Prius purchasing questions

well, we got ours last march for msrp (24500 plus tax and title, 26100 all together). financed for 6 years at 8.something percent. yes, i know we got screwed. payment: 480 a month.

refinanced for 5.5 years at 3.24 percent. new monthly payment: 469 a month. we pay 500 and a couple hundred more when possible, say on a 5-paycheck month.

insurance with good record: 450/6mo for the prius only, but that's including a multi car discount for his car.

our total yearly income is under 50k at this time. rent here is 700 a month. we are doing fine with a VERY strict budget, and even paying a large chunk a month toward his tools and/or credit card debt from the summertime on a good month. we do go out to eat once a week or so and enjoy nice things in moderation.

i would NOT recommend financing more than 6 years. if possible don't finance more than 5 years. the interest hit you take is amazing and will make your head spin.

used toyotas are like any other car... it depends on the previous owners and how well they took care of the car. typically they're okay. my husband bought an 87 camry last spring, shortly before we brought the prius home and hasn't had much trouble. he had to replace a few things but the cost of parts and the purchase price combined was about up to the blue book value of the car.

anyway, now you know enough about my finances but i hope that helps. i say if you don't feel confident, it may be best to look VERY carefully before you leap.

 

I don't think you can find a car loan with a term of over six years. Figure you'll pay about 7% interest (depends on your credit, of course, and a credit union rate is usually a little lower).

(Cripes, I'm moving to Iowa! Average rent here is $1200/mo.)

Your Sable is almost worthless as a trade-in unless completely fixed. You can look up its value for sale to a private party at kbb.com (Kelley Blue Book).

From the info you've given, and the fact you may be leaving low-cost Iowa to take a job in your field before a 5-year loan term is up, it could be a leap. DOABLE on $30K with low overhead (you didn't say that...! :huh: ), but a leap when looking into the crystal ball.

If you really like the Prius, I'd shop (at an online place like Autotrader.com, for starters) for an '04 with the lowest mileage you can find. It'll cost you around $19-21K (maybe less in the Midwest, where Priuses aren't as hot). But it's got most of what an '06 has and gets the same MPG. That's saving you about $8K to start.

 

Fortunately I had been saving for a new car since 1990 so I was able to pay cash (check actually) for the whole enchilada. It was quite a thrill to do that.

There are people younger than you with a Prius, but some have had help from their parents (loan, gift). I agree with Jack 06's suggestion, it's a good way to start.

 

Really? I have gobs of newfound respect for you! B)

 

As a recent college graduate, you may qualify for Toyota's College Graduate Finance Program. I don't know if the Prius is eligible under the program, nor do I know what the interest rates are.

I can get a loan at around 4.5% through my credit union, for up to 84 months. This includes discounts for things like buying through them (I bought my last car through them and I got a great price and it was hassle-free), using automatic withdrawls for my payments, and even for buying a "green car". Interest rates are inching up. If I could have gotten an '06 in September, my loan would have been 4% (the loan on our other car is an amazing 3.45%!).

I tend to like having longer termed loans because of the flexibility, but I'm very disciplined and always pay my loans off early. It's nice at times like Christmas to be able to just pay the payment.

There are a lot of bank and financial web sites that have monthly payment calculators that will help you figure out what you can afford each month.

I think Toyota cars are excellent in terms of reliability and resale value, so you might find something that's used to be more affordable.

 

I doubt there is a sweet spot. Toyota practices continuous improvement. Probably the longer you wait the better the quality. Except for my Tercel, most people I have know have gotten more than 200,000 miles unless they have had an accident.

First pay off all of your debt.

Try joining a credit union through you school or work. They pay higher interest and they charge lower rates when you decide to buy. My credit union also has a 10.5% visa card. My credit union will let you go for up to 84 months, but I wouldn't recommend it. The longer you finance the higher the rate, when I financed it was 2.4% more per year. Get your financing approved in advance.

Check for your insurance rates too. Mine was $915/year for the Tercel and went to $2104/year for the Prius. It was $400 more than promised but 5$ cheaper than the next lowest quote. Check out all of the discounts you may be eligible for as well.

My out the door price was about $25000 and I paid 50% down. I got a 4.55% rate from my credit union. I pay $285/month for 48 months for the prius and $210/ month for insurance which is more than I expecited to pay.

