Purchasing Strategies - Questions & Success Stories

humblecoder

so here's my question - am I crazy that thinking that this is a way to get rid of the negative equity - please note that the Cadillac is one year older and has 20k more miles - but the value is much higher - ok let me know anyones thoughts.

One thing that nobody brought up is that you seem to be determined to want to get rid of "negative equity" at all costs, even if it is doesn't make financial sense. From what it sounds like, you want to go from owing $6K to owing close to $30K just so you can say that you aren't upside down on your vehicle. You're going to be taking on more debt, a bigger car payment, and be paying off that car for a lot longer.

As harsh as this sounds, it really seems like you want to rationalize the purchase of a luxury vehicle. Look if you want to buy a bling-mobile, then more power to you. However, just don't delude yourself into thinking that somehow this makes good finanicial sense, because it doesn't. It is a vanity purchase, pure and simple.

If you want to do something "smart", then continue to pay down your minivan until it is paid off and then drive it until the wheels fall off. That way, you won't have to concern yourself with negative equity.

Also, I just wanted to mention that a double digit rate is not a great rate. Either the dealer is trying to pull a fast one, or your credit score isn't the best. Either way, that should be a sign that you should just walk away from this deal and FAST.

verdugo

I mentioned. See post 3391 ;-)

euphonium

By now you have read quite a few replies, but you still want the Cad. However, you have
been led to believe you could keep on borrowing money to finance a lifestyle you haven’t earned and can’t afford.

Honor the contract on your present vehicle & pay it off.

jmonroe

Again I’m late to a forum that has gotten its second wind.

You've hit this one right on the head 'dino' and so have the others.

The man wants the Caddy.

He sure does and why are the rational/mature posters here trying to keep this buyer from getting what he/she deserves? If this continues you’ll have soft heads from beating it against the wall-of-reason and the poster’s head will be as hard as it ever was. :confuse:

When somebody wants something really bad, they'll always come with those kind of justifications to the point that the dealer is practically paying them to switch .

The poster has already given countless reasons why it’s a good deal. But does he/she really know a good deal? With an 18.99% rate what could actually be known. I have to think this rate is out of sight for a reason but the poster says they don’t have a cash flow problem. So, could there be some “fuzzy math” showing its head here?

I’m also waiting for the post where this isn’t a sale after all, it’s a give away program that none of us will ever get because we don’t believe in them, Santa Clauss or the Easter Bunny.

jmonroe

snakeweasel

He sure does and why are the rational/mature posters here trying to keep this buyer from getting what he/she deserves?

First off no one deserves a caddy or any car for that matter. Secondly if he wants to buy the caddy then he can, no one says he cant. The problem is he is using getting out of being upside down on his van as a reason for buying the caddy. I seriously doubt that he will be getting out from being upside down, I really thing that he will be getting himself deeper in the hole.

If he just wants the caddy fine.

If he wants to improve his financial situation then its a bad deal,

jmonroe

First off no one deserves a caddy or any car for that matter.

You missed where I was coming from here. You don't usually do that so I'll attribute this to the looong tax season. When I said "deserves", I meant, with all the rational advice the poster had gotten he/she still didn't get it. So going further into debt is what was the poster must have wanted.

If he wants to improve his financial situation then its a bad deal,

That's what we've all said but its fallen on deaf ears.

Aren't you glad the tax season is almost over? My brother can't wait. He said, "there had to have been something added to the water this year because he's had more than his share of wackos compared to years past". :confuse:

jmonroe

thenebean

i think a lot of the wackos are coming out this year because in order to receive that tax relief thingy that the pres is handing out, you have to file your taxes this year. we all of a sudden had a bunch of people here questioning tax issues that were issues for many years past, but they never noticed because they didn't file for those years, but because they HAVE to file this year to get that tax relief money, there are just that many more loonies to deal with.

sorry to get off topic. im outta here tomorrow anyways - hooray!

as far as the advice given above, i agree with pretty much everyone. he seems to be trying to get justification that this is a good financial decision, which it is not. if he just wants the caddy, then that's his business.

my two cents...

