If you were buying a car... - Page 3

Actually that sounds kind of... hot.


Now you can be a pretty smart guy and someday you'll get older like me and ask the follow up question to this good bit or reasoning....

Why the hell are used car prices so high when there is such a glut of cars that dealers are having to give employee pricing plus rebates/incentives to give them away?

Nick

As far as I know neither Toyota nor Honda are doing employee pricing. There are some rebate deals though.

My theory on it is that Toyota and Honda used prices are high because those cars hold their resale value pretty well because they are trusted.

Unless you're buying german, in which case the car is going to require ridiculous maintenance dollars after three years of ownership.

Also, KBB isn't a great resource since the user car market depends heavily on regional variables. For example, no one cares about AWD in Florida. There are also oodles of other demographics that affect used car pricing. Try autorader.com,, key in your zip code + 25 mile radius, or whatever, and see what comes up.

That is part of the equation, but a large part of it has to do with credit availability (a subject you and I have discussed) being at ridiculous levels. This is why you need to look at vehicles that fall outside where dealers will be likely to lend on them. That is where the depreciation curve stops falling like a rock and levels out to the true value of the car.

I would go a step further and deal with a third party rather than a dealer.

I mean you have to really ask yourself what is going on with cars when you could have the entire engine and tranny rebuilt/replaced and the brakes done for like $2,000 but the value of the new car is $20,000+.

Edit:


Why are you getting rid of this car?

Nick

That description of the Camry I posted makes it sound like a nice car. Trust me, it's not.

Her problem with the Camry is that it has literally broken down on her and left her on the side of the road waiting for a tow truck 3 times in the last 2 years. Oil leaks, two different brake rebuilds, 1 full-on suspension failure, 1 exploding water pump, 2 replaced timing belts. And a busted stereo, but that's a car thief's fault.

Now, were this my car (which it is now, she's driving my SC-300) I wouldn't mind so much. Cars get older and need maintenance. But my darling wife hates cars with a passion and very much desires the security of a newer car with a nice comforting warranty. Did I mention that she hates cars? Because she does. She hates cars and she hates driving.

I'm happy driving the Camry and her with my beloved old SC-300, but she needs space to carry people around and she feels unsafe in the SC-300 (reduced visibility compared to the Camry) and it makes her nervous to drive it because the suspension is so much tighter than she wants.

She wants a safe, somewhat peppy, reliable and reasonably attractive sedan. Right now the Camry hits 0 of 5 of those and the SC-300 only fits 3 of the 5. I think the SC-300 is safe and I like coupes, so it's 5 for 5 for me.

So one of those is going to have to go, and it sure as hell isn't going to be my baby.

She's not keen on the idea of spending a big chunk of change to revamp the Camry, and I'm not too eager to argue the point since I've never really liked it.


The extra $18,000 is for the pretty exterior, a 36,000 mile warranty, a safe, quiet chassis, TV commercials I don't watch and car lots with asshole.

And, of course, you've got to factor in that beautiful, invisible hand that drives our economy. Cars cost what people will pay for them. And yes, the availability of credit. At this point, we have about $5500 liquid cash that can go to a car. Anything above that and we'll be getting a loan some way.

Like I said, we're not buying until early next year at the absolute soonest, so I'll be looking for a long long time.

Dude. . . your wife does some serious pants wearing. Don't get me wrong -- there are circumstances where there is absolutely no shame in the ceding the pants -- but I distinctly remember the thread you posted a while back that ended in you buying the old SC-300.

I went back to that thread just to see what you were talking about, and I missed the last comment that said the SC-300 was "basically a Camry".
As someone who drives a 1992 SC-300 and a 1993 Camry on a daily basis...

If we're going to talk about pants as if it is financial income. Let's just say the wife graduated from law school, moved to Houston and put on pants that were a little over 3x larger than mine.

Man, I have some ideas for getting my SC-300 pimped out inside once the wife and I get her car situation settled.

The Mustang is popular in its segment, but there are lots of people that wont go near a Ford dealership because of the past.

That sounds like more than enough work to me. It is fine to let dead dogs lie at times.

I can also understand the desire to have ultra-reliability as well. My wife feels very much the same way.


That really sounds like a lot of trouble for one car. I might look into finding a better mechanic as well for whatever you get next. I'm not fit to judge on the whole liking car thing because I won't even own a sedan.


I would still recommending getting something right at the curve of the depreciation, say four at most five years old. The car may have one third of its useful life used (say 50=75k miles on it) but has lost 2/3 of the value.


Have you done any research on your income/debt ratios? I know you have mentioned purchasing a house soon and people often make the mistake of buying the car and THEN the house. Do the reverse because after you get the house they could give a crap what the debt ratio happens to be. Before then though it might change your interest rate or affect how much you what loan amount you can qualify for. I should say scratch that because right now you have a pulse and fog a mirror which means they will find some way to finance you for a home. But as the rates rise, and people return to conventional financing, you'll want to qualify for the best fixed rate loan you can muster.


I'd bet you could find a 2001 Camry with fewer than 65k miles for $8500 in that amount of time with some careful negotiating and the benefit of time.

Nick

trumpt:


Oh yeah. We had a very exciting time in Austin taking refuge from Hurricane Rita going over our financial status very thoroughly.

The whole house idea is pretty much out for now. We aren't going there until we have kids, the housing market in Houston is just insane if you want to live reasonably close to work (and as I said, she hates driving).

It's all about the trade-offs, is retiring 2 years earlier worth 10 years of living in a place where you don't want to? We're both 24, so it's no time to panic yet. We're maxing out the 401k and recently started a Roth IRA until I get a 401k of my own (and sincerely hoping her place goes to the Roth 401k when that starts in January '06).


So we've got 65,000 miles for $8500.
In my little equation:
85,000 miles/$8500 = 10 miles/dollar

Trust me, if I go new I'm going to haggle the absolute crap out of whatever dealership is unlucky enough to talk to me.

That makes more sense. Consumer Guide is much more balanced in its reviews.