The prius is cool but you may be better off driving your current car or a used car until you get you new job and it might make more sense to save for a down payment on a house and buy your car later. If you wait you could get more bang for you buck and have even more choices.

Good luck.

 

Please don't put yourself in debt for a car. If you are asking about something more than a 6 year loan, you probably shouldn't purchase a car at that price. Also, you state you don't have children, wife, and other things - but guess what?...you could before you know it! Life changes fast!

If you can put up with a pre-owned - look at a Corolla = killer mpgs and reliability.

If it just has to be new - either a Scion XB (highly recommended) or a Corolla. Around here, we can get a decent new Corolla for anywhere from $12,999 to $16,999.

Like everyone said, financing is what will eat you.

Start small. But with that said, please get that Merc off the road

 

Before you try to figure out if you can afford a Prius, first figure out what monthly payments you can easily afford every month. Keep in mind, if you were to lose your job, you'd still need to continue making payments!

Once you figure out your maximum comfortable payment, then determine if the Prius falls into this category. While the Prius is a great car, you may be better of getting a used Corolla or used Civic. Both get good mileage, even in their gas only versions. They should also both be quite reliable and you should be able to get either for under $15k.

If you can find one of these in decent condition that could keep you to just 2-3 years on a loan, then you can get yourself in a good position to get a Prius for your next car.

 

I would agree with other posters. Find an inexpensive reliable used car, but under the "maximum" you feel can pay out on a monthly basis. Where I'd add my .02 cents: Save that difference. You have time on your side for savings, start accumulating!

(For the Prius we put half down and took out a three year loan - we hate paying for interest. And I'm still saving as I'd like to be able to pay all cash someday.)

 

Check for tax incentives in your state in WV they give $1000 dollars off your tax bill each year over a 3-year period. Federal will give $3150 off for one year. You just have to make sure you pay that much in taxes. My wife and I are buying our second Prius in January. The car it is replaceing is a 1993 mercury sable. I wish you good luck on any car you purchase if you find you can aford the hybrid great.

 

Lots of good advice here. Life can change on a dime - health, job, relationships - you just never know. So don't strap yourself with a car loan unless you're sure you can afford it.

Are you putting away $500 into savings each month and not thinking twice about it? Then maybe a smaller loan amount would be manageable, but I think you'd come out ahead if you got an economical used car now and saved for the new car down the line.

I've been out of school for many years, and used to think that having a car note was a way of life. Fortunately I've learned, and I try to borrow as little as I can and pay it off as fast as I can. To be honest, it probably took being laid off to make me realize how easy it is to be in debt. I was lucky - out of work just two weeks - but it only took one day of being unemployed to get me to come to my senses about debt.

So sock your money away, and then next year, when you're on PC reading about the '07 model, you may be able to walk in and put down a very healthy down payment!

 

I'd check into the loans first. Don't go for a longer loan, you'll just pay way too much in interest. Look for something around four years or less. I've got a four year loan. Look for a really low interest rate. If Toyota's college loan program is the lowest, go for that. If you're a member of a credit union, try there. I got very close to 4.5% over four years. I also bought a package 1 which is just fine. I paid around $21,000 and I put 2,000 down. My car payments are around $465.00 a month.

I'm about where you're looking at. If you can afford $465.00 a month in car payments, they you can consider a new Prius. If not, look for another car.....maybe even a used Prius if you can find one.

One thing you need to consider is that the car costs less to operate. You only change the oil every 5,000 miles. You'll gas up less. And the car will last at least 10 years.

If you take delivery in Jan. 06 you'll also get a tax credit on your income taxes, which I assume you have as you probably work.

I drove my parents used car in college and for two years after. I saved $4,000 and then bought a new car. A ford pinto. (This was after they fixed the gas tank thing but still couldn't sell them,) I drove that car for ten years before I replaced it. It hurts to have to wait, but look at your situation. Are you working? Do you have a steady job with good pay and not likely to lose the job? Are you in good health? Does your job offer health care? Some jobs offer an opportunity to buy insurance where if you are unable to work due to a health crisis you still continue to get your full paycheck. It doesn't cost that much.

You've got a lot of things to look into and consider.

It's possible your insurance company will total your car if the body work costs more than the car is worth, which is quite likely. But I have to ask....if the car is that old, why are you paying for that? Why not only pay what is required? You've probaly paid more in premiums than the $2,000 you might hope to get back if they total the car.

