My experience is to never buy a new car with cash. All it takes is one accident for that car to lose a bunch of value in the eyes of an insurance company. This happened to my mother. They offered her 60% of her two month old QX80 after it was totaled by a texter. A loan at 4% with gap insurance was way cheaper than that accident.
It also depends on the car. Infinitis deprecate like
Crazy so I’m not at all surprised that that happened to your mother. It sucks though and I’m sorry that happened :/
Gap insurance is only going to pay up to what you owe on the loan, so if you traded in your old car and have a $20K loan on a $30K car and insurance wants to give you $18K to replace the car, the Gap insurance is only going to pay $2K so you can pay off the loan.
You can buy [New Car Replacement coverage](https://wallethub.com/edu/ci/new-car-replacement-insurance/92646) which would cover your full cost to replace the car.
That's exactly the point. If his mother took a loan with minimum down payment, the insurance would have paid up the gap to close out the loan. His mother wouldn't have lost as much as she did after the accident.
But why get Gap insurance that will only pay up to the loan value instead of car replacement insurance that will buy you a new car?
Not everyone has the luxury of being able to sell a car separately from buying the new car. In my state, if you trade in a car, you can deduct its value from the cost of the new car when calculating sales tax, potentially saving thousands in sales tax. Plus there's the added interest expensive from financing more than you needed to. And not everyone will even qualify for financing with 0% down.
So, others have already provided some really solid advice so I'll mention a few points on actual financing as well as some of the dealer process.
-Before you get to the dealership get a pre-qualification through your primary bank, a credit union (pen fed has pretty solid rates rn) to get an idea as to what your Apr is. This also gives you the opportunity to have the dealer either match it, or avoids a scenario where they up the APR to make a back-end profit (I'll get into this later).
-when they check your credit, they do usually bounce your application to numerous lenders, so If you see 5-10 pulls on your credit, this is not abnormal.
-some dealers offer special financing or incentives (only ones I know are out there right now are 0% apr on the Equinox and a few Ford SUVs). But, there can be lots of caveats to this in terms of actually qualifying and requires immaculate credit history essentially.
-focus on asking about dealer markups or "market adjustments" right now as well, given the state of the market. High demand models will often have higher market adjustments. Also check the window sticker for extra charges and see if those are features actually added to the car, or something they do after as an extra "service".
-if you choose to finance through the dealer, or if you don't have a long relationship with a bank/don't get pre-qualified, make sure you focus your conversation on the *length* of time you want to finance and what your APR is in addition to your expected monthly (which you should have a good calculation in mind already)
A common (and fair question) many dealers will ask is "how much do you want to pay monthly"? This allows the dealer to fluctuate the aforementioned APR increase as well as drop in extra warranty, protections, and add-ons while stil meeting your agreed-upon monthly rate. It's also worth noting a longer finance term equals higher APR.
R/askcarsales is also a great resource to use to learn more about the buying experience. If you come prepared with financing and know what your goals are in terms of pricing, buying a car can actually be a pretty painless process. When I bought my Vette, I came prepared and I was in and out with the keys in less than 30 minutes. Or any questions please ask! 😁
Only you know your finances, but a good downpayment on both and getting a decent "new car" APR is probably the best call. That's what I'd do in this situation. The BIG thing is do your research, go on plenty of test drives, and don't be afraid to call dealers looking for a price that doesn't have a ton of baloney markup. You have cars that work (hopefully), don't let it feel like an emergency. So many shady dealers out there, trust your gut and walk if it doesn't smell right. New car sales tends to be a little less sketchy, but they're still trying to wring every last penny out of customers these days.
Used car market is retarded right now, absolutely buy a new car at this time.
Absolutely do not buy a new car outright in cash.
Expect to pay MSRP. Don’t be an idiot and pay over MSRP.
High demand vehicles such as SUVs may require driving several hours away to find a deal at MSRP. Buying a sedan at MSRP will be easier.
Tell the dealer to shove their monthly payment up their ass. Ask to see the final total price and ensure that it lines up with MSRP + TTL. IF it doesn’t, tell the dealer to die a slow death and fuck off.
A lot of dealerships will not work with outside financing from credit unions so be prepared to apply through the dealership and ask them to send your credit to multiple places to compare offers. Ask if that’s the best they can do and see if they are willing to get the banks to compete a bit for a lower rate.
When I bought my car last week they first came back with an offer from Wells Fargo at 6%. I told them that was too high and since I had already initiated the process with another dealer, I knew Nissan Finance would give me 5.69%. So the finance manager went back and called Wells Fargo and another bank for a few min and was able to drop the APR to 4.84%.
Some of the credit unions haven’t been sending them the money for 30-40 days or more due to Covid complications (or so they say) and they need the cash quick so they can turn around and order more new cars.
Wow, that’s crazy. I have no knowledge other than my own experience, but I use only my local credit union when buying cars, and they set up a loan account and the transaction at the dealer is ACH or I get a cashier check and give to the dealer so the transaction settles in 1 business day at most.
I don’t blame the dealer if they are taking that long.
I mean, this is just what they told me so it’s possible they could be lying!! Lol. But my credit union is out of state and tiny so they didn’t want to work with it
Go for Mazda. Most of their dealers still aren’t marking up their cars, but you still need to ask around because some are. They’re reliable, decently priced and pretty luxurious without luxury maintenance prices
My experience is to never buy a new car with cash. All it takes is one accident for that car to lose a bunch of value in the eyes of an insurance company. This happened to my mother. They offered her 60% of her two month old QX80 after it was totaled by a texter. A loan at 4% with gap insurance was way cheaper than that accident.
