i need to buy a car should i buy a new one or old. Is it better to pay cash for a car or pay some then finiace?
When you look at the high price of used cars, the limited availability, folks who think it is ok to go 10,000 miles between oil changes, compared to the aggressive marketing of new cars, plus the long warrenties, I think you should look at new. Whether to pay cash or finance is just math. Finance rates are anywhere from 0 to 4% now on new cars. CDs are around 1-2% but the market is returning 8-15% on mutual funds. If you can get a low interest finance rate, take it and invest the money. Of course just IMHO. Principles give way to math.
First thing is to figure out your budget. I recommend borrowing no more than what you can reasonbly repay in 36 months, and with a large enough down payment to avoid being ‘upside down’ in the loan (owing more than the car is worth). To do that you’ll need to put 25% or more down, approximately. Buying with cash is OK, as long as you aren’t depleting money you need in case of an emergency, or that you should really be investing long-term.
I prefer to buy new and keep for 10-15 years, but that’s me.
Do You Need To Establish A Credit Rating ? If So, Then Financing Could Make Sense. Loan Rates Are Very Low. You Can Pay Off Early If You’d Like. Otherwise, Just Cash Out On It.
A good compromise between new and used is an almost new, very low mileage manufacturer’s Certified Pre-Owned car. They have warranty coverage that’s backed by the manufacturer.
The cars are often “fleet” rental cars or cars driven by manufacturer’s employees. All the ones I bought were former rentals.
I’ve bought several. The last one was 15 months old with about 10,000 miles on it. The car stickered new for upwards of $24,000 plus tax and I paid $14,000 out the door. The car looked new, smelled new and drove like new. It’s been great.
I got the balance of GM’s 5 year/100,000 mile drive train warranty and the 36 month/36,000 mile bumper-to-bumper warranty was extended to 48 months/48,000 miles as part of the Certified vehicle program. Other than adjusted for time and miles, these warranties are the same as the ones that come with a new car. They’re not compromised.
Note: these warranties run from original in-service date.
Not all the Certified cars are super deals. You still need to shop and compare to find one that is. It took me a while and I negotiated a deal.
CSA
There is a great deal of wisdom and wise cracks here, and it would be helpful to have some insight into your finances, debbie 50. If you can easily afford to write a check for the car you want then do so. But if not, how much can you put down and keep enough reserve for an emergency? How, specifically, will the car be used and in what climate? In general it is much more economical to buy a used car and pay cash and very uneconomical to buy luxury and status on credit.
I would add that perhaps the best way to determine if you should pay cash for a new cars is to ask yourself if after doing so you’d still have enough reserve to comfortably keep your bills paid for a year should you lose your income. If you will, than buy cash.
We don’t know your situation. I know a few people that retired first from the military, then from the state, and now earn good incomes in a third life. They have no concerns about income and could easily and safely buy a new car cash. I know others who earn good incomes, but would quickly go broke if they lost their jobs. They need to have a reserve. They’d be better to take a loan. In some cases, no a used car instead of a new one.
My daughter just bought her first car, and she financed it through her credit union to build a credit rating. One good thing about financing through a bank or credit union is that they won’t let you borrow so much that you are unlikely to pay it back. The terms can also be attractive. Check them against the dealer terms, too. Our loan terms were best through the credit union, but that isn’t always the case.
We also bought a 2 year old car with 14,500 miles on it for $10,000. The price new was about $17,000. You can see that there is an advantage in price when you buy a used car. And while we have 10 months or 21,000 miles remaining on the warranty, a new car would have no miles, no previous owner worries, and 3 years/36,000 miles remaining on the warranty. You need to decide what makes sense for you financially today and in 3 or 4 years when the loan is paid off.
It is usually better to buy a two or three year old used car provided it is a model high reliability ratings. Consumer Reports has a used car ratings guide most bookstores and libraries have. Make sure you choose a make/model/year with excellent reliability, then if you can find a 2 or 3 year old car like that, you’ll be money ahead. Way ahead.
Another way to check out the reliability is to compare Kelly Blue Book prices. A make/model/year that proves to be a lemon makes news among car-folk. If different models sold for about the same price new, and according to the Blue Book, one of them is selling considerably lower than the other used, that implies that one isn’t as reliable, as it isn’t in demand as a used car. It’s known to be unreliable.
It’s better to pay cash if you can afford it. It just makes the transaction simpler. Especially for private party sales. But there’s not much disadvantage to fianancing it either, provided you can get a good rate.
If you decide to buy a used one, look on the Car Talk website. They guys probably have some advice on how to go about it.
It is usually better to buy a two or three year old used car provided it is a model high reliability ratings.
The problem there is that those cars usually command a premium, just because of the badge on the grille. I can guarantee that if JT bought a 2 year old Honda or Toyota that sold for $17k new, they’d have not budged from $13~15k when negotiating.
i need to buy a car should i buy a new one or old. Is it better to pay cash for a car or pay some then finiace?
This question is so vague that it’s difficult to answer.
1: What is your budget?
2: What do you plan to use the car for?
3: where do you live?
4: What are your needs in terms of accessories/options?
5: What are your wants in terms of accessories/options?
6: Do you care about MPG?
7: What type of vehicle are you looking for? coupe? sedan? Hatchback? Truck? Minivan?
Answer those questions for us and we’ll be better able to help you out
In addition to the other thoughts let me add that it may depend on what"s available. A used car with an excellent maintenance record in the color and with the options you want may be very difficult to find. I can only say from a personal point of view as an example, in our family, it was better to buy a new car in the color my wife could order then have discontent with a car in good mechanical shape she couldn’t stand to drive. I know that reasoning may sound a little trite, but sometimes that’s just the way it is.
I think bscar2 is making that point with detail questioning very well.
Good point. It has been said that if car lots were set up for women, they would be arranged by color. Actually color and options are important to me too.