WWYD- Need new car due to accident.

[robinb]

I second the idea of getting an independent quote of how much the car will cost to fix.

But if they do that they are still stuck with nearly a year's worth of car payments on a reduced salary. This is actually an opportunity and not a liability.

 

[princessmom29]

This is bad advice. You got suckered. Never let them know you can afford $X payment. They will just start tweaking the terms and interest rate to fit that. You need to negotiate the price and make sure it is a good deal for the car you are buying. Then determine if the financing offered by the dealership is acceptable. You may be better off going thru your credit union or bank and getting a better rate.

Not always. Ther ARE people out there who will not swindle you, and if you do your homework, you can use the payment angle to force the price of a car down, which it sounds like the PP did. I have done it successfully as well. Payed $1500 below book for a used car with an excellent interest rate. It can be done. I knew going in what the car was worth and what rate the c.u. would give me. I used an online calculator to find out what the payments would be. I needed them to be lower. If he wanted to make the sale he had no choice but to lower the selling price to get the payment down to my "magic number."

 

[DCLbrideSept2009]

But if they do that they are still stuck with nearly a year's worth of car payments on a reduced salary. This is actually an opportunity and not a liability.

I agree. It's an opportunity to get out of the $200/month car payment.

 

[TammyAlphabet]

I would vote for #3.

 

[prncess674]

Not always. Ther ARE people out there who will not swindle you, and if you do your homework, you can use the payment angle to force the price of a car down, which it sounds like the PP did. I have done it successfully as well. Payed $1500 below book for a used car with an excellent interest rate. It can be done. I knew going in what the car was worth and what rate the c.u. would give me. I used an online calculator to find out what the payments would be. I needed them to be lower. If he wanted to make the sale he had no choice but to lower the selling price to get the payment down to my "magic number."

Yes, but MANY MANY car dealerships and salesman know the trick. You say "I can only pay X" so instead of lowering the price they can leave the interest rate the same but then they extend the terms from say 36 to 48 months. They didn't lower the selling price but you got your payment lowered. Really you just put more money in the salesman's pocket since they get a piece of the interest pie.

You need to leave X payment off the table and do your own homework about how much car you can afford over what period of time. Don't let them do the math for you. It is like a shell game. The best thing is to negotiate the price and then determine if the payment fits your budget. Sure they can lower your payment from $250 to $200 but you will be paying that $200 for 12 more months which did nothing to lower the cost of the car.

Questions I hate most from salesman:
- How much do you want your payment to be?
- How much do you have to spend?
- How much loan were you pre-approved for?

You have laid all your cards on the table you have no bargaining power, they will stick it to you. Do you research on the car. Know it's trade in, private sale and dealer retail for a used car. Getting $1500 off of dealer retail is still paying tip top price and the salesman still made a hefty commision considering they just paid trade in value for it.


My best trick for negotiating is to know what the car is worth and make a one time offer. I just bought a car this December. I knew what it was worth. It was a used car listed at $AA,000 and was Certified Pre Owned so it has significant warranty left. I called up the sales rep on Christmas Eve said I want that car for $AA minus 9K and I am not negotiating. You go do and talk to whoever and if you can meet my price then call me back, otherwise thanks for your time. It took several hours for him to call me back but it was end of the month and end of the year, this guy wanted to make his car quota. When I went to pick it up I said my CU is offering X% for Y years. They beat the percentage and left the other terms the same. I also got him to throw in new floor mats. Buying at the end of month also makes a salesman more eager to make quota.

The back and forth is what they hope for since many will end up feeling very vested in the process of negotiating and have a hard time walking out of that little room without closing the deal. Sure I was gambling that they may not accept my offer but it is a car and there are others.

 

[puffkin]

I appreciate all the advice. I am not sure what we are going to do yet. We still haven't heard from the insurance company.

I will have to ask around to see if there are any cheaper body shops that someone could recommend. I never thought about letting them total the car and then fixing it on our own if possible. We are NOT car people, so DH wouldn't be able to do the work himself, but maybe a friend of a friend type situation...we'll have to check that out.

We do definitely need two cars due to work. Also, DH used to have a long commute for work so I had to limit my job search to a small geographic area due to our DS and daycare considerations. Now that DH no longer has that commute, I can broaden my search significantly. I really think I will get something in my field within the next few months...I am working with two recruiters and have had several interviews since I expanded my search 6 weeks ago.

I really wish I had a crystal ball though, because if I do get a position I will most likely have a decent commute which means I would need a reliable car (and the Escape takes too much gas to consider as a "commute car"). I know buying a $4000 car and having no car payment makes the most financial sense, but the repair risks of that really scare me. Ugh...I just can't believe this is happening now....15 years and not a single accident for either of us and now it happens at the worst possible time

 

[deva]

This is bad advice. You got suckered. Never let them know you can afford $X payment. They will just start tweaking the terms and interest rate to fit that. You need to negotiate the price and make sure it is a good deal for the car you are buying. Then determine if the financing offered by the dealership is acceptable. You may be better off going thru your credit union or bank and getting a better rate.

