Purchasing Car Questions

[disneyfanatic60]

My son (will be 21 in Jan.) wants to purchase a car. Admittedly, neither my husband or I have a clue about cars. We dread doing this for ourselves.

He's looking at a Chevy Trailblazer (he wants a truck or SUV). I don't want him strapped to large car payments. He's already graduated from college and has a good job in his field. He's also working part time on evenings/weekends and his only bills are student loans which are very managable.

One--he can't decide between a new one or a used one. He would like a 2002 or newer. He's been looking into the GM Smart Buy. Has anyone had any experience with this program. I know there are mileage limitations but he'll be fine. He works just seconds from our home. They want $3000 down in cash/trade. Can you do less and still qualify (I know pymts. will be higher)? Can he qualify at such a young age? He's been working with the same employer (part-time for three years and full time since July after graduating last May.) He's also discussed leasing which I'm not keen with.

Can anyone offer any advise or thoughts? I'm trying to make sure he's steered in the right direction. Is there anything in particular he should be inquiring about or checking into? I'm worried if he goes in and they see a young guy, he's a sitting duck. I'm trying to make sure he is fully informed.

Thanks!

Michele

 

[Microcell]

If he does not have credit established they could do a really high interest rate. He may want to get financing through a bank ahead if they will do it. If you trust him, cosigning for him may get him the best interest rate. I am not a fan of american cars, so I would so some google searching on reliability ratings for that particular car. The only time I have purchased new was for a 10 year/100,000 mile warranty. In general new cars loose $3000.00 in value when you drive them off the lot. All cars do depreciate, though. I usually get Program cars, meaning they are one year old and have generally 25,000 to 35,000 miles on them as they were leased vehicles. They are sold at used car prices, but are pretty new and have relatively low miles. If he wants to be driving a new car every couple of years then leasing is good, but otherwise it is throwing money away. It is either way, but buying a new car with the intention of selling it for another new car in a couple of years is really wasting money! My SIL leased a car for five years when they decided tro buy the thing and in total it cost her $30,000 for a 14,000 car!

Oh oh oh!! Go to www.clarkhoward.com he has great advice on many financial issues.

 

[bsnyder]

I'd suggest he spend some time reading at www.edmunds.com

They have a wealth of information about purchasing a new or used car....what the costs should be, how leasing works, negotiating tips, etc.

 

[lilpritch04]

I bought my 2002 Grand Prix GT after graduating from college. They didn't have a problem with my work history since I had just gotten a f/t job about a month earlier. I had good credit and that was all they really cared about.
GMAC also has a $400 cash back for college grads that you can use up to 2(?) years after graduation. There are a lot of good deals on new cars right now (low APR and thousands cash back) but he will really need to do research on www.edmunds.com or www.kbb.com to see the value of vehicles.
Make sure he checks into his insurance rates as well. That can really help some people decide between buying a new or used car.
Good luck!

 

[sgtdisney]

Have him do some research on the SmartBuy. They tried to sell it to me once and it is truly nothing more than a lease. You have lower car payments like a lease and the option to return the car at the end of the term or pay a rather large balloon payment. When I figured it out a couple of years back we would have owed way to much after 4 years when the balloon was due and would have had to turn in the car. We ended up going with conventional financing.

Also keep in mind when you lease or do a smartbuy and plan on returning the car at the end that if you put a big downpayment on the car you will not get a dime of that back. Leases work good for some people, but I have never understood putting big down payments on a lease since you aren't buying the car. In essence doing that is like going into an appartment complex which charges 900.00 a month and saying, here take $3600.00 out of my pocket now and just change me 600.00 a month for the next 12 months. You're still paying, but more money is out of your pocket sooner that way. Good Luck.

 

[Dan Murphy]

Those auto websites, edmunds and kelly, are invaluable.

 

[gallaj0]

FYI, Trailblazers have some horrific records relating to the front end/drive train. My wife's has been in the shop for over a week now with over $2500 at 45,000 miles, only 3 years old, and warrentee just expired.

 

[Aimeedyan]

Those SmartBuys are just glorified leases, usually for people that want more car than they can afford. I would guess that a person working a good job could afford to just purchase a car. A lease or smartbuy is not a 'smart buy' for most people.

MOST car companies offer incentives and special finance rates for recent college grads. I have never known a college grad who was not able to get a great rate on a new car. My sister was looking for a new car in June, right after she graduated, and she went with a new car because she wasn't able to get the special financing rate and cash back on a used - so that might play a role in whether he gets new or used.

For her, we went ahead and got financing approved through USAA prior, because we NEVER talk monthly payments or finance rates when purchasing a car - but instead talk sticker price. Well, once we settled and signed on the purchase price, THEN they questioned what her interest rate was, and beat it. So they weren't able to use that to get more money from us. I recommend you check with your bank or credit union for pre-approval, so you don't have to worry about financing with teh car dealership - even if its just to tell them you dont need it so you can talk only purchase price. After settling on that, you can bring up if they can beat what you already got if you want.

All the websites will list current finance specials, graduate incentives, etc. so you have an idea of what companies offer them.

Get an idea for what the invoice price is (find those at kelly blue book, edmunds, etc) BUT remember that there is NO dealership that even pays that much - so don't let htem tell you otherwise. They purchase their vehicles in bulk from the plant, nad get a nice cut on things. they will never pay invoice, and they will always make $, but if you can get near the "invoice" price, you're probably getting a pretty good deal.

Good luck!