-thene :-)
"cars are great! yay for cars!"

countrytina

Hi there,

I am having my fiance help me in doing all of my initial research but i thought id also post here to get some advice on a ballpark what we should not go above for pricing for the following 2 cars.

2004 saturn ion 2 -- 4 dr sedan 63,000 miles.

according to edmunds, the delear retail is $8180, the private party is $7120 and the trade in is $5951.

We ran an autocheck history report and all is clean it it appears it has only one owner.

The dealer is asking $7850 for it.

The next car is another saturn ion 1 and 4 dr with 67000 miles on it.

According to edmunds, the dealer retail is $6580, the privat party is $5542 and the Trade in is $4389.

The autocheck history shows all is clean and dealer bought it at an auction. it appears it was at the auction for 3 months.

The dealer is asking $7100.

This is new to me and i just want to make sure i am getting a good deal and not going in there and offering something too low either.

Thanks in advance,

Tina

thenebean

hi tina,

I would suggest also making your post in the "Real World Trade in Values" forum. There are a couple of salesfolks in there that can get you real world numbers on what those cars might be worth, vs. what the books say (which are guidelines). Make sure you are as detailed as possible with describing condition, equipment, trim levels, location, etc.

Good luck!

-thene :-)

oldfarmer50

"...Aren't you glad tax season is over..."

Finished mine last night. Proud to say, this year I did them without excessive consumption of adult beverages or using profanity at higher than whisper. It was quite a fight but once again I defeated all that the Feds and NYS could throw at me. I thought about opening the window, tearing my shirt and roaring like a wild beast who has just emerged victorious from a life and death struggle. Instead, I just had a beer. :mad:

Have you guys considered that the poster wants the Caddy for the tax break that vehicles over 6000 pounds get? Snake can probably advise him on this. Maybe he should get a Hummer too.

oldfarmer50

"...advice on a ballbark..."

It's been my experience that there is at least 20% of the dealer asking price to play with when you start to negotiate. So your $8180 could go for as little as $6600. In the end a lot of other factors will effect the outcome too.

More important than price is the condition of the car. It's no bargain to save $1000 on the price and then have to spend $2000 on a bad transmission. Have the car checked out by a professional. $100 spent now might save a lot more later.

Good luck.

jmonroe

I defeated all that the Feds and NYS could throw at me.

I got the Feds for a little over a Franklin. I don't live in NYS (it's PA for me) and eveyone over in Stories From the Sales Frontlines has heard about me having to pay 1.5% of my gross for local taxes that weren't deducted. It was my fault for not being observant but I made them wait till yesterday till I wrote the check for that. :mad:

Maybe he should get a Hummer too.

I never could understand why anyone would want an ugly/unreliable beast like that. I always said if you want to drive one of them, the Army and Marines are looking for a few good drivers and they'll let you drive one all day long and at night too in a warm climate.

jmonroe

camperd

Wow, you guys are brutal - as far as the hardness of my head, I'm going to have my house foreclosed, I don't deserve a particular lifestyle, etc... as these type of statements come from several posts - I continued sharing more information so that people could have a complete picture of both the vehicle and my situation - the caddy has been sold and not me and I am fine with it - I turned to this forum for advice on real values - oh and by the way yes you can get rid of negative equity without refinacing, paying off a current loan, etc.. - but it does need to be right deal at the right time - hence my original post - as far as the other comments from posters adding their thoughts that frankly were rude and presumptuous about my state affairs I have a debt to income ratio of less than 17 percent - I make well into 6 figues hence my statement of cash flow not being a issue - yes, we made some mistakes that resulted in poor interest rates and we are paying for it - but to try and better's one position is always a good route to follow - I think a good portion of you found this as a opportunity to provide less than fatherly advice as opposed to providing sound insight on the post as questioned - some were kind enough to actually post their opinion on the deal alone and thank you for that -

as for the rest of you - quit posting to edmunds at 3 and 4 in the mornig, get a job that pays and then thoughts of foreclosure and destitution and such won't enter your minds when you are invited to provide advice - but this is a public forum and I guess that opens it up to anyone with a computer, internet access and a few penny's of advice to throw out there.

so I wish you all the best and I'll gladly seek future advice from another forum hoping that you guys are too tired to post to multiple sites.

grandtotal

As with any internet forum the advise you get is worth exactly what you paid for it.

