HELP... FINANCING!!!

<div class='quotetop'>QUOTE(manda1983 @ Aug 18 2007, 12:14 PM) [snapback]498392[/snapback]</div>

It sounds like by buying the Prius, you'll be going into more debt. While I'm obviously a big fan of the Prius, taking on more debt while in school probably isn't the best idea. If your car is worth $10k, it probably runs just fine. Why not keep it and use the money you would have used for a car payment to pay down your credit card debt? You'll have plenty of time to enjoy a Prius (or whatever comes around later) in the future.

Sorry, I know this isn't the answer you were looking for.

 

we got a baaad deal financing through toyota. at the time i had a credit score in the low "excellent" range and still got 8.24% on my loan. they gave us 400 off and a 6-mo deferment through the college grad program, but we ended up paying $1000 in interest over those 6 months, so we lost a lot there.

i would skip the toyota finance altogether if you can, or really bargain them down. if i had to do it all again, that's what i'd do.

 

<div class='quotetop'>QUOTE(manda1983 @ Aug 18 2007, 01:46 PM) [snapback]498416[/snapback]</div>

I wouldn't accept the offer. If someone is claiming that fees on a car loan are equal to 10% of the principal then I don't believe they are being truthful. I would also use the money you would've made on a car payment and throw it into a higher yielding money market account to save for a new prius. Consumer debt on a car is a rip off. If you can avoid it, you'll be thankful you did later.

 

Never finance a depreciating asset. Basic principle of economics. That being said though, most of us do, and I certainly do. So why would you want to put so much down on the vehicle? The Prius will not depreciate as quickly as most other cars, so if you have to trade in 3-4 years you won't be in as bad a position, and may not even be inside out on the loan.

I'd make the minimum down payment, try to get the best interest rate, and make sure its a payment you can afford, and don't forget to think about the insurance in you payment. You may even consider a used Prius. Up to you. There are a lot of financing deals out there, and a lot of options.

Choose wisely grasshopper!!

 

<div class='quotetop'>QUOTE(tballx @ Aug 18 2007, 04:00 PM) [snapback]498421[/snapback]</div>

Agreed, don't accept the offer. They're just trying to scam you! And keep your car, put off buying a new car until you have an established career and can afford to pay your car off in two or three years.

 

I agree, stay firm at your $10k. Tell the girl if she can't come up with $500 in fees then she should buy a cheaper car. Thats not your problem.

As for the financing. TFS (Toyota Financial Services) generally doesn't have very good rates unless they are running some sort of promotion. What is your credit score? Even with excellent credit its going to be 8% probably. The benefit of going with them is they will approve pretty much anyone, so if you are having trouble getting a loan due to poor credit, lack of a downpayment (you can drive off without spending $1 with a TFS finance), or difficulty documenting your income they're your best bet (this is true of ALL manufacturer's captive finance arms).

If none of these things are an issue for you, you'll almost certainly get a much better rate by contacting a direct bank or credit union.

I wouldn't put the money down personally, unless you're apt to squander it. Pay off your credit cards (and CUT THEM UP!) and then put the rest in a nice safe CD or something.

 

<div class='quotetop'>QUOTE(manda1983 @ Aug 18 2007, 03:14 PM) [snapback]498392[/snapback]</div>

All you are doing is swapping credit card debt for car debt. I'm sorry, but I don't think you are in a position to afford a new car that is going to cost at least twice as much as the one you are driving. 1. Keep your car. 2. Stop using the plastic. 3. Pay down the cards as fast as you can. 4. Don't close the accounts. Open accounts will improve your credit score. 5. There will still be new cars available when you are in a better position to afford one. Probably "better" ones as well.

 

Excellent JimN.... I whole heartedly agree!!

 

i know everyone's opposed to using plastic in daily practice. hell, even i am. but man, they work well for emergencies. keep the accounts open. if not for our main credit card we would not only be financially screwed, but we'd be hungry too.

 

<div class='quotetop'>QUOTE(manda1983 @ Aug 18 2007, 03:14 PM) [snapback]498392[/snapback]</div>

I agree with the consensus of the others.

Look at selling your car as a business transaction, which it is. What concern is it to you if she cannot afford the car? What is the buyer to you? Family, friend? No, a complete stranger! You already dropped the car's selling price by $500. Why drop it even more?

If you go into a store and can't afford to purchase something, does the owner say "Well, I've already discounted the item by $500, but since I don't know you from Adam and will never see you again, I'll knock another $500 off." No. The owner would tell you to look for something less expensive or come back when you can afford it.

As DaveLeePrius said, something is definitely fishy with the prospective buyer. Who buys a car (on credit) and fails to take into account interest and ye olde standard "tax/tags/license/taxes are not included"?

