high). pw, pl, cc, air, auto, cd, spoiler, alloy wheels...has some cosmetic blemishes...like a small dent in the trunk, one in the driver side door and a small "pry" in the hood near where the hood and fender meet at the bottom of the front winshield. I checked car fax and it has been sold at auction 2 times, most recently about a month ago. I am guessing it could not have sold for much more than the kbb trade-in value which is, given the blemishes, about 4k. It's obviously been around a little. Sticker says 7.988K

My car is a 2001 Altima SE, in great/clean condition, 36.6k miles. with power everything (except seats), fog lights, alloy wheels, 6 cd changer, sun/moon roof..etc...kbb of about 8.6k. It was just inspected, has new tires (2 months old) and just had an oil change. It will probably cost them next to nothing to put it on the lot.

I owe 6.7k on the Altima.

I'm in a cash crunch and trying to get cash/check from the dealer that's equal to the equity I have in the car (let's say 8.7k-6.7k = 2k) plus what he will take off of the Focus.

I'm thinking this sounds reasonable:
They give me 9.7K for my car (1k over kbb)
They sell me the Focus for 5.5K (1.5 k above trade-in value)
I get a check for 3K and finance 5.5K (no sales tax)
I end up with a 48 month payment of about 136 (figure 8% as just something to throw in there)

Am I crazy? Aren't they making (assuming they spent 4k on the Focus) at least $500 on the focus and then they can turn around and sell the Altima for at least 10k, probably closer to 10.5?

What would a dealer consider to be reasonable in this case?

What am I missing (besides a brain at this point)?

driftracer

think that it's nuts to trade a LOADED, low mileage Altima for a beat up, high-mileage Focus, to only put $2k in your pocket, provided they would even agree with your deal.

You're asking them to give you $1,000 over KBB, which happens nowhere, at no time, to pare down your payment by a few bucks?

The Focus isn't a bad car, but trading a 36k Japanese car that'll go 250,000 miles without a hiccup for a 70k mile Focus (with a history of fuel pump and engine management problems), that needs $2,000 in body work?

I'm not dogging you, but what am I missing here? If you could drop from a $500 payment to $136, buying a miled up, beat up car might make sense, if you HAD to drop your payment several hundred dollars - but maybe not even then...

icedog97

In response to "I Personally"

I have a cash flow problem. I have a car payment that, for the next 24 months, I need to redirect into a payment for other "unforeseeable expenses" that have come up. So I was looking to get cash...like 3k to "tide" me over through that period. If the Altima could get me that cash then essentially it would pay for 24 months of a car payment on the Focus - whereas today, that car payment comes right out of my wallet (but that money needs to go elsewhere now).

The Altima is only used for taking me to work, so the "extras" on the Altima are nice, but when faced with money concerns, not needed.

The Focus does not look like it needs 2k worth of work. The overall paint condition is good, it's just some little things that keep the car from getting top dollar at retail time (IMO).

I'm just asking if the $$ looks fair. The dealer was already saying things like "What if I could get you 3k (over what's owed) for your car? Would you do it if I could get you 3.3K for your car?" So the sales manager was going out there a bit with my Altima. I just don't want to get stuck on both ends. He could say "Here's 3.3k cash." and then add money on the Focus price - which helps but puts me in a whole after 24 months. So, I thought my numbers were close on both sides, given that he had started this line of negotiating in the first place.

Does that help at all? I'm just trying to see the picture clearly myself.