Car buying advice
Planning to buy a (pre-owned) CUV in 6 months. New grad in the bay area. Any advice/tips/must-do ? also, any negotiation tactics? will maybe put 5k on booking and rest finance it for 12 months. can i negotiate insurance numbers too? want to spend 25k tops final price (including tax, registration and insurance) Have excellent (750+) credit score. yoe: 0 (still in college, using friend's account) tc: 200 age: <25 yearly drive: ~6k miles on average.
Congrats on the new car and very smart approach. I did some math and determined $36k is the max you should spend in your car. But you are making a mistake with the financing, at $200k tc, you should afford $5k/mo of savings, save more! And pay cash.
(copy paste from previous comment) Not doing lease. Any strong reason to do cash? I graduate in 2 weeks (and start job in 8 weeks) and have ~80k loan. So I plan to pay off huge chunk before buying the car and then manage both the monthly payments. Planning to pay in cash will delay the purchase (which I don't want to delay cause of personal reasons). I understand that interest will rack up on mortgage but < 3% on ~20k for 12 months is a reasonable deal IMHO. Thanks for helping.
Get a civic You will thank me later Used 2017 civic with 30k miles should be easy 13k$ base version
Must dos - Be sure you find a reputable seller/dealer. This is easier If you already have a relationship with a top flight repair shop who will steer you right. I highly recommend Embarcadero Automotive in the city, who took care of my cars for many years, and referred me to a terrific used car dealer in Napa when I needed a new (used) car. It was my first used car purchase, which scared me to death, but I got a great vehicle at a very good price. I’m afraid I don’t remember the company’s name, though. Know the Blue Book value of the vehicle you want, as well as what you are willing to pay - and be sure you are being realistic, allowing them to make at least some profit. Be willing to walk away if they won’t get close enough. Don’t fall in love with the vehicle so much that you cannot do this. You’ll have to do some research on this. Always check the Carfax. You want a vehicle that has had only one owner, and has had no accidents. If you can afford it, buy a car that’s still in factory warranty. Then buy an extended warranty - after researching to find out the best ones. If the vehicle is still in warranty, you’ll be able to get a new car extended warranty, which will be much cheaper and more inclusive than a used car one. Get the extended warranty either way, though. Arrange to have a mechanic of your choice inspect the vehicle before you purchase it, if possible. AAA used to offer this as a service; I’m not sure if they still do or not. Don’t buy insurance from a car dealer! Get it from a reputable agent/broker. You also need either renter’s or homeowner’s Insurance, and you will get better rates on both if you buy them together. You should also get umbrella liability at the same time. Also be sure you have gap insurance to pay the car off if it gets totaled before you have done so yourself. Insurance rates are fixed (and high), but you can affect what you pay by the limits and sometimes the features you choose, whether or not you wear your seatbelt all the time, and if there’s a security device in the car. At your age, you will also get a significant discount if you have taken and passed an approved driver’s ed class - like around 10% per year, which will save you a *lot* more money than the course would cost if you need to go take one. If you can get your parents to put the car on their policy (and maybe in their name), that’s another way to lower the cost of insurance. Be sure there’s no early payoff penalty on the loan. I think they may be illegal now, but I’m not sure if that’s just here in Pennsylvania where I currently live or federal. Look into loans from banks and especially credit unions; dealer financing usually costs more. HTH
If you can help it, don't buy a car. Seriously. If you have a job that's either transit connected or will shuttle you to work, transit + ridesharing will save you hundreds in gas and insurance per month, and you can put (some of) the money you were going to blow on a car toward paying down your loans or saving for retirement instead. If you're buying so you can occasionally take weekend trips or similar: still cheaper to rent a car for the occasional outing than it is to buy, insure, gas up, and park a car in the Bay Area. If you must, buy something outright (no leases or loans), be willing to pay cash, and buy a used car.
Pay cash. Don’t do a loan or a lease. Usually end of the year is a great time. Carmax has good cars.
Not doing lease. Any strong reason to do cash? I graduate in 2 weeks (and start job in 8 weeks) and have ~80k loan. So I plan to pay off huge chunk before buying the car and then manage both the monthly payments. Planning to pay in cash will delay the purchase (which I don't want to delay cause of personal reasons). I understand that interest will rack up on mortgage but < 3% on ~20k for 12 months is a reasonable deal IMHO. Thanks for helping.
It's not a big deal. You need the car more than you need a couple k savings on interest. Just pay it off all your loans early based on interest rates. There's value in having useful assets early, just as there is value in having fluid capital available early.