Never, never, NEVER negotiate based on monthly payment. You'll end up paying sooooo much more than the car is worth. This is the way salesmen like to do it. You need to know the value of the car (a GREAT source is Edmunds.com), not the monthly payment you can afford.

In your case, I'd find a good used car priced 4K or lower and pay cash.

 

[SOnotLayuh]

5 years ago I paid $5500 cash for 1997 Honda Accord. Sure, in the past 5 years it has needed some work and right now it has 190,000 miles on it, but it is a fantastic little car and I love the fact that I do not have a car payment. It is allowing me to save up a down payment on a newer car for the next 1-2 years.

I say go with a used car. But just because it might be a $4k car doesn't mean it has to be a junker. Check out craigslist and see what is out there. Go for something like a Honda Civic or an older Toyota Corolla. You'll be surprised at what you can get.

My first car was an accord that was used... it was such an awesome car! I miss it! I had so many fewer problems than I've had with my Saturn (which was new).

 

[ReneeA]

With the economy in the shape it is, there are great used cars out there for under $5,000 with lots of life left in them. If we had to make the decision, I would definitely go with #3. Before agreeing to the purchase, I'd take it to a mechanic that I trusted and spend a hundred bucks to have them do a thorough inspection and ask them their opinion of the car. We've done that in the past, and it's always worked for us.

 

[MickMick]

I would pay cash for a car to get from point A to point b. There are loads of deals out there for cars.

Good luck!

 

[DISdreamin']

I never thought about letting them total the car and then fixing it on our own if possible. We are NOT car people, so DH wouldn't be able to do the work himself, but maybe a friend of a friend type situation...we'll have to check that out.

Just a word of warning about allowing the insurance company to total the car. If you want to get a title after that, look into the details of how to do so. Once it has been totaled, I think there is more to getting it back on the road than having repairs done - you may have to apply for a salvage title and go through an inspection (and I think you may have to pay for both of those services). You likely wouldn't be able to insure the car until this was accomplished, so if you're looking for a vehicle quickly this may not be a realistic option.

 

[DCLbrideSept2009]

I really think I will get something in my field within the next few months...I am working with two recruiters and have had several interviews since I expanded my search 6 weeks ago.

I really wish I had a crystal ball though, because if I do get a position I will most likely have a decent commute which means I would need a reliable car (and the Escape takes too much gas to consider as a "commute car"). I know buying a $4000 car and having no car payment makes the most financial sense, but the repair risks of that really scare me. Ugh...I just can't believe this is happening now....15 years and not a single accident for either of us and now it happens at the worst possible time

you need to make your decision based on your financial situation NOW, not what it may or may not be in the new few months. if you're that worried about the possibility of repair costs with a cheaper car, then go even cheaper with the car and put the rest in savings for possible repairs. Hopefully not jinxing myself, but I have had my 1999 Honda Accord for about 2 years now and since I bought it, I have put maybe $500 or so into it, the equivalent of maybe 3 months of $200/month car payments. MUCH cheaper!!

 

[princessmom29]

I appreciate all the advice. I am not sure what we are going to do yet. We still haven't heard from the insurance company.

I will have to ask around to see if there are any cheaper body shops that someone could recommend. I never thought about letting them total the car and then fixing it on our own if possible. We are NOT car people, so DH wouldn't be able to do the work himself, but maybe a friend of a friend type situation...we'll have to check that out.

We do definitely need two cars due to work. Also, DH used to have a long commute for work so I had to limit my job search to a small geographic area due to our DS and daycare considerations. Now that DH no longer has that commute, I can broaden my search significantly. I really think I will get something in my field within the next few months...I am working with two recruiters and have had several interviews since I expanded my search 6 weeks ago.

I really wish I had a crystal ball though, because if I do get a position I will most likely have a decent commute which means I would need a reliable car (and the Escape takes too much gas to consider as a "commute car"). I know buying a $4000 car and having no car payment makes the most financial sense, but the repair risks of that really scare me. Ugh...I just can't believe this is happening now....15 years and not a single accident for either of us and now it happens at the worst possible time

I know in Alabama if they total the car you CANNOT keep it and fix it. The title is marked scrap and the car must be sold for parts it can never be driven again. You might want to check into what the laws are inyour state before counting on fixing a totaled car.

 

[A Mickeyfan]

I would pray that they didn't total your car. My DD had an accident with her 2003 Corolla & the auto body shop where our insurance company had it towed to said that the insurance would more than likely total it. They didn't they fixed it but they also have upped our rates by $1000 every six months...

If I were you, I would go with option number 3. Don't put yourself in anymore debt than you need, not with the way our economy is... while you may not have the greatest jobs now, be thankful you still have one. It would be worse getting a new loan then loosing your job totally...

