Quote:
Originally Posted by Carsten
Well actually yesterday, anyway I went into Dch of scion in Oxnard California. I went in to buy an frs 10 series but I'm 19 years old and haven't yet established any credit
|
Even in California you should be able to find a 2013 Scion FR-S at a price below MSRP. Discounts will vary by dealer; your job is to find the best overall deal. You may need to drive elsewhere, possibly even to Colorado where Clint appears ready to sell you a 2014 at a substantial discount.
You are clearly confused. You say you use a Scion payment calculator, but the numbers come out wrong. Find a different calculator, then. Some online calculators ARE wrong; I've found them. I use my own personal calculator, one that I recommend to you all: Texas Instruments BA II Plus Professional.
The information you provided to us is insufficient. You do not show the cost of the vehicle and add-ons.
Let's start at the beginning.
You are purchasing TWO things here:
1) A new automobile
2) Money to buy that automobile
Determine the cost to you for the automobile. Get a written, line by line, itemized account of the car purchase. Start with the price of the car. Add accessories. Add extended warranties, etc. Add dealer "processing fees." Note the TOTAL price of the car.
Now add title, and license fees.
Subtract the value of the trade-in car if applicable. (in most states)
Compute the correct sales tax (could be as much as 10% in some counties in California, I understand).
TOTAL for all of above.
Make certain that you understand and accept each of the items added above. Most are negotiable, save for tax, title, and license fees.
That should be the cost of the car. Your research will confirm whether it is a fair price in your area.
Me, for instance? It was easy. MSRP in early 2012, and happy to find a dealer who did not add Additional Dealer Markup. Then a BS paperwork fee of $139, and TTL. Done. Easy.
Now, the money purchase.
Subtract any down payment from the TOTAL above.
The remainder is your loan amount.
The interest rate is negotiable. It should be less, for instance, if you agree to pay off the loan in a shorter time period. Go online, and make phone calls to lending institutions to learn what interest rates you can get.
Your current situation in life may mean that no one will give you a rate lower than, for example, 14.99%. We'll just use that as an example. You can beat that.
The cost for #2, the money, depends on the APR, the interest rate, and the term, the time in months to repay the loan.
Let us say that you borrow $20,000. Now study the figures below:
$20,000 for 60 months @ 14.99% = $475.69/mo. x 60 mo. = $28,541.40
So, the cost to borrow this money on these terms = $8541.40
They gave you $20,000. You gave them back their $20k plus $8541.40. Clear?
The same loan but @ 4% = $368.33/mo. x 60 mo. = $22,099.80
So, the cost to borrow this money on these terms = $2099.80
Therefore, getting a 4% APR vs. 14.99% will save you, in this case, $6441.60.
Lesson?
Shop for your money as carefully as you shop for your car or house, or whatever.
I think that any car loan carried longer than 60 months is foolish. Don't do it. If you need that long, then you're buying something too expensive for you. Even better, would be a 48 month loan.
One of the problems for long-term loans, anything longer than 48 months, is that the owner is often upside down in his loan, and remains that way for a long time. That's financially dangerous. Dealers actually encourage buyers to do this.
The bigger your down payment, the less you borrow, the lower your loan costs. And if you have more invested, the lender might give you better terms. If you default, the lender will repossess your car, and keep your down payment.
Do your homework before approaching the car dealer. Know what the car should sell for in today's market, and know what your best loan interest rate is from independent sources. As a rule, car dealers will beat your best interest rate found elsewhere. Make certain there is no pre-payment penalty on any loan you ever take out for the rest of your life.
Finally, exercise your option to re-finance at better terms when you can. Do the math, though, and confirm that the new deal is really better. Consider shortening the term, too.
Any questions?
If not, then say "Thank you, Porsche."
