How much down on new? Should I get used?
 

Hey fellas, I have been lurking on the site for a couple of months finally registered.

I am looking for input/advice. I am interested in a BRZ, black, limited, automatic(wife will drive as well) below 10k miles if used.

I currently have $20k cash, but I can only find FR-S's that are around 18-22k, it almost seems as if with the BRZ you might as well purchase new because of the pricing out there.

I will not be modding anything, I am going to keep it stock and drive to work and back basically.

Any advice on purchasing options?

I would check out your local dealer and see what financing rate you can get on a new BRZ. Subaru has been pushing rates below 3% if you use their financing department.

I would generally agree that buying a BRZ new, gets you a better deal than an used one. There aren't many used BRZs for sale and I don't think most subaru dealerships are very good at selling the new ones.

I would also send Clint a message.

edit: I put 10% on my new BRZ

If you've got $20k to put down, I think buying new would be a pretty safe idea. You wouldn't really be saving all that much when buying used, and you wouldn't run the risk of inheriting someone else's problems.

And like @calidus mentioned, Subaru's got some very good financing deals - I thought that USAA was giving me a fantastic rate, but the dealership easily beat that for me.

FWIW, I put about 15% down on mine.

You'll have to do the math, but generally APR on a used vehicle loan is more than on a new one. So in the end, you *might* end up paying almost as much on a used one than new. If you pay cash, you avoid the higher apr on used...

Subaru was offering 0.9% on new BRZ's up here in new england, for example, but that offer expires today (3/31).

at that price, buy a new one for 0% (2013) - 0.9% (2014) financing, no down payment, and sock the money away.

Send a message to Clint @HeubergerMotors. As others have said about buying a BRZ, it's probably best to be buying new for them, in addition to Subaru's spring sales. You could very well get a really good interest rate through Subaru finance and make this worth financing, especially if your downpayment is $20k in cash (like have this paid off in a year with a low interest rate). Clint's dealership has been one of the better places to buy Subarus for a while, especially for those living in high-sales-tax states. Talk to him and see if they're able to offer you something you're willing to pay for. :)

Thanks bud

Every time I've asked USAA about an auto loan, Subaru finance was always able to beat it.

IIRC, Subaru (at least here in Phoenix) uses JP Morgan Chase as their bank for auto loans.

This was my first time looking to finance a new car so I can't speak for past experience, but I was pleasantly surprised that Subaru came through cheaper. USAA has given me awesome rates for mortgage, insurance, and credit cards.

And FWIW, my loan ended up being handled by PNC Bank. So far, so good - but haven't made my first payment yet ;)

Yeah, I think Subaru Finance sends out loan offers to different banks, and they offer at an APR based on your credit history that they think they can get, and they go with whoever gives the best rate. Or at least that's what I understand it from what the finance manager from my local dealership told me, but that Subaru Finance does have one main bank they mainly use, even though they can get the loan through other banks. Or something like that.

I'm not really good at applying my math skills and whatnot to business stuff like this. So, it's a little fuzzy to me.

And yeah, USAA is usually #1 in hooking me up on everything else. But I'm starting to think that part of how such a small company such as Subaru is so spectacularly successful among the big car manufacturers is partly due to this. Maybe just part of what they need to do to stay competitive?

In regards to payment, I use what's called "smart pay". It's a separate company that makes automatic payments for me once every two weeks. They pay half the monthly payment every 2 weeks. Since that's actually MORE than twice a month, but close to it, it ends up costing monthly about the same amount, but actually pays more. Anything extra over the monthly goes directly to paying off the principle loan amount (what you actually owe). It ends up paying off the loan 6-7 months early for 5-8 year loans, which results in you overall paying the bank less than if you just faithfully paid the monthly once a month. And it being automatic means you won't be missing a payment due to "oops I just forgot" (which is common for me). So it helps you to keep building a positive credit history too. It's part of what's made owning a financed vehicle fairly easy, as it just makes the car payments just part of the normal monthly expenses that is simply automatically taken care of, just like my rent and utilities.

I just went through this last week :)
 

Used.

How so... Well my 2-cents

Up here in NorCal... a used 2013 (Spring) BRZ is around $23k for the limited. The dealers want $26.5k for new. For $3500 more, what are you getting? About 5k-8k miles.

I personally only drive less than 10 miles a day to work, so miles didn't bother me. But also, note, the break in is 1000 miles. For me that's like 4 months of not driving the car to it's potential.

Warranty - it's bumper to bumper, transferrable. Used, that's still 2 solid years plus the whole drivetrain warranty.

Interest rate - 0% is tempting right? But each 1% is only about $15/month in payments. Subaru financing gave us 2.49% with a credit score in the 800s. So a used car WILL cost you $38/month in interest BUT... a car that is 3500 more a month will cost you $70/month in payments (roughly $20 for every $1000).

One side note, IF you have to buy new... get the Limited. The dealers are all overstocked in those cars and want to unload them. A thorough check of all the NorCal dealer stock showed roughly a 4 to 1 ratio of Limited to Premium cars. So they may want to deal so clean inventory for the 2014 cars coming for early summer deliveries.

With $20k in hand earmarked to spend on a car, I'd buy the best and cry once. Meaning, get a loaded model by putting the $20k down and financing $7-8k for the shortest term you are comfortable with. I'd go 36mos so you aren't making a payment after the warranty period.

I know a lot of folks who have a lot of money and they are some of the most unhappy people I know. They fret over ever dime they spend. I'm not advocating being frivolous with your money, but if you've saved up $20k for a car, then you obviously know how to save and plan for major purchases. Reward yourself and buy what you want. Too many times in life I've settled for what was practical and in the long run it's cost me more than I've saved. I ended up trading a perfectly good car for a loss because I ended up not liking it.

This next time around. I'm getting what I want.

The less you can put down, the better, assuming a sub-2% interest rate. Cash is king, and you can invest that money elsewhere to actually get returns

Actually, the less you have to finance, the better. Let's say the OP puts down $20k in cash and finances the rest, but decides to pay like he only put $2k down. It'll get his loan paid off much more quickly, as all the extra after covering interest goes directly against the principle. The longer you finance, the more the bank gets in pure interest, ie, the more you spend just paying the bank, not paying off what they loaned you. So, the faster you pay it off, the less money you spend overall.

$20k cash down is $20k you didn't have to ask the bank for and then pay more $$ in interest while paying off the loan. That is, you save even more.

The closer you can get to, in the end, paying what the car cost (with fees like TT&L and any service agreements you want as well), the better. The way to do that is pay it off as quickly as you can. A lower APR will help with that, as more of your extra payments will be towards principle.

Though let's talk about investing that $20k. Okay, good idea. Perhaps $15k down, and drop the remainder into an appreciating account with someone like Edward Jones. With the right financial manager, that $5k will grow pretty steadily with dividends being reinvested, and thus any capital gains taxes deferred until actual stock is sold, so investments remain untaxed until they're cashed in upon, and the investment just keeps growing on itself in a compound manner. And all you did was pay $5k less on a downpayment for a depreciating asset (car). After the loan is paid off quickly, I'll bet that investment account is close to being worth what you put as the downpayment.

A good investment will grow quickly with just a small boost, provided you have a smart guy wisely investing your money. Concentrate more on keeping the auto finance principle low.