Does this sound like a good deal on a car loan??

[debden]

Hi,My nephew went to a dealer yesterday to look for a car.He found a 2003 Honda Civic EX with 55,000 miles.It was $14,000 (withOUT taxes/fees).
The dealer called him yesterday and said it would be $315 a month for 60 months.
Does that sound like a good deal to you?? It sound awfully high to me.He's got good credit and he's 22yrs old.
Any comments/opinions on this would be appreciated.
Thanks.
Debbie

 

[Mom21]

I believe that is about 12.5% interest. Doesn't sound good to me, but I haven't looked at car interest rates lately.

 

[debden]

I believe that is about 12.5% interest. Doesn't sound good to me, but I haven't looked at car interest rates lately.

Mmm,maybe it's because this is his first big purchase? He has credit cards but he has never purchased anything this expensive before.
I was going to tell him to tell the guy he's going to look around a little more and see if he can get a better deal....I think the dealer would come back with a better deal if my nephew did not take the first deal he gave him.
What do you think??
Debbie

 

[The Mystery Machine]

Considering you can buy a brand new car for 14,000 that does not sound good to me. 2003 & 55,000 miles?
I don't think so. Yea, I know it is the "dealer rate".

Private party sale you could get this for 10,000-12,000 more than likely.

He needs to seek out a credit union. 12.5 is way too high!
He could probably buy a more expensive BRAND NEW car, cheaper than this one.

Tell him to shop around and do the math.

 

[froglady]

Basically, this 3 year old car is going to cost him $19,000, so he'll be paying almost $1,000/year for financing. Doesn't sound like a bargain to me.

As someone else mentioned, he should go to a credit union and find out how much they will charge him to borrow $14,000. He should also go to Edmunds.com and find out what THEY think the car is worth. All consumer guides tell you that buying and financing a used car should be viewed as separate transactions, and you can almost always do better if you approach the sale with cash in hand.

I agree that $14,000 sounds a little high, but most dealers are taking advantage of high gasoline prices and charging more for fuel effecient cars. But I guess it's only price gouging when gas stations and oil companies respond to supply and demand.

 

[debden]

Thanks to everyone for your opinions and suggestions.This did not sound like a good deal to me at all.I'll try to talk him into looking elsewhere but he has his mind set on getting this car.He really likes it alot but Honda Civics are available all over the place in this area.I agree he needs to keep looking.
Debbie

 

[The Mystery Machine]

DH said end of years rates are going into effect!!!! You can do better. Credit Unions are running 7-8%.

New car loan average 6 1/2% with reg. banks.

If there is a 0.0 special on new cars, which will go into effect soon (end of the year sale), you can pay 330 a month for a 20,000 car.

In the Auto Trader, DH said the 14,000 is a competitive price for this car. However the 12.5 stinks.
You can buy a brand new 2006 Civic EX, for $19,810. He said near Buffalo NY, there are 33 brand new Honda Civics.

My dh is the master at loans and looking up all this stuff. One of his hobbies.

 

[my3kids]

Look at what used to be peoplefirst.com and is now Capital One auto finance. They send you a check which is preapproved for up to a certain amount then you write it at the dealership for the actual amount. There rates are much lower than banks or dealerships and if the dealer tries to beat the rate Capital one will send a new check guaranteeing a lower rate, or at least they used to do that. If you are a Costco member it is even less, so worth joining if for nothing else than buying the car.

 

[jackskellingtonsgirl]

We bought a brand new Honda Civic last year. It is financed at 3.9% for 5 years and our payments are $330. That was with no money down and still owing on the truck we traded, so I think he can do better! Good luck!

 

[my3kids]

I just looked at the Capital One pgm for Costco and the rate for a used car from a dealer is 6.74%.

 

[janette]

I never let the car dealer give me the price by a payment amount. Get the price of the car and do your own finance shopping. They are 2 different transactions and often when combined it is not in your best interest.

 

[miss missy]

Sounds horrible! My 11,800.00 was 48 month is 210.00/ mo. Dealers are sneaky please watch him close in a deal!

 

[RadioNate]

Terrible deal considering that a NEW Civic starts at $14,560. We pay less approx 325 a month on a new Accord that was financed through Honda Financial.

 

[HugsForEeyore]

I recently bought a 2004 Honda Civic LX with 30,000 miles, for less than what he would be paying for this 2003. I didn't finance as I had to pay in full, so can't help on that one. But it is a very fuel-efficient car, and reliable transportation, so I am very pleased with my Civic. Just took it to Florida for the 1st time, and it did great! (Now just have to get all those dead love bugs off of it!!)

I also thought about getting a new one, but after taxes and normal extras, it would have been far closer to 19,000, probably more. The cheapest base model is the DX and I didn't see any on dealer lots when I looked. Everything was the more expensive EX or LX models. For me, getting a used one made far more sense for me.

 

[Galahad]

We recently bought DS a brand new Civic LX with most "options" for 17K. Paid cash, but it seems like your deal isn't the best he can do.