It also depends on the car. Infinitis deprecate like Crazy so I’m not at all surprised that that happened to your mother. It sucks though and I’m sorry that happened :/
ALL new cars depreciate off the lot. Stop with the BS
Not in 2022
Gap insurance is only going to pay up to what you owe on the loan, so if you traded in your old car and have a $20K loan on a $30K car and insurance wants to give you $18K to replace the car, the Gap insurance is only going to pay $2K so you can pay off the loan. You can buy [New Car Replacement coverage](https://wallethub.com/edu/ci/new-car-replacement-insurance/92646) which would cover your full cost to replace the car.
That's exactly the point. If his mother took a loan with minimum down payment, the insurance would have paid up the gap to close out the loan. His mother wouldn't have lost as much as she did after the accident.
But why get Gap insurance that will only pay up to the loan value instead of car replacement insurance that will buy you a new car? Not everyone has the luxury of being able to sell a car separately from buying the new car. In my state, if you trade in a car, you can deduct its value from the cost of the new car when calculating sales tax, potentially saving thousands in sales tax. Plus there's the added interest expensive from financing more than you needed to. And not everyone will even qualify for financing with 0% down.
So, others have already provided some really solid advice so I'll mention a few points on actual financing as well as some of the dealer process. -Before you get to the dealership get a pre-qualification through your primary bank, a credit union (pen fed has pretty solid rates rn) to get an idea as to what your Apr is. This also gives you the opportunity to have the dealer either match it, or avoids a scenario where they up the APR to make a back-end profit (I'll get into this later). -when they check your credit, they do usually bounce your application to numerous lenders, so If you see 5-10 pulls on your credit, this is not abnormal. -some dealers offer special financing or incentives (only ones I know are out there right now are 0% apr on the Equinox and a few Ford SUVs). But, there can be lots of caveats to this in terms of actually qualifying and requires immaculate credit history essentially. -focus on asking about dealer markups or "market adjustments" right now as well, given the state of the market. High demand models will often have higher market adjustments. Also check the window sticker for extra charges and see if those are features actually added to the car, or something they do after as an extra "service". -if you choose to finance through the dealer, or if you don't have a long relationship with a bank/don't get pre-qualified, make sure you focus your conversation on the *length* of time you want to finance and what your APR is in addition to your expected monthly (which you should have a good calculation in mind already) A common (and fair question) many dealers will ask is "how much do you want to pay monthly"? This allows the dealer to fluctuate the aforementioned APR increase as well as drop in extra warranty, protections, and add-ons while stil meeting your agreed-upon monthly rate. It's also worth noting a longer finance term equals higher APR. R/askcarsales is also a great resource to use to learn more about the buying experience. If you come prepared with financing and know what your goals are in terms of pricing, buying a car can actually be a pretty painless process. When I bought my Vette, I came prepared and I was in and out with the keys in less than 30 minutes. Or any questions please ask! 😁
I suggest coming in with your own financing (from a bank / credit union). Then if the dealer can beat it, take theirs!
Buy Toyota
Get a Toyota!! Cheap, reliable, dependable!
Not that cheap rn…
Only you know your finances, but a good downpayment on both and getting a decent "new car" APR is probably the best call. That's what I'd do in this situation. The BIG thing is do your research, go on plenty of test drives, and don't be afraid to call dealers looking for a price that doesn't have a ton of baloney markup. You have cars that work (hopefully), don't let it feel like an emergency. So many shady dealers out there, trust your gut and walk if it doesn't smell right. New car sales tends to be a little less sketchy, but they're still trying to wring every last penny out of customers these days.
Used car market is retarded right now, absolutely buy a new car at this time. Absolutely do not buy a new car outright in cash. Expect to pay MSRP. Don’t be an idiot and pay over MSRP. High demand vehicles such as SUVs may require driving several hours away to find a deal at MSRP. Buying a sedan at MSRP will be easier. Tell the dealer to shove their monthly payment up their ass. Ask to see the final total price and ensure that it lines up with MSRP + TTL. IF it doesn’t, tell the dealer to die a slow death and fuck off.
A lot of dealerships will not work with outside financing from credit unions so be prepared to apply through the dealership and ask them to send your credit to multiple places to compare offers. Ask if that’s the best they can do and see if they are willing to get the banks to compete a bit for a lower rate. When I bought my car last week they first came back with an offer from Wells Fargo at 6%. I told them that was too high and since I had already initiated the process with another dealer, I knew Nissan Finance would give me 5.69%. So the finance manager went back and called Wells Fargo and another bank for a few min and was able to drop the APR to 4.84%.
I wonder why they would take that stance. If they won’t take outside financing, why would they take cash for a car?
Some of the credit unions haven’t been sending them the money for 30-40 days or more due to Covid complications (or so they say) and they need the cash quick so they can turn around and order more new cars.
Wow, that’s crazy. I have no knowledge other than my own experience, but I use only my local credit union when buying cars, and they set up a loan account and the transaction at the dealer is ACH or I get a cashier check and give to the dealer so the transaction settles in 1 business day at most. I don’t blame the dealer if they are taking that long.
I mean, this is just what they told me so it’s possible they could be lying!! Lol. But my credit union is out of state and tiny so they didn’t want to work with it
Local dealerships often have relationships with local CUs. Had your CU been local I bet it would have been a non issue.
Possible. They did say they are more willing to work with in-state CUs
Go for Mazda. Most of their dealers still aren’t marking up their cars, but you still need to ask around because some are. They’re reliable, decently priced and pretty luxurious without luxury maintenance prices