I still can't really say that I've made a decision on a new car. I've got a few thoughts about it, but just haven't really finalized them into an actual answer.
I suppose this is a good thing. I mean, I'm not rushing into a 20-some thousand dollar purchase... which seems like a good idea to not do. The one real variable so far though, is my current car. What to get on trade?
I'm trying to return it to as much of a stock car as I can... and it should be decent when I do finally hand it over. But what can I really expect to get for it? Here's what some of the sites are telling me for trade in value:
- Edmunds TMV: $5410
- "average" condition - may be a bit conservative on this
- Kelley Blue Book: $6025
- "fair" condition - "good" condition is $7050
- NADA: $6325
So I don't know if the Edmunds price is just really conservative or the others are inflated. It's really hard to tell. I'd like to believe I'll get about $5000 for it. Anything less and I'd be a bit disappointed I think... anything more is just less I'll have to pay every month.
I'm also trying to get a bit of cash together to put down with it. Obviously buying anything like this, the more you can put down with it and in turn, the less you can finance, the better off you're going to be. You'll get not only a lower monthly payment, but you'll also end up paying a lot less in interest to the loan - no matter what your rate is.
That's another thing that's on the table at the moment. Financing. My credit is "ok" ... but it's far from great. I like to believe it's good enough to get a new car, but it's hard to tell what other banks are going to think. Though a word of advice (and again, stressing this), the more cash you can put down and NOT finance, the better the bank will look at it as well. If you're putting down 1/3 of the value in cash, that's less the bank has to cover and more equity that is instantly in the vehicle if it were ever to be repossessed. Meaning, if they ever had to take it away, they'd be more likely to get more of their money back from it.
Anyway... I decided to try to get preapproved through my bank (Corning Credit Union). The last time I asked them for money, I tried to get a personal loan to consolidate some credit cards - but I didn't have enough equity in anything really to get them to do it. Oh well... hoped this time would be different. I talked to one of their loan officers after filling out the application online. Apparently the underwriters questioned one of my closed accounts (the collections one). I informed him it was just a collections account that I had finally paid off. He recognized that I had been at a low point in 2006 and everything was going a lot better since then. I hoped that part helped.
When he finally called me back he had good news and sort of OK news. The sort of OK news was that I could get the money... but he didn't really seem to happy about it or sure of it. Like they were hesitant. I could have the money for 66 months at just over 8%. Frankly, for my credit score, I didn't think that was too bad... However... if I were to get a cosigner (and again, it sounded like they really wanted me to go this route) I could get it down around 3.5%. That's a HUGE savings. To put it in perspective, the difference on a $21k loan (plus tax, title, etc) at 60 months would be about $3000 in interest in almost $50 per month. Yikes!
Guess I need to look into that cosigner thing...
Though it is very likely that I'll still look at the dealer financing options too. Who knows... maybe I can get 5% or so through them and not have to bother with the cosign?
Oh, did I forget to mention that I also test drove a 2010 WRX the other day?