Mary asks…
Question about how to best get out from under current car…?
I bought a new SUV in April 2007. I currently owe about 4K more than the book value of the car, but am really interested in getting something else, more economical. With gas prices at $4 per gallon and only going up, I really need something else. In this “upside down” situation, is it best to try for a new car where I can possibly get rebates and/or special financing deals or a used car, about a year old? I have been looking at the Nissan Altima…nice car, BTW. It’s not so much the car note I can’t afford…it’s the gas tank that is draining my wallet dry. HELP!
Driving less is a good suggestion…however, I live in a rural area with no mass transit and I commute about 45 miles round trip to work everyday, not to mention running with my kids, running errands, etc. So generally speaking, I really can NOT drive much less than I currently do.
CSC101 Customer Service answers:
Your best option is to drive less. You would only be more upside down if you traded off the SUV and you probably would not gain any ground with what the payments would be on a new car. Values for SUV’s have plummeted with the rise in fuel prices.
Daniel asks…
Best used cars – What type of car is reliable and affordable?
Hi, I was reading Dave Ramsey’s Money Makeover Book. In the book, he says to pay cash for a used car. What is a good car to buy? It seems that many ‘not overly used’ cars are pretty expensive and sometimes it seems like a new one, you can get a better deal on with rebates etc.
CSC101 Customer Service answers:
$3K to $4,000
Honda or Toyota from 1998
Civic, Echo, Acura CL, Ford Mustang V6
98 Nissan Frontier or Pathfinder
Maria asks…
Please tell me what you think of the numbers on this new car deal.?
2008 GMC truck.
MSRP 20,780
Invoice 19,418
Price before rebates 19,831
Price after $2000 rebate 17,831
I can either take the rebate or 0% financing for 60 mos.
What are your thoughts on the dealer offer of 17,831?
(I always pick best answer. Thank you)
price doesn’t include dealer and handling, or taxes and registration.
CSC101 Customer Service answers:
Ok – These figures don’t include taxes or fees because I don’t know what you would have to pay. Also, I didn’t use any downpayment because I don’t know if you trading in something or putting money down.
$19,831 at 0% for 60 months = $331 (rounded)
$17,831 at 6% (just using a guess) for 60 months = $345 (rounded) – Your total interest is around $2900. You would pay $900 more if you take the rebate and go with regular financing.
On the flipside to that – Both contracts would be simple interest and they shouldn’t have any prepaymet penalties, so, if you pay the contracts off early, lets say in three years, your estimated interest on a three year term with 6% is $1700, so you would save $300 by taking the $2000 rebate. There would be no incentive for you to pay off the 0% contract, other than to get rid of a payment.
Also, If you decide to trade the vehicle in, about 2 to 3 years from when you buy it, you will be more “upside down” because you didn’t take the rebate.
This is what I would do in your situation. I wouldn’t pay anything over invoice. First, I would shop the banks and credit unions for interest rates. Credit unions usually have better rates than banks. I would then get preapproved for the amount that I need (sales price after rebate plus taxes and the yada yada fees). If they make me pay for the doc fees, I would want to get something for that, maybe three or four oil change coupons for example. (doc fees, processing fees, yada yada fees are pure profit that the dealer screws the sales person out of (hence they make it a fee so they don’t pay comm. To the sales person).
I would then walk into the dealer with a blank check (hoping your bank approves you for (x) amount but leaves the check blank). Lets say the total price is $19,500 (OTD out the door), offer them $18,900. Tell them you got a check in your pocket right now for $18,900, thats what the bank approved you for. Use your poker face and tell them your tired of playing around. Most of the time, if the dealer can stay within a couple hundred dollars of invoice, they let it go.
Try that and see if it works. Just make sure your approved. Oh, if your interest rate is a little higher than 7.5% and/or you don’t want to pay off your vehicle early, I would suggest going with 0%.
Courtesy of Y!Answers