QuestionHello,
I have a question about buying a car. My car is twelve years old and I am bit rusty on the car purchasing. I will try and explain my question as best as I can.
I have been reading a lot of information such as tips etc. and one of the things that was mentioned was that a person should avoid telling the car salesman what monthly payment they were looking for - and instead focus on the entire car purchasing price.
But, my dilemma is that – the car payment is my main focus. It is very important to me to not go over a certain amount of money on the monthly payment. So my question is this. How do I figure out a guesstimate of the monthly payment? Would I take the amount (example: $10,000) on a 60 month loan then just divide it up? So, even if I do this, I would still have to negotiate the price plus tax and licensing etc. I don’t want to negotiate a price and go through most of the motions only to end up more than what I can or want to pay.
But, don’t get me wrong, I won’t go over what I can pay. I was lucky enough to have recently get a raise of a certain amount and that is literally all I have for a car payment. So, I either get the rate I need or I go elsewhere. And next, I have a good job history, and car payment history but unfortunately I do have some old hospital debts on my credit and that will likely hurt my score too. And I realize that I cannot be overly choosy if my credit is not perfect but my car history and job are. Seven years at my job and my car finance history is still on my credit report but will come off soon since I have had my car paid off for almost six years now.
Any answers on how to go about figuring out what car payment would be? This will be a purchase in Phx, AZ
Any help would be greatly appreciated. Thank you and have a great day!
Answer
Car guy
Great question ...and in this current economic climate it applies to alot of people. The best way to do what you are asking in my opinion is to do it conservatively. Are you trading in your car? If so go to KBB.com and use a value that is about right in the middle between trade-in value and private party value (good condition) and if everything else about it is good (no dents or ripped upholstery etc) you won't be far off. (used car values are up lately) Then I would go to www.questez.com and download the program called "Finance and Insurance" or "questezfinance" whatever they are calling it now (it's free) that will give you the exact same program alot of used car dealers currently use to calculate payments, taxes, insurance, DMV fees and everything else they need to print the contract they will ultimately ask you to sign. Plug in the price, the trade in value, the payoff (10 day) if there is one, any money down and Arizona's current sales tax rate and on the right hand side of the page you will see your payment... play with it some for different price levels. Then do this: adjust the values until you get the value in the box called "total amount financed" to read "10,000.00" and see what your payment is. Let's guess for illustration purposes that it's "300.00" That tells you that you will be paying $30.00 for every $1,000.00 you finance ...so when you are negotiating the price and the price minus your trade/cash down is $6,000.00 to finance you will know your payment is approximately $180.00 per month (30 x 6) DONOT USE 60 MONTHS if your credit is less than perfect and just good think 48 months as your max term and if it's poor tink 36 months is max. OR if the car os older (01-05) or has high miles think 36 mos. (with poor credit) the worse the credit and higher the miles the shorter the term (generally) the dealer will be trying to get you on payments as fast as he can and when he hits you with payments see what term he is thinking (but don't necessarily trust it especially if it's the first 1 or two payment pencils he is giving you) MY ADVICE TO ANYONE BUYING A CAR IS THIS ...SELL YOUR TRADE ON CRAIGSLIST FIRST, SET UP YOUR OWN FINANCING IF YOU CAN, THEN NEVER NEVER NEVER NEGOTIATE ANYTHING WHILE SITTING AT A DEALERSHIP ..EVER! GO DRIVE THE CARS AND FIND ONE YOU LIKE BASED UPON WHAT THE INSTRUCTIONS ABOVE TELL YOU YOU CAN AFFORD THEN NEGOTIATE THE DEAL FROM THE COMFORT OF YOUR HOME OR OFFICE. SALESPEOPLE CAN ONLY SAY NO OR MAYBE ...MAKE SURE BEFORE YOU GO BACK IN TO SIGN PAPERS THAT YOU HAVE A FIRM YES TO YOUR OFFER! ..NOT A "THAT SHOULD WORK FINE" OR "COME ON IN AND LETS RUN IT UP THE FLAG POLE" AND IF THEY TELL YOU THEIR MANAGER WILL NOT NEGOTIATE A DEAL UNLESS YOU ARE SITTING THERE READY TO BUY THEN THANK HIM FOR HIS TIME AND MOVE ON.
P.S. We volunteer all of our time for this forum to feed our over inflated ego's (lol) if there is any reason you are not satisfied with this answer or there is anything you don't understand that I have tried to explain completely and can't give me a perfect 10 rating then please ask a follow up question because I am here to answer any questions you have until you are completely satisfied with the answers and the concepts I am giving you! Have fun and let me know how you do. my emal is roadloans@gmail.com thanks Roger