 

I think other people have already chimed in on the relevant aspects of your question, so I figured I'd explain my experience:

2 months ago I traded in my '02 Prius for an '07 #4. I got the new Prius for $1200 under MSRP (the salesman didn't seem to understand that I was literally buying the only new #4 within 300 miles). I got 6.25% financing, which was slightly blah, but that's because I was using one of those "blank check" auto financing options (Toyota quoted me 8.5% IIRC).

$1200 under MSRP was nice, but the real steal was my '02 trade-in. $9500. For 80,000 miles, a scratched up spoiler (bike rack), a hood that was chipped to hell (bad paint job after an accident), scratched upholstery (I transport computer servers around a lot) and even a burn hole (I used to smoke), and the grand finale: missing center A/C vents from my aborted attempt to remove the LCD and get it modded for adding a video input.

From the above, it's clear that my old Prius got a decent amount of abuse. But I did love that car. So my jaw basically dropped when I was offered $9500 for a 5-year-old beat-up car.

I'm still smiling to this day.

 

>DaveLeePrius
>Agreed, don't accept the offer. They're just trying to scam you!

Given the situation, I would call it barganing, not scamming.

 

When I bought my '06 Prius, I financed through Toyota Financial (at 7%) only because they were offering the $400 discount for college graduates (you must be planning to graduate in the next 6 months or you must have graduated within the last year) which I'm not sure if they are still running that promotion or not but you can always ask.

About a year later (the said I needed to keep the loan through Toyota for at least one year) I refinanced with the local credit union I've been with for quite some time, I don't have a lot of credit history but what little credit I do have is very good so they were able to refinance for me at 5.25% which is much better. I also reduced the term to 3 years instead of the remaining 4 which only runs me an additional $40 a month.

I just sold my weekend toy car last week, I could probably pay off the Prius but I'm looking to buy a house right now, so those funds are going into a CD until I decide what I'm going to do with it. In the mean time, I don't mind making the payments on the Prius because I'm building credit! Maybe you can hold something from the girl as collateral until she can pay you the $500 or $1,000 difference or whatever the amount may be that she is coming up short. I agree, if she can't afford it you shouldn't have to continuously lower your price to meet her needs. Good luck!

 

<div class='quotetop'>QUOTE(manda1983 @ Aug 18 2007, 03:14 PM) [snapback]498392[/snapback]</div>

If you need money for the fall semester now, then you have answered your question as if to sell or not to sell. $9500 now is better than nothing now. You don't have to pay off your credit cards right away....in fact, the longer you make those monthly payments (on time), it works in a positive way for you. Even if you did pay off your credit cards today, it would not show up on your credit score that quickly. You did mention that you have a good paying job, you need to know what monthly payments you can afford on the new car.
As far as financing your future Prius...I tend to believe that credit unions have a better interest rate than banks especially if you are their customer.

 

Credit isn't "fixed" so easily. You need to build up a reputation by continuously paying off debt on time.


My advice: don't go for her offer. You will be WAY better off if you took that money and "stick it in the bank". When the time comes, buy the prius in cash. After all, you could lose your job at any time. Build up your financial foundation until you can weather through unemployment before you go deeper in debt.

Buying a new car hurts the enviroment more then "re-using" your old car.

 

Well, I agree with all the comments re keep the old car and save the money and pay off debt. However, on the flip side, if you still want thenew Prius (who wouldn't?) then you also need to factor in the car market is really not doing well -thus you can walk into dealerships and get 0% financing, cash back, etc. onnew vehicles. So factor that into the used car market you are presently involved in.
When it comes to buying the new Prius, you need to explore multiple loan options, Toyota probably is not the best deal going. I still think putting down a larger down payment is better as it reduces you debt-most people are not going to take their cash on hand and invest it to offset the loan interest. Way to many people out there are upside down in their cars at present.

 

<div class='quotetop'>QUOTE(manda1983 @ Aug 18 2007, 02:14 PM) [snapback]498392[/snapback]</div>

I'd pass.

It sounds like she wants $2,000 off your asking price.

How long were you advertising? Were there any other offers? Are you so desperate you need to take the $9,500?

If not, I'd pass. Tell her you already took $500 off and your $10,000 price is firm. If you have to re-advertise, do it for the $11,500 you say it's worth. Then if someone offers you $10,500, you've got what you originally wanted.

Finance through your bank or credit union. You'll get better rates. And you're going to want to wait until your paid off credit cards post and the three major credit companies also post so that your credit rating is higher by the time you apply for financing. This could take over a month, depending.

In the meantime there's public transportation, etc. Maybe you'll find you don't really need a car.