This forum is no different from any other in that people have a tendency to answer the question they think you are asking not the one you are actually asking.

Personally, I don't fear a recession because in pure numerical terms the difference between a recession and the normal state of affairs (whatever that is) and indeed between a recession and a 'booming' economy is actually a lot smaller than most people (obviously not the geniuses who post here) realise. When a recession matters is when it affects you personally by depriving you of your livelihood. For everyone else it doesn't matter a whole lot (unless you believe the gloom and doom predictions that appear in the media).

verdugo

First of all, I'm glad you didn't turn out to be a troll and you came back and let us know the result.

I'm glad somebody else bought the Escalade. You will be better off in the long run.

Question for you, could you please offer more details on what you said regarding:
oh and by the way yes you can get rid of negative equity without refinacing, paying off a current loan, etc.. - but it does need to be right deal at the right time ?

I'm not really sure how that can be accomplished.

Thanks.

oldfarmer50

"...provide less than fatherly advice as opposed to providing sound insight..."

If you want fatherly advice , ask your father. Yes the posters (myself included) can get a bit sarcastic when they see what appears to be someone using a forum to justify a bad financial decision. If I went overboard to point that out I'm sorry and as some one else said, free advice is worth every penny you pay.

For what it's worth, if you've made bad financial choices in the past and now have a high interest rate you should use that six figure income to pay off your loans and rebuilt your credit. I know of no way to erase negative equity by borrowing more. Maybe I'm just too worried about foreclosure and destitution to think of one.

jipster

The 5 day delay between your posts asking for advice suggests a lot of things. One of which would explain the predicament you are in.

dino001

There is an old saying, that don't ask a question if you may not like the answer...
Regarding possibility of way yes you can get rid of negative equity without refinacing, paying off a current loan, etc I see a few illegal ones plus perhaps inheritance and sweepstakes. There is no free lunch - plain and simple. One-two, perhaps, not eight. Moreover, "value" on dealer's lot (retail) is something different than value in your garage (trade-in). No dealer would sell a car 8 thousand below its actual value. They'd get better price at an auction - so why selling it to you?

Those not-so-nice comments came (mostly) after you reiterated that you still wanted that Caddy, even though it was clear to everybody it wasn't going to solve your negative equity, but rather put you deeper in debt (which you initially declared you didn't want). That contradiction made some people jump on you. Perhaps not nice - just remember, YOU asked the question

stickguy

Yeah, in theory, it can go away w/o paying it.

But, since NE is asset worth less than loan, you need to trade it for another asset/loan set up with a smaller difference.

Besides, negative equity, like capital gains, really means nothing, UNLESS you sell the asset and have to pay the loan. Otherwise, it is just a theoretical number.

Like a house. I can say I have 250K of equity, but unless I actually sell it, (or take a HELOC I guess), it is just a concept. And if it goes down to 240K next month, I did not "lose" 10K

jmonroe

And if it goes down to 240K next month, I did not "lose" 10K

That's the way I look at it too. I have to go through this when Mrs. jmonroe looks at our investments (401K, and others) and she happens to look on a bad day then says we lost money today. I say it's funny money and you only lose if its up today and you HAVE to take it out tomorrow and it's down tomorrow. That's when it's a REAL loss. Until then I don't want to hear about it.

Once more and I'm going to change the password. :mad:

jmonroe

stickguy

You still own the same tangible asset (the car, shares of a mutual fund, the house). what someone says it is worth at any point in time really doesn't matter, unless you actually sell it.

snakeweasel

what someone says it is worth at any point in time really doesn't matter, unless you actually sell it.

Not in my world, if you are recording these investments for a company any gain in value is not recorded until the investments are sold. However any loss in value is reported as unrealized loss and the investment is carried on the books at the market value until such time as the market value is higher than cost. in other words you record an investment at the lower of cost or market value.

Thats your accounting lesson for the day now get back to work.

jipster

Thats your accounting lesson for the day now get back to work.

OUCH! Tax season must be getting to you snakey. I've never known you to be so curt. :sick:

Maybe, you should consder a career in auto sales... where there is less stress and pressure. :surprise:

sellaturcica

There's still quite a bit of stock in new 2007 Miatas in my area, I even have a choice of color that I want. Anyone ever bought a new car almost a whole year after they hit the lot? What kind of a discount can you expect?

oldfarmer50

"...What kind of discount can you expect?..."

Well, sitting in your driveway it loses about 20% a year. Why should it be different because it's sitting in some one else's drivway? You may want to give some consideration for the low milage.

$24,000 -- 40% = $14,400 + $2400 for low miles ($0.10/mile) = $16,800.

Remember. a 2007 is now a two year old car if the 2009's are about to come in.

joel0622

Well, sitting in your driveway it loses about 20% a year.

Does that mean all 5 year old cars are free and we can get paid for buying a 6 year old car?

oldfarmer50

"...Does that mean all 5 year old cars are free and we can get paid for buying a 6 year old car?..."

Only if you are a car dealer.

tidester

Does that mean all 5 year old cars are free ...?

20% depreciation per year works out to the car being worth about 33% of its original value after five years. That is unless you're talking straight-line depreciation in which case the depreciation rate is 100% in the last year. :shades:

tidester, host
SUVs and Smart Shopper

pinnumberr

Hi all. For some reason, I could not search on past messages this morning.

Just wondering what you all suggest as best method to put a deposit on vehicle. I've been reading some of the horror stories of people putting one down and then fighting to get it back. So let's say you agree on a vehicle and wish to come back to pick it up when ready (next day or two):

- how much deposit amount is customary?
- should I pay by check or credit card?
- any other things regarding deposit that I should be alert to?

Thanks!

snakeweasel

20% depreciation per year works out to the car being worth about 33% of its original value after five years.

Technically that would be declining balance depreciation.

exb0

Always use a credit card for deposits. This way you can get the credit card company to credit your account if transaction goes sour and you don't take a delivery.

dakineguy

I have a question regarding when you should tell the dealer that you want to trade-in a car. Seems that if you tell the dealer about a trade upfront, they will use the trade to leverage the overall deal in their favor. If they give on the new car, the trade will be less. The converse is true if they give you a high amount on the trade, the new car will be less.

mikefm58

You should tell them right upfront, why hide it. It's not going to change things in the end. Most will say to negotiate each part of the transaction seperately, first the purchase price of the new vehicle, then the trade-in amount.

kyfdx

I think it depends on whether you have to trade the car in.. If the only way to do the deal, is for the selling dealer to take the car in trade, then I agree.. no point in keeping it out of the deal...

But, if you have the option to sell it yourself, or sell it to CarMax, then you need to know exactly what the dealer is offering you for your car, outside of the new car deal.. You want the bottom number on the new car... and the ACV of the trade-in. If you put that all together from the start, that will be hard to determine..

I don't mind letting them know that I have a car that I need to sell.... But, I want the best number on the new car, without taking the old one into account..

regards,
kyfdx
visiting host

Kirstie_H

A reporter would like to talk drivers above the age of 50 who chose a vehicle because of a specific feature that made your driving experience more comfortable. Please respond to ctalati@edmunds.com with your daytime contact information along with the vehicle you chose and the feature that you really liked no later than Tuesday, June 3rd.

jaysherman

Dont try to hide the trade, dealers are not blind to that tactic. You can negotiate it usually and shop it at other dealerships but just dont fall for the "shell" game where they raise your payment, interest rate, price of the new car or other products. Get a committment on all those aspects of the deal and shop it if you want the best deal.

joel0622

All that matters is the trade difference. The folks that try to hide stuff from us like we have never done this before and slow the process down are usually the ones that complain about it taking to long.

dogboy8

Thanks in advance for any advice you can offer for my situation.

On May 14, we decided to buy the Spectra Blue '08 Prius. Two days prior, I had obtained multiple web quotes, the lowest of which happened to be from my closest dealer. We went in person and asked if he was willing to meet the lowest price we could find, to which he agreed, although stating that we would not be able to find anything below sticker given high demand and low inventory. The internet price, which was valid until May 17, was $2K below sticker. I showed him this, and he grudgingly agreed to the price. He billed my credit card $500 to get the process moving to get one on the lot.