 

[TnTWalter]

i wuold pay off the note on the car and then get a used car with the reminder.

then use the $200 or so you would save (your current car payment) towards other bills, savings etc. just until you or DH gets a job.

Lara

save for a new car or if job situation gets worse, emergency.

Best of luck!

 

[PrincessSuzanne]

This is bad advice. You got suckered. Never let them know you can afford $X payment. They will just start tweaking the terms and interest rate to fit that. You need to negotiate the price and make sure it is a good deal for the car you are buying. Then determine if the financing offered by the dealership is acceptable. You may be better off going thru your credit union or bank and getting a better rate.

It may be bad advice for some, but it worked out well for me and I didn't get suckered. I am not a stupid woman and knew exactly what I was doing.

 

[prncess674]

It may be bad advice for some, but it worked out well for me and I didn't get suckered. I am not a stupid woman and knew exactly what I was doing.

Glad you didn't get suckered but the vast majority of people who focus on the payment verses the end price DO get suckered. Don't get your Mickey panties in a wad, nobody is calling you stupid. See the following story of an Edmunds employee who went undercover for months and documented the exact $X payment play that you described. The buyer walked out thinking they got a "good" deal but really the only one who ended up with a good deal was the car salesman and dealership. There is a huge psychology behind the $X payment play.

This story is lengthy, but totally worth the read.
http://www.edmunds.com/advice/buying/articles/42962/article.html

Sorry if the offends you, but advising others to go in and ask for $X payment is feeding lambs to the wolves. Focus on the total price+interest verses how much it costs you per month. If you are only concerned about cost per month then please call me and I will gladly finance your next loan at your monthly price for the next 50 years.

 

[oldbay]

We went thru a similar situation last fall, car accident and car ended up being totaled. I just wanted to point out you may be getting more money than you expect. The insurance company is supposed to give you the cost of car minus the deductible for the value of the car before it was totaled. In essence, the value of what it would cost you to purchase a similar car in your area in today's market. This was a lot more than the blue book value.

Also, if you let the repair place know you are interested in having the car repaired and hope it is not totaled then they may work harder to try to make a fix possible. We were not able to do this unfortunately. Also, there are specific rules for it being totaled, like the repairs have to be more the 80% of the cost of the car, for example. So, this should give you some idea of the value of the car based on the repair bill and whether it is totaled or not.

As for your specific problem, no idea - sorry I am not good with these dilemmas. Safety for me is a big concern so I would try to get the newest possible car you can comfortably afford, whatever that is for you. Good luck.

 

[Irin997]

Glad you didn't get suckered but the vast majority of people who focus on the payment verses the end price DO get suckered. Don't get your Mickey panties in a wad, nobody is calling you stupid. See the following story of an Edmunds employee who went undercover for months and documented the exact $X payment play that you described. The buyer walked out thinking they got a "good" deal but really the only one who ended up with a good deal was the car salesman and dealership. There is a huge psychology behind the $X payment play.

This story is lengthy, but totally worth the read.
http://www.edmunds.com/advice/buying/articles/42962/article.html

Sorry if the offends you, but advising others to go in and ask for $X payment is feeding lambs to the wolves. Focus on the total price+interest verses how much it costs you per month. If you are only concerned about cost per month then please call me and I will gladly finance your next loan at your monthly price for the next 50 years.

While I don't think it needed to be said this way, I do agree with you and here is my own personal experience with the $X payment plan.

I went into a local VW dealer just to take a look around and do a test drive or two on a Jetta. Talked to the salesman and I stupidly told them I was looking for a car and wanted to pay $X amount per month. I found a great Jetta, low miles, nice looking, had everything I wanted (not that I was even ready to buy the car at all). The manager came out and told me that in order to get the car down to $X payment, he would give me $3k for my car (my 97 Honda Accord) and would lower the price of the car to $22k.

I tell him, thanks, but there is no way I'm buying a car today (after tons and tons of pressure, telling me this deal expires today, etc). I go home and look up the exact same car on the internet and the internet price was $19k. So if I had signed off on that deal, I probably would have been hosed and kicking myself in the pants knowing I could have gotten a better deal.

Lesson learned and when the time comes that I will go car shopping, I know what to tell them and what to withhold.

 

[LisaInNc]

I was just in a similar situaton last September. I had a volvo convertible.

I decided to get a "junker" it's really not but it's an older well kept car with a lot of mileage on it. It's a lot smaller and it's a hybrid so save tons on gas.

My insurance went down a little too.

I can't tell you how much I love not having that car payment. I love that gas is so much cheaper and I don't mind that it's a much smaller car.

Once in a while I get a twinge when I see someone driving with their top down but truthfully it's not a big deal.

In your situaton I would do anything to reduce bills.

Good luck!

Lisa