 

A couple of helpful urls for you:

This one urges you not to spend more than 8% of your income on car payments
http://money.cnn.com/2003/10/21/pf/autos/q_spendtoomuch/

This one shows the "true cost" to own a car. (I used the '05 Prius to check it out}
http://www.edmunds.com/apps/cto/CTOintroController

 

If your insurance company totals your car they will offer you about 70% of what it is worth. They hope you will just take what they offer because that's what most people do. But it is negotiable, arm your self with some facts such as advertisments for cars similar to yours and anything else you can find to indicate it's value. Check Kelly Blue Book and Edmonds, both available on line, I think 1994 models will be listed.

Also if they total your car, and you want to keep it, a lot of times they will sell it back to you for very little. You might be able to get the money for the car from the insurance company, buy it back from them, get it fixed well enough to keep driving it for a while, and come out money ahead. Especially if you can do some of your own work.

Do not buy a new car. Do join a credit union if you don't already belong to one.

Don't buy an expensive car new or used until you can afford to make a good down payment, then do not finance it for more than 3 years. It's really a lot better to just save your money and pay cash for one if at all possible.

 

I Don't think they will dial down... but my question is the balance between more and more prius's getting built with cheaper battery prices which you think would lower prices...
verses...
Better technology and more expensive technology with more batteries to increase the distances of running on the battery thus increasing gas mileage... esp in city?.... as things get more plentiful, they will also get better... so I'm not sure how the price will tally?

What makes me nervous Is I see the Honda civic that starts at a comprable price and many people are interested and I personally don't consider it as well built a car as the prius? It has to rev to 6000 rpm to have the same power as the prius at 5000rpm? The honda is lacking many options also....
If the honda is popular it will raise the price of the prius, but there is also a chance it will flop since they are not making it too affordable compared to what they give, when there is this awesome prius out here to choose from.
They do have a powerful marketing program that colours it as better than the prius... but its mostly smoke.
Then you have the Honda Hybrid accord that starts at over 30K before options!.... more power with worse gas mileage.... more to compete with the camry hybrid or vice versa.... how ever you look at it.

Its going to be what the market will demand!....

But I doubt seriously that the prices will fall.... that just seems to "never" happen.... especially when factoring in inflation.

Sometimes the sweet spot is to just jump in and if it gets sweeter and you want to upgrade go for it... so far the resale has been tremendous and you should get your money back.... the only way that would backfire is if there was no more waiting list.

 

i am a college grad as of may 04... took advantage of that program. they'll give you the deal, but they'll require you to finance through the dealership and they WILL use it as a weapon. they have nasty interest rates, no matter how high your credit score is.

this is why we refinanced right away, because i was not happy paying nearly $200 in interest alone every month.

the program is: new car purchase gets you a $400 rebate, no down payment, 6 month payment deferment. for us, the $400 covered the doc fee, which we didn't know was negotiable. i guess anything helps anyway. the 6 month deferment was nice, got us on our feet after having to buy a car 3 months earlier than we had planned for. but deferring at that outrageous interest rate cost us a ton of money in the long haul.

they will require that your payment is 1/3 of your income or less, also, just to give you a heads up. i don't know if that's a general financing thing or part of that program, but they didn't give me the car loan on my income alone.

good luck making your decision!

 

Car makers can definitely "dial up" or "dial down" the quality control. But if you look at Toyota's history and Consumer Reports, Toyota appears never to "dial down" quality. And with the trend towards putting HSD in more and more models, they still have a strong incentive to keep the quality high, on top of their general marketing philosophy to capture market share by building the highest-quality cars on the market. So, I don't think there's a "sweet spot."

Regarding financing and insurance costs: they are going to be different for different people in different locations. Shop around for financing. Ask your insurance agent what your insurance would be.

Charles Dickens has one of his characters say that the recipe for happiness is to spend one pound less than your income, and the recipe for misery is to spend one pound more than your income. As wonderful as the Prius is, I do not advise going into debt to buy it or anything else. My sister is a compulsive shopper and always ran her credit cards up to the max and lived in a constant state of nervous breakdown. I never borrowed money. Ever. She had lots more stuff than I, but I was much happier with my lot in life.

My advice: don't buy what you cannot afford.