Since then, we've spoken twice. Once was on May 23, at which point he reiterated how low inventory is right now and that he wasn't sure when our car would come in. We got the next call on May 30, when he told us, "things are really tight. no idea when a car will come in -- it could be six months. in fact, two other orders for your exact car came in on the same day and are ahead of you. are you sure this is still the price you want to pay?" ?!? Um, yeah, we're sure. We know that Prius in our area are now going for sticker price, and that we happened to be lucky w/ our timing.

I'm not sure what to do next, and I"m not an experienced negotiator. We want the car, and can wait a little while. But now we feel like the salesman is trying to re-neg on our agreed-upon deal. Should we just cut our losses and either a) pay more from him, or b) try and buy one somewhere else? Or should we pursue our original price from him?

mikefm58

The exact same thing happened to me when the Honda Odyssey mini-van came out in 1999. The dealer gave me an internet quote, we agreed on a delivery date and time, but when that date came up, the dealer wouldn't honor his original quote saying, "These things are going to be hot sellers, $500 more please".

Some sales folks in the biz are slime balls and I would NEVER give them my business, not at any price. We eventually bought elsewhere, which I'd advise you to do also. You cannot honor that type of behaviour with your business, no matter how much you want the vehicle. If you do, that will only encourage those type of dealings in the future.

jmonroe

We want the car, and can wait a little while.

I suspect you’re going to wait and wait and…

Since they are hot cars there is no incentive for the dealer to sell it to you for less than MSRP. I think they got you hooked with a low-ball offer and now expect you to cave. ‘mikefm’ gave you good advice, “go somewhere else, don’t reward that type of behavior”. It doesn’t sound like they are the only Toyota dealer in your area.

Call the credit card company and have them remove the charge. They’ve gotten requests like this countless times before and they know exactly what to do so you shouldn’t have a problem with that.

I'm not sure what to do next, and I’m not an experienced negotiator.

Now you know and as far as “negotiating” goes if you’re going to buy a Prius there ain’t any of that to worry about. It’s a done deal at MSRP.

Again, go somewhere else.

Good luck and let us know how you did.

jmonroe

personatech

Hi all,

I'm shopping for a midsize sedan to replace my Beetle TDI. The process has been a long one - I really don't know what I want as the "perfect" car has yet to be built . Anyway, very early in the process I contacted the Internet sales person at a Honda dealership who put me in contact with one of their salespeople. I met with this salesman, took an Accord Coupe for a test drive, and while driving mentioned that I was also looking at the Camry Hybrid, Malibu, etc. He said he could show me any of those as well since the Honda dealership was one of several megadealer outlets in the area. He even offered to let me A/B various cars on my list on one visit. Cool. That would make my life simpler.

A while later, I used one of those lead generator websites to get some quotes on a Camry Hybrid (not necessarily what I want, but I was curious how good a price I might get considering the current hybrid hysteria). They farmed out my quote request to a rep at this megadealer's Toyota location. When he called, I thanked him but noted that I was already working with Mr. X. The Toyota rep courteously suggested that he would be able to give me a better deal than Mr. X on a Toyota if I decided to go that route!

So, I'm now in a quandary. I don't want to step on anyone's toes and I want this process to be fair for all parties. Naturally, I also want to get the best deal possible. There may well be some truth to what the Toyota rep is saying because I am sure he is better trained with regards to Toyota products than the Honda fellow. When the time comes to establish a relationship, it may well be preferable to deal directly with a salesperson who represents the make I decide to buy. On the other hand, salesreps are like butterflies flitting from one dealership to another, so I may be putting too much credence in any kind of personal relationship with a salesrep. So... I'm soliciting your comments, perspectives, and experiences: should I contact each dealership directly and sacrifice some convenience, or should I work with the one rep who can show me everything I'm interested in?

alamocity

I've seen on used cars where they will get a vehicle from another dealership in their group but not on a new car, certainly not to the depth you described anyway. I've been given the name of who to talk with at that dealership and they may actually call them for you but haven't seen where they offered to show you everything you're interested in. My guess is that the rules of that auto group allow them to do it so I'd be up front with each and see which on offers the best deal.

the_big_al

my understanding of out the door; and this comes from reading "Stories From the Sales Frontlines"; is that OTD price means everything, including Tax, Title, License, Doc Fees. However that may not be how he may be interpreting it? Unless you live in AZ, I don't think you have to pay AZ sales tax, however you do have to pay for the tax in the state where you live?

the_big_al

I don't care how well the rental car company takes care of thier cars... I would never buy an ex-rental. I am sure the cases of extreme abuse are rare (i.e. the donuts and such), but you just never know. Multiple drivers with multiple driving styles compounded on the fact of multiple passengers with multiple hygine habits and who knows what else.

I feel safe buying a used car, but a rental, to me, there seems to be too much grey area. Maybe some have had good luck. I have never bought a rental so I can't say that I have never had the experience, but that is a risk I don't think I am willing to take.

the_big_al

They were figuring that you would take it home, and you and your wife would enjoy it so much and fall in love with it so much that you couldn't bear to part with it...

Too bad for them you had a good head about you and were able to reason with your self... i.e. the higher car payment, insurance etc and realize that while the car might be more fun to own that the V6 model, it wasn't worth the extra cost.

the_big_al

I will lean towards agreeing with you... and mention a case involving the same model of vehicle.

I had a '95 GMC Sonoma that I bought at 69K miles. Within 2K miles I needed a clutch. After the clutch was replaced I started leaking tranmission fluid due to bad clutch install. Due to the bad clutch install, I ended up replacing the transmision. Along the way, I also ended up replacing most of the front suspension parts.

At around 80K miles I replaced a starter. Around that same time the radio fritzed. Also at some point after the transmission replacemnt the vehcile would periodically fail to shut off after the key was turned off and removed from the ignition. I had to pop the clutch in 5th gear to kill the motor. It was only intermittent but eventually became constant. At 99K miles the fuel pump burned out.

On my way home to replace the fuel pump so I could get it started so that I could figure out how to shut it off, I passed by the Chevy dealership and a couple hours later drove out in an '01 Chevy S-10 (mechanically the same as the Sonoma.) This one was mechanically identical to my the Sonoma except it had an auto trans instead of manual. Same motor, same cab configuration, same drive configuration (2wd). Yes, they were 6 years apart in production, but it was still the same product life cycle with only minor upgrades in the drivetrain.

When I bought the truck in '03 it had 26K on it. It now has 105K on it and nowhere near the amount of problems on it. A few niggles here and there. Alternator, radiator tank and rear U-joint I think is all that I have had to replace. For me, that is all good and well.

Granted, I'll wager that most of the problems I had on the '95 could have all been related to the workmanship and the quality of the repairs, and to the maintenance schedule of the first 69K miles, but one problem lead to another to another to another before it got to the breaking point. Who knows? Once I got it started and the shutting off thing fixed, that it would have been A-ok? With it's track record, I'll bet I would have been fixing something else later on in the month.

Same could be said for the truck I am driving now... at 26K miles when purchased, the maintenance could have been poor, or it could have been great, but there was less time for it to have bad maintenance accumulate and since that 26K purchase point it has recieved pretty good maintenance. It hasn't had an easy life with the way I drive, but even still it hasn't let me down yet... And it still is going strong.

dtownfb

I found this article this morning. While it doesn't exactly address Purchasing strategies, it does involve the purchasing process and some no-no's. I thought it would be a good read for some new to the car buying process.

http://money.cnn.com/2008/07/02/autos/dont_tell_salesman/index.htm?postversion=2- 008070309

robotb9

I had an exchange of several email messages with a salesperson at a local dealer, trying to negotiate a price on a new car. I started out by emailing the generic sales address at the dealer, and he's the person who responded. We weren't able to agree on a price, so I told him I'd buy somewhere else and didn't hear from him again. I really didn't like dealing with the guy.

I'd like to talk to a different salesperson at the same dealership. How do I do that without stepping on the previous salesperson's toes?

verdugo

I don't understand why you would go back to the same dealership after you couldn't agree on a price. Why not go somewhere else like you said you'd do?

robotb9

Because I don't want to cut myself off from that dealership just because a single salesperson and